Owning a buy-to-let property can be a great way to supplement your monthly income, build your rental portfolio & save for your retirement through growth in value.
Whatever your aims, there’s a lot you need to understand about owning a rental property. One of the key factors you need to think about is everything you will face when you want to sell it.
The property market is tumultuous right now, and many small landlords are selling up as the costs rise and they struggle to give their tenants the support they need right now.
While some landlords are leaving the market, that number isn’t as high as you might think, and many rental property owners are selling to enhance their portfolios by re-investing elsewhere.
Whatever your reason for selling your own buy-to-let property, you need to make sure that you do it right.
If you’re a small landlord or you’ve never sold a rental property before, then here are some of the key facts you need to understand.
Sitting Tenants Make The Process Easier
Some novice landlords might wonder if it’s possible to sell a property with a tenant living in it. The answer is yes; in fact, having sitting tenants can actually be useful. They will appeal to other landlords who are looking to add rental property to their portfolios. That’s because they won’t have to look for new tenants and will be able to start making money from the property straight away.
Speed Is Crucial
When you’re selling your rental property, you need to work fast to get offers in quickly. If the property is on the market for too long, then you might lose existing tenants and struggle to find new ones while it’s for sale. If this happens it will mean that you’ll be responsible for the upkeep, taxes and bills at the property for much longer and you will lose money in the long run. So, it will be best if you do everything in your power to sell the property as quickly as possible. In a buoyant market the usual portals and high street agents like Rightmove & Purple Bricks are very good for a quick sale but during slower times, specialists selling rental property can assist. If you want to get your property sold promptly, then consider using companies like We Buy Any Home or Springbok Properties, who will make you an instant offer, so you can reduce your running costs and maximise your profits by reducing your advertising time. Other ‘quick sale’ companies searchable on Google can offer similar solutions across the country. We also offer a Sell Your House service here for landlords looking to offload their assets.
If any of the furniture in the rental property you’re selling belongs to you and you wish to keep this for a future investment, you can utilise the services of storage companies like Stored Away who can pick up and store your items for as long as is needed.
There Are Additional Taxes To Pay On The Sale Of A Rental Property
Selling a buy-to-let property involves paying additional taxes that aren’t included in the sale of a residential home. These include capital gains tax on the profits you’ve made from the rental property. You’ll also have to pay stamp duty, which isn’t always applicable on some residential homes but is a must for buy-to-let properties. So, when you’re calculating your profits from the sale of a rental property, you need to take into account these additional taxes and work out how much of your profit they will eat into so that you know exactly what return you will receive on your investment.
Selling your rental investment property might seem like a major step, but it can be profitable and help you to expand your portfolio. Whatever the reason for your sale, you need to understand the rental property market and the ways in which selling an investment property differs from selling an ordinary home. This guide should help you to get started and learn the basics, so you can feel more confident and easily find more in-depth insight and support going forward.