Tips for Selling an Investment Property

If you are thinking of selling an investment property, you are certainly not alone: the latest government survey of landlords shows that 31% are currently planning to sell.

In a crowded market, it’s even more important to approach a sale in the right way, In this article you will find tips on selling a home as a landlord, from choosing the best sale method to preparing for a successful sale.

Selling investment property often requires a different approach from selling your home, as buyers will be looking for different things. There are four main methods commonly used to sell buy-to-lets:

• Estate agents: the traditional way of selling, which accounts for the vast majority of property sales in the UK. Benefits of selling with an agent are that you can reach a wide market, but the flipside is that most do not specialise in rental property. Selling this way can also be slow and inflexible, tying you into an exclusive contract.
• Auctions: this is a quick way of selling property, as it often attracts investors with cash looking for a fast transaction. However, the audience is much smaller and the price you get is very dependent on who is bidding on the day.
• Cash buying firms: there are numerous “quick sale” firms looking to buy property from investors who urgently need to sell. The penalty for a fast and guaranteed sale is that their offers will be much lower than market value.
• Off market sales: historically more popular at the top end of the market, off market sales are also very well suited to investment property – especially with tenants in place. Properties can be marketed discreetly and targeted directly to vetted investors with a specific requirements.

Choosing the right method is only the beginning. To sell fast and get the best price, you need to prepare and present it properly.

• With tenants or without? Traditionally, landlords would often evict tenants in order to sell on the open market. However with the Renters’ Reform Bill tightening up the rules on evictions, it might make more sense to sell with tenants in situ. This benefits you as a seller, as it saves time – under the Renters’ Rights Bill you will need to give four months notice – and you keep receiving rental income until you sell. And for a buyer, guaranteed income from day one is a definite bonus.
• Get a valuation. Setting the right price is vital for selling: too high and you won’t sell, too low and you’re giving away value. If selling through an estate agent, they will offer a valuation, but you can also get a good idea by studying the local market. Landlord Property Exchange can offer a desktop valuation without visiting the property. Remember to take rent into account: for investors, yield is key.
• Sort out repairs. If a buyer sees that work needs to be done on a property, they will tend to reduce their offer – and investment buyers are often more hard-headed about this than private buyers.
• Keep it tidy. When selling your own home, clearing away clutter and making sure everything is clean is an easy way to make a good impression. If you have tenants, this can be harder, but being open about your intentions to sell, and perhaps offering an incentive to keep things tidy, can help ensure co-operation. Don’t neglect the garden, either – it’s the first thing buyers will see.
• Get the paperwork together. When selling any home, you need to have the right documents: proof of identity, title deeds, EPC and electric/gas safety certificates, and certificates for building work, windows etc, For a rental property, especially if tenants are in place, additional paperwork will be needed, including the tenancy agreement, proof of deposit protection, and inventory.
• Be ready to vet buyers. Timewasters are an unfortunate fact of life when selling. Ask questions and check for proof of funds. Another advantage of off market sales through LP Exchange is that you get direct access to vetted investors.