Selling rented property

[GlobalC]

Re: Selling rented property

Hi planB, following on from the my other thread. The flats are not sold yet, they are sold subject to contract and vacant possession of the flat b that has the non paying tenant. I had a text message today saying that she hasn't found anywhere to live - the section 21 date is the 25th july, if she doesn't bugger off its going to cause problems with sale of both flats and also with the court papers turning up in the mail I'm starting to get rather pissed with this tenant, I've offered help and even said I wouldn't seek court judgement for the arrears if she goes. So it looks like i will have to try an fast track the eviction FYI I have already sold my own property

[PlanB]

Re: Selling rented property

I will still tart the other flat up because it will be presented better, therefore hopefully get another full asking price

You need to do the maths. Compare what you would get for the flat in its current condition with what you'd get for it when refurbished. Then deduct all the lost rental income from when your tenant leaves, during the time the work is carried out up until you complete on the sale which could be several months down the line. And deduct the cost of the works too.

If you're making structural alterations or additions (loft conversion, adding extension or conservatory etc) you will grow the price, but anything more than a lick of paint may not be a financial investment you'll recover. Some buyers specifically want properties with potential to improve so don't write off that option just yet. You could place it on the market now in its shabby state and see what comes back. If no sensible offers then take it off the market and do it up before placing it back again.

And then of course there's the capital gains tax issue. Selling both flats in the same financial year (April - April) will mean that you only have the benefit of using one CGT allowance. If you sell the second one after April 6th 2015 you'll be able to offset a new year's allowance which is a £11k saving for you. HMRC will know these are investment properties because they'll be on your tax return as rent declared.

On the other hand timing is important so maybe it's a good idea to sell the other one asap. When interest rates start to rise (possibly as soon as October) and mortgages become less able to get (that's started already) then the market may cool off. That's the Governor of the Bank of England's plan anyway. Are both your mortgages on these flats fixed rate or variable rate and linked to BBR or Libor ?

From everything you've said the sale of the ground floor flat will ease your cash-flow massively which has got to be good news.

I'm really happy for you

[GlobalC]

Re: Selling rented property

gonna be a big day to get rid of these so i can stick the middle finger up to any DC's who think they can get the better of me!

[GlobalC]

Re: Selling rented property

That's excellent news

It could mean that you don't have to shell out any more money on tarting up the other flat if he's interested in buying that one too. I bet you're glad you didn't evict that tenant to carry out expensive refurbishment work. You've served her with a lawful Section 21 Notice so you can claim all the rent arrears through the county court when she goes, or start possession proceedings on 25th July if she doesn't.

Maybe it's a good idea to tell the ground floor flat tenant that you've had an offer from a buyer who wants to keep her. Otherwise she may have been spooked when it was put on the market and decide to give you one month's notice.

Thanks Plan B, well chuffed with this result. The tenant in the ground floor already knows I was going to try and sell it with her in situ, I made her aware though that if I didn't get the right offers she may have to leave. Low and behold i got full asking price with the first viewing!

I will still tart the other flat up because it will be presented better, therefore hopefully get another full asking price rather than giving them a bargaining chip #happydays

[PlanB]

Re: Selling rented property

That's excellent news

It could mean that you don't have to shell out any more money on tarting up the other flat if he's interested in buying that one too. I bet you're glad you didn't evict that tenant to carry out expensive refurbishment work. You've served her with a lawful Section 21 Notice so you can claim all the rent arrears through the county court when she goes, or start possession proceedings on 25th July if she doesn't.

Maybe it's a good idea to tell the ground floor flat tenant that you've had an offer from a buyer who wants to keep her. Otherwise she may have been spooked when it was put on the market and decide to give you one month's notice.

[GlobalC]

Re: Selling rented property

Hello Everyone

Quick update, Today I have accepted a full asking price offer on the ground floor flat with the tenant in situ

The top floor flat has until 25th July to clear off, hasn't made a single payment for awhile now - even though I had a message to say they were now in full time employment and would start to pay off the arrears. The guy who offered on the ground floor could be interested in the top floor as well so all good in the hood!

[GlobalC]

Re: Selling rented property

That's good news. You've got the deposit insured and the associated paperwork signed by the Tenant so now your section 21 Notice will do the job.

What is the next rent due date according to the AST? The s.21 Notice should give a Periodic Tenant 2 months notice that you want to take possession on or after a specific date which must be at least two months after the next rent due date.

I'm not sure what the rent arrears situation is but be prepared for the Tenant to stop paying when they get this notice. Some do especially when they know you've got their deposit and they're scared they won't get it back.

Are you going to give her a call to tell her it's on the way and would she like to discuss a leaving date with you before it expires in return for some leeway on the rent? This is something you definitely don't want to put in writing at this stage in case she goes to a law centre which encourages her to dig her heels in and wait to be evicted (3-5 months). Whatever happens don't sound desperate to get her out because that will make her realize how strong her legal position is.

I note she asked if you were going to sell the flat with her in situ. Have you done the maths to balance the price you would get with her in it and the price you would get once she has gone and you are no longer getting rent and will have splurged out money on upgrading the place?

I will probably look to speak with her in the next week about finding some leeway! however I am prepared to have to wait 5 months if need be the rent from the other flat almost covers both mortgages so its not too bad!

[PlanB]

Re: Selling rented property

Section 21 sent off today via recorded delivery

That's good news. You've got the deposit insured and the associated paperwork signed by the Tenant so now your section 21 Notice will do the job.

What is the next rent due date according to the AST? The s.21 Notice should give a Periodic Tenant 2 months notice that you want to take possession on or after a specific date which must be at least two months after the next rent due date.

I'm not sure what the rent arrears situation is but be prepared for the Tenant to stop paying when they get this notice. Some do especially when they know you've got their deposit and they're scared they won't get it back.

Are you going to give her a call to tell her it's on the way and would she like to discuss a leaving date with you before it expires in return for some leeway on the rent? This is something you definitely don't want to put in writing at this stage in case she goes to a law centre which encourages her to dig her heels in and wait to be evicted (3-5 months). Whatever happens don't sound desperate to get her out because that will make her realize how strong her legal position is.

I note she asked if you were going to sell the flat with her in situ. Have you done the maths to balance the price you would get with her in it and the price you would get once she has gone and you are no longer getting rent and will have splurged out money on upgrading the place?

[GlobalC]

Re: Selling rented property

Section 21 sent off today via recorded delivery

[GlobalC]

Re: Selling rented property

Hi all, so this week i have spoken with the tenant I want to get out first and explained that I need to sell the flats for personal reasons pretty much as Plan B said. I said that next week she should expect a section 21 notice. How do i do this and is their any special requirements seeing as the tenancy as already on a periodic?

Her initial reaction was not to bad! and asked if i would be selling with them in situ!!! (not likely love seeing as your way behind in payments who wants to take on that sort of tenant )

[GlobalC]

Re: Selling rented property

Hello all, so to update I have now received back the signed deposit paperwork without any hassles! so I guess I should now send a text or call to the first tenant to let them know I am selling the flats and to expect a section 21 as plan B said?

[patchouli]

Re: Selling rented property

You're just saying that

Actually if you want to run my Fan Club send me your CV and I'll look at it favourably

LMAO!!! If I sent you my CV you'd end up having to pay... yuh yuh I'm THAT good...lmao

;-P

[PlanB]

Re: Selling rented property

oohh you made me want to applaud.. you are SO good at this!!!

You're just saying that

Actually if you want to run my Fan Club send me your CV and I'll look at it favourably

[GlobalC]

Re: Selling rented property

It's a tough one, she does seem to be out during the daytime which would indicate she's at work but i guess i will never know for sure unless she tells me.

If the conversation opens up then try to find a way to establish whether she's on Housing Benefit without making her feel patronised. What you have to keep in mind is that she holds all the cards at the moment.

I find this absolutely ridiculous as I'm sure most other landlords do. Yes I didn't do everything by the book but at the end of the day it's my property not there's, you'd have thought giving 2 months notice you want the property back is sufficient time, I appreciate its a pain moving but that's part of life if you don't own your own home! How the courts seem to favour the tenant is beyond me especially if there in arrears!

I will sit tight for a week and hatch some sort of plan

[patchouli]

Re: Selling rented property

But if I were in your shoes I would go with a charm offensive because she's going to be on the defensive if you hit her with a Section 21. If I were in your shoes I would make a gentle phone call (next week) to say that you've decided to sell the flat for personal reasons and want to work out the best way to make sure that she has a smooth transition to her next place. I would say that she'll be getting a Section 21 Notice of Possession in a few days time, but not to take it personally. Tell her you have to do that as a professional Landlord but you're willing to be flexible over the outdate to suit her. That way you're working with her not against her.

If the conversation opens up then try to find a way to establish whether she's on Housing Benefit without making her feel patronised. What you have to keep in mind is that she holds all the cards at the moment.

oohh you made me want to applaud.. you are SO good at this!!!

One thing though... wouldn't the above be better in writing? Or is it intended to be 'off the record'?