Tenants in situ sales on the rise

Caroline Kavanagh, Group Lettings Director, comments:

“A rising number of home owners who have been forced to let their property as they struggle to sell are opting to leave their property on the sales register whilst the tenancy runs, providing an ideal opportunity for investment landlords to purchase a property with a readymade tenant. 

"There are plenty of investors who would willingly buy with a tenant in place as it’s proof to them that the property is rentable and they don’t have to worry about void periods, thereby, providing an income from the day of completion.

"Our sales and lettings departments are working more closely with a constant flow of properties being passed to let and then being sold whilst the tenancy is running.  It works for both the seller and the investment purchaser.

"The situation not only arises from sales by accidental landlords but also from existing investors who are prepared to sell at a certain price but not always in a financial position to move the tenants out before putting the property on the open market.”

Potential investment landlords do need to keep their eye on the market though.

Kavanagh continued:

“Whilst rents have been rising, it’s great for landlords to be able to get a higher yield on their purchase, however, rents may not always stay this high.  Whilst a tenant may be paying a good rental at the time of purchase, when they vacate, depending on market conditions at the time, a lower rental may have to be accepted.”

To illustrate this, Townends in Egham achieved a rental of £900 per month for a one bedroom property that has now been sold to an investor who was tempted by the high rental yield.  Before the lettings boom, the same property would have fetched £700 per month.