Hi Brian,
Thanks for getting in touch and can I just start off by shaking your hand for renewing that tenancy agreement with your sitting tenants!
So many landlords make what I consider to be the mistake of letting a tenancy lapse into 'month to month' after the first year's rental agreement is up - particularly if they have a good relationship with the tenants and it looks like they want to stay put for a while.
Sure, it affords you the same flexibility they have - with a month's notice, either party can end the tenancy. However, if you want to keep renting the property out for the foreseeable, why would you risk having an empty property making no rental income - even if just for a month or two.
Anyway, I digress - and I'm obviously preaching to the converted!
I agree that the prospect you offer is much more saleable, particularly if it is marketed directly to investors. I’ve sold plenty of houses with tenants in them and have a panel of investors on our books too - putting the two together could be a win-win, so let me know if you'd like me to make that connection.
To summarise, your options are fairly simple:
Offer to sell to your existing tenants.
They will typically appreciate the offer of first refusal as a goodwill gesture. It will demonstrate to the tenants that you are doing all you can to guarantee they can carry on living there, thus making them feel more secure in the property and less like you might 'sell it from under them'.
Sell with tenants in situ
Legally, any buyer will have to honour the remainder of their tenancy agreement, so it's likely to be investors who will want to buy it rather than owner /occupiers until closer to the lease end.
Serve notice and sell with vacant possession after the tenancy ends.
Obviously you’ve said you don’t want to do this but it remains an option if you can't find an investor to buy in time.
I can understand why people think selling with tenants in situ is complex and to a degree it is, but it certainly doesn't have to be prohibitive.
If it's a good property within a buoyant rental market and offers your buyer a decent yield while giving you the return you need on your investment, then there shouldn't be a problem.
All sales are subject to contract so until you sign the contract you're free to change your mind.
Have you bought or sold a property with tenants in situ? If so, would you add anything to this advice or did you find it was a smooth transaction? I'd love to hear from you, and especially if there is something I can help you with. Drop me a line to info@thebelfastpropertyblog.com and I will come back to you as soon as I can.
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