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Times have been tough for rental property owners for the past 18 months, and with the ongoing strong demand for property, especially among first-time buyers, many now believe the time is right to sell off some of their properties.
However, they should be aware that this can be difficult if they still have a tenant in place, says Gerhard Kotzé, MD of the RealNet estate agency group, and that they may have to do some additional preparation before their properties go on show.
“Unfair it may be, but tenants generally have a reputation for not keeping homes in the best condition, and many potential buyers seeking a home for themselves will thus be reluctant to look at a property where a tenant is still resident.
“In many cases, even other buy-to-let investors who might be interested in adding the property to their portfolio would prefer to find their own tenants.
In addition, he says, incumbent tenants who really don’t want to move can deliberately put obstacles in the way of a sale. “They can be difficult about giving an agent access to the property to show it to prospective buyers, for example, or perhaps deliberately leave the home in a mess when they know the agent is coming round with potential buyers.
“Tenants have also been known to try to block a sale by regaling potential buyers with every real or perceived fault in the property or problem in the local area.”
Kotzé says property owners who have not made regular inspections may also be in for a nasty shock when they decide it is time to sell, because they may well find that there is much more maintenance to catch up than they realised, or even that some expensive repairs are necessary before the property can be put on the market.
“And if pets or animals have been kept inside, the home will at the very least need a thorough cleaning, and perhaps re-carpeting.”
There may, of course, be no problem where the property was let through a reputable rental agent and tenants have been carefully selected from the outset - and often if the property is to be sold, the best course is to first find out whether these tenants might want to buy the property themselves, he notes.
“But if that is not possible, it is generally better to give tenants reasonable notice and then prepare an empty property for sale, with the incentive for prospective buyers being that it would be ready for immediate occupation once the suspensive conditions of the offer to purchase have been met.
PERSONAL FINANCE
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