Should you sell your buy-to-let tenanted or vacant?

With the number of buy-to-let products increasing to record levels, more and more people are entering the market and realising all the benefits that go hand-in-hand with becoming a UK landlord. For those approaching the end of their buy-to-let journey or looking to capitalise on the sale of selected properties within their portfolios, knowing the right time to sell up and move on is important.

Many landlords judge the right time to sell as when their buy-to-let property is due to become vacant, but there are many advantages to selling with a ‘sitting tenant’. We’ll let Petty Son & Prestwich explain more about what a sitting tenant is:

“In short, a sitting tenant is someone who is renting a property that the owner (their landlord) has decided to sell. If they have an ongoing agreement or contract with their landlord (the seller), the sitting tenant will retain the right to continue living in the property once the sale has been made.”

With UK rentals in high demand and tenants wanting to hold onto their homes for longer, selling a buy-to-let tenanted is more common than it used to be. There are however many benefits to selling with a sitting tenant.

Read on to discover the reasons for and against selling your property tenanted instead of vacant.

It’s easier than you think

Selling a buy-to-let property tenanted isn’t as much of a minefield as many people think for the landlord selling the property, the investor buying and the tenant within.

In most circumstances, there will either be no change to the current tenancy agreement (other than the details of their new landlord) or a new agreement with updated terms for the tenant remaining in the property. Those buying can expect to pay less for a property with sitting tenants. This can prove particularly profitable once the tenancy agreement does come to an end as many properties regain their market value.

As the landlord, you’ll also be able to market your property with the assurance that it is a successful buy-to-let, which is an attractive prospect when selling to another landlord.

It can be worrying for the tenant

Whilst the vast majority of properties sold with sitting tenants involve no change to the existing agreement or a new agreement, the prospect of eviction is a very real fear for tenants. Tenants with an Assured Shorthold Tenancy (AST) have very little protection if the new landlord decides to pursue eviction.

It’s less costly for you

Waiting until your buy-to-let property becomes vacant and then listing it for sale can be costly. No one can put a timeframe on how fast the property will sell, which means you could potentially forgo months of rental income and have to foot the bill for those buy-to-let mortgage repayments yourself.

There are no such worries when selling your property tenanted, however. You’ll be able to reap the financial rewards of a continued tenancy even if your property takes months to sell. When you have found a buyer, you can still collect rental income throughout the conveyancing process, which can take as long as 8 to 12 weeks.

Once sold, the transfer of tenancy agreements and deposits also isn’t a particularly difficult process, especially if you’ve put your tenant’s deposit in an approved deposit protection scheme.

It can make or break the landlord-tenant relationship

When selling your property tenanted, you’ll have another party to satisfy – your tenants. If you already have a solid relationship with your tenants, selling can be a breeze. It is advisable that you liaise with your tenants before listing your buy-to-let property for sale and keep them fully informed throughout the process if you decide to go ahead. You’ll need their support to ensure the property sale is as smooth and stress-free as possible.

You may even consider giving your tenants the chance to buy the property, especially if they have been with you for the long term.

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