Thinking of selling: any experience of selling with tenants in situ?

I bought my duplex on (then future) LUAS line in 2005 and had my very good current tenants move in shortly thereafter. It was a cash purchase, thanks to an inheritance. The property is very well proportioned with 3 double bedrooms & 3 living/eating spaces. 1200sqm. I’m licked into a rent below €1350, and have had a recent considerable expense.

I feel it’s a bit pointless now. Am considering selling and investing elsewhere. Already have a modest stock portfolio which is showing well. Would prefer not to disturb tenants if possible, as anyway would have to give them all the due notice. In anybody’s experience here, how do (very good reliable) sitting tenants affect sale price?

Enter name here

You will get lowballed on any sale with tenants in situ in addition to the sale having a very very limited audience to sell to. Price will vary hugely depending on location, condition etc. But it would be definitely be a loss making decision and doing yourself out of tens of thousands at least.

In you are not in need of the funds quickly, I would suggest start the ball rolling and issue a notice of termination. it is going to be a long drawn out process though unless they decide to move on, if they decide to overhold welcome to hell.

P.s The one out you might have if the tenants have been there that long, ask them if they are in a position to buy and maybe offer a discount on market rates of an unoccupied similar property to save time and get the ball rolling.

https://www.boards.ie/discussion/comment/117972602#Comment_117972602

Thanks for the advice. Offering sale to tenants might be an option. They have been very decent in maintaining the property, treated it as if it were their own, even painting inside in same colour etc. The thoughts of turfing people out doesn’t sit well with me. I may shortly issue due termination notice via my agent, and the latter may negotiate a possible sale and if all is eventually agreeable it may work out. I believe my tenants absolutely love the place and now have qualifications which have particularly increased earning capacity in today’s working environment.

dingding

Also your current low rent will impact the sale price as well to a potential investor as with the rent cap this apartment will be less attractive than a similar apartment that has no rental history.

Your best bet might be to sell to the existing tenants.

Mad_maxx

https://www.boards.ie/discussion/comment/117972718#Comment_117972718

How about a contribution to the tenants?

Entice them to leave

https://www.boards.ie/discussion/comment/117973769#Comment_117973769

Selling at an attractive price would be an option. But all to be negotiated. I know they have probably saved up a fair deposit and assessing their earning capacity they would easily qualify for a mortgage.

Mad_maxx

https://www.boards.ie/discussion/comment/117974157#Comment_117974157

I meant pay them to vacate

DubCount

OP. I think its great that you would like to consider your tenants in a future sales transaction. Its also quite understandable that you would like to sell, as you're way below market rates and not given any route to correct that. Unfortunately for you and your good tenants, this noble idea just doesnt work.

No bank will extend a mortgage unless the purchaser is buying with vacant possession. This means anyone buying with a tenant in situ must be a cash buyer. If a buyer is looking to live in the property themselves, they will not go near the time an effort to evict your sitting tenant. So your only potential buyer in this case is an investor buying with cash. That cash rich investor is going to be bound by the same rent caps as you are. They will also not know your tenants are good tenants, they will assume the opposite.

All this means you will find it far more difficult to find a buyer as you are ruling out the majority of potential buyers, and when you do find what you're looking for, the price would need to be heavily discounted because of the low rent cap and uncertainty about the tenants they are taking on.

Being a nice guy is just not encouraged in the Landlord game. Do yourself a favour - just issue them notice to quit for reason of selling the property. I know its the tenants that will suffer - but thats the systems fault, and not your fault.

https://www.boards.ie/discussion/comment/117975139#Comment_117975139

I really appreciate your input. It seems I may have to just issue notice. I had been thinking there that if the tenants had amassed enough deposit to buy the place to live in it as mortgage holders rather than tenants it might be a possibility, and of course if that were possible I am quite sure they may put in an offer.

I’m my father’s daughter (he had dime socialist mores) and far from being a mercenary type. My mother was nobody’s fool, and way more a business type and would have issued notice long ago, lol! But I’ve found sometimes being kind pays you no dividends at all, and I’m being to sort of feel like a charity of some kind.

They are a good adult family unit from Northern Europe and absolutely love the house which offers plenty of space. They might well be able to get together to purchase. Anyway, I won’t try to overthink it, and it will work out for all concerned.

https://www.boards.ie/discussion/comment/117974561#Comment_117974561

people may think me an eejit at times, but that’s definitely not going to be my first option.

Mad_maxx

https://www.boards.ie/discussion/comment/117975277#Comment_117975277

No but don't rule it out

https://www.boards.ie/discussion/comment/117975357#Comment_117975357

Sure, keeping everything in mind.

Hontou

I put a rental house on the market pre covid with tenants in situ. A few viewings but no offers. I took it off the market as I realised it would only sell vacant. The rent was below market rate so I put it up, (non RPZ), going through the correct procedures and then gave notice of the 8 months they were entitled to. Because of Covid, it was over a year before they moved out. They put up a fight but because I had followed all RTB rules correctly they had no rights to stay. They went to Threshold to complain, but even Threshold told them they had to move out.....and they did much to my surprise and relief! There is a process you must go through. Start it now and if you do everything correctly you will eventually get your house back. Charging below market rent is foolish as it makes it too difficult for even the nicest tenants to move out.

https://www.boards.ie/discussion/comment/117982137#Comment_117982137

The tenants are multi pet owners too, but keep the place immaculate. I’m concerned they will get accommodation to suit their needs, but that’s me bring soft in the head. I will give them plenty of notice in order for them to get their ducks in a row. I let through an agent I know quite well who is an auctioneer, they know all the procedures and although they lose the management fee, they get the selling fees with potential of continuing business from new purchaser.

I’ve been thinking about this for over a year, but it’s becoming more clear now that I should initiate things.

CreadanLady

Sitting tenant will decimate the value.

Issue notice, get them out. If they are highly qualified northern europeans then they probably have plenty money, I wouldn't be worrying about them. I doub't they are worrying about you!!

You are right, they won’t be worrying about me. I’m getting the impetus here to proceed,