This article is aimed specifically at people who are considering selling their property portfolio rental properties.
If you’ve already decided to sell your portfolio of investment or rental properties you will be thinking about the best way to do that. On the one hand, you may be looking for ease of disposal and speed, but on the other, your investment property portfolio has taken time and money to build up, and you want the best price. It’s a question of balance, and priorities. Should you sell everything to a single portfolio buyer at a knock-down price, or would you be better off selling at a slower pace in parcels to multiple buyers? What if you could find a single investment portfolio buyer and a good price?
Considering the historical popularity of buy to let investment in the UK, and the Section 24 tax changes, it’s surprising to find a lack of clear information about how to sell an established buy to let portfolio.
Here are some questions you may want to consider:
- What choices do I have for selling my investment property?
- What is more important to me – price, speed or certainty?
- How will the sale process affect my tenants and my cash flow?
- What is the best way to get the most from my portfolio sale?
Potential Property Portfolio Buyers – Your Options
Selling your property portfolio at the right place and on terms that work for you depends hugely on finding the right buyer. Let’s briefly consider some choices here.
Despite all of the recent changes around investment property, there are landlords looking to expand their portfolios. Selling to another landlord can make the process easier than selling to individual buyers. They may not be as exacting when it comes to the condition of the property, and they will often take on the portfolio with tenants in place. Of course, other property professionals are likely to be looking for a ‘trade price’.
There is another factor to consider. From September 2017 mortgage lending to landlords with more than 4 properties is likely to be handled by fewer UK mortgage companies. In November 2016 a number of publications raised the issue and you can read more about it on the This Money website.
What this means for landlord buyers hoping to buy with conventional buy to let mortgages is that they may be hampered in their efforts to grow their property portfolios. This could reduce the number of potential landlord buyers.
Although we at Sell My Property Portfolio are experienced landlords, we do not need to rely on mortgage finance to buy your portfolio.
Housing Associations & Local Authorities
There is a shortage of social housing in the UK, which means it may be worth talking with housing associations and local authorities about your portfolio. Don’t dismiss the idea if your rental properties are tenanted as these potential buyers can cope with fully tenanted properties.
That having been said, you may want to consider this wealth warning: local authorities and housing associations will be operating under tight budgets, so your offer may be considerably lower than it could be otherwise.
Although we at Sell My Property Portfolio are always looking to buy rental property portfolios at a sensible price, we are not limited by a tight budget and can pay more. Read about how we can do this in our property portfolios page.
Auction Houses for Portfolio Sales
The auction route can introduce some certainty – which for many is key. Other advantages of selling in this way are; speed, a fixed purchase price (once the winning bid has been accepted) and the leverage of connections the auction houses have with investors and landlords. The aim of the auction house is to introduce you to a single buyer who is willing and able to complete the sale quickly at a price your find acceptable.
There are also some negative factors to consider such as ‘open days’ (the price achieved may be lower without them) and auction house fees to pay. Three out of four lots sold is considered a good result for auction house portfolio sales… but what about the 1 in 4 that stays on the shelf?
Here at Sell My Property Portfolio we offer a sale with all of the advantages of the auction house, without charging any fees. We are not sales agents, but experienced investors and landlords. Why not consider coming direct to us first to see how we can buy your rental properties.
Sell your property portfolio rental properties
As you’ve already decided to sell your portfolio of investment or rental properties you want to find the best way to do that. On the one hand, you want ease and speed, but on the other, you want the best price. It’s a question of balance. The good news is that you can sell at the pace and price you want to a single portfolio buyer.