Buying and selling rental property with the tenant in situ is becoming increasingly popular in the buy-to-let sector, but some landlords are still losing money through turfing out tenants unnecessarily.
Landlords looking to sell their properties when a tenant is still living there might be unaware that there is no need to evict them before putting the home up for sale, and doing so could be resulting in losses of between £2,757 and £5,514, according to data from HomeLet based on just over three months’ rental income – the average time it takes to sell.
The total loss of income to the country’s landlords has been estimated at between £551m and £1.1bn by property investment marketplace Vesta, and it’s a practice that has been branded old-fashioned by the firm.
A selling point for landlords
Particularly if the tenants have been good customers – keeping up with rental payments and maintaining the property well – landlords would be much better off considering keeping them in place as they look to sell the property.
The new buyer could be looking to make an investment into the rental market themselves and could also benefit from buying a property with the tenant in place, reducing void periods for both the buyer and the seller. This is especially relevant in today’s housing market, where there are a higher number of renters than ever and therefore a huge demand for rental properties.
No need to evict to sell up
Russell Gould, Vesta’s chief executive, said: “The practice of landlords evicting perfectly good tenants when they want to sell their property is outdated in this day-and-age and highlights that the sector is long overdue for reinvention and transformation.
“You really have to question a process that loses rental income for the seller whilst putting the tenant through huge amounts of stress and cost when it is totally unnecessary.”
He added: “We want the buy-to-let sector to realise that there are viable alternatives to the traditional model that are both socially responsible and financially beneficial to investors, landlords and their tenants.”
Landlords and property investors who are thinking of selling a property that is currently rented out have a number of options available to them.