Sell rental property to council or open market

HRG

I'm looking to sell my rental property. It was my primary dwelling for 9 years before I started renting it out 4 or 5 years ago through an estate agent. I've asked them for a guide price on the property if I was looking to sell and how much. Notice I need to give the current tenants.

They've come back with a price of about 230k for houses in the area and that I need to give 180 days notice. They've also asked if I'd like them to get in touch with the council to see if they'd be interested in taking the house, this would mean I wouldn't have to wait out the notice and they could work on it with the tenant still in place. Something I never considered or knew was a option.

Does anyone have experience in a similar situation? How does the council purchase work? Would I be better putting it on the open market to get a better price?

ted1

Forget about the EA. Approach the council and say you have sitting tenants. Would you like tO buy it.

You’ll get the market price, no estate agent fees and no empty period while trying to sell.

as it’s been rented you be liable for CGT

RichardAnd

The council will at least be a safe buyer. They have the funds, and they're not going to pull out because they found a place they like more. Personally, though I'd be wary to sell any property to the council for the sake of my neighbours, I'd opt for the straight-forward sale rather than a potentially higher price on the open market.

HRG

I would be liable for CGT alright for the period it's been rented out. That's also why I don't mind using my current EA to do the work as I can write that off against the CGT I believe.

https://www.boards.ie/discussion/comment/121732102#Comment_121732102

Difficult to know if you are getting market rate if it hasn’t been placed on the market though. If the op is going to be using current EA anyway, then might as well put it on the market to see what it’s worth. The tenants are the only (big) sticking point.

Op, are you sure the council will buy without vacant possession? That would hugely beneficial to you if they do, but would certainly not be the norm.

HRG

https://www.boards.ie/discussion/comment/121732876#Comment_121732876

I'm not full sure, but thats what the EA told me when I asked them advantages of going to council.

ted1

https://www.boards.ie/discussion/comment/121732876#Comment_121732876

I sold to Dublin City with sitting tenants. Councils have been mandated to buy properties where tenants have eviction

pretty sure that the OP has been advised of the market price

https://www.boards.ie/discussion/comment/121733269#Comment_121733269

Crikey, that alone is worth selling to the council.

Thanks

arctictree

The sceptic in me would think that the reason that the EA advised you to go the council route is that its feck all work for them yet they still get the commission. What do they have to do, make one phone call?!

arctictree

https://www.boards.ie/discussion/comment/121733269#Comment_121733269

Does the tenant have to be a HAP tenant? Not sure if the OPs tenant is HAP.

HRG

https://www.boards.ie/discussion/comment/121734978#Comment_121734978

Tenant is HAP. It is one of the terms I believe but not the only one required.

pc7

Also if you are below market rate for rent (if in RPZ), this makes your property less attractive to a potential purchaser who intends to rent it out. Will make no difference if its for an owner/occuppier (just something to be aware of) and might put another tick in the council box. Reach out to the council yourself, don't give the EA the fees unless you are going open market.

HRG

The EA fees I can write off against my CGT so I don't mind letting them do the work. They're going to sort an evaluation as well as the council to ensure we're getting the correct market value.

Rent us currently below average. So it's either council or open market with eviction probably.

https://www.boards.ie/discussion/comment/121733748#Comment_121733748

If that one phone call means the house gets sold for a top price with a sitting tenant, it’s worth every cent.

arctictree

https://www.boards.ie/discussion/comment/121739458#Comment_121739458

Without testing the market, the EA is only making an estimate. There could be bidders who want that property for a specific reason. I always suspect EAs who advise a seller NOT to put a house on the market.

https://www.boards.ie/discussion/comment/121739656#Comment_121739656

The sitting tenant complicates matters.

nompere

https://www.boards.ie/discussion/comment/121739418#Comment_121739418

The fees reduce the gain - not the tax. And then only a proportion of the gain is liable to CGT as it was your primary residence for 9 years.

If you pay fees of (say) €2,000, then your actual tax saving is in the region of €270.

HRG

https://www.boards.ie/discussion/comment/121740420#Comment_121740420

Makes sense that, thanks

herbalplants

https://www.boards.ie/discussion/comment/121740420#Comment_121740420

Well said

ted1

https://www.boards.ie/discussion/comment/121739656#Comment_121739656

So serve the tenants with an eviction notice. Try to arrange viewing awhile they are there , or wait for theM to move out and loss a couple of moneys rent between viewings, sale agreed and closing.

its much more efficient and far less expensive to sell to Local authority

SharkMX

Put it on the open market. Any bids will give you an idea of what the council should pay you if they are interested.

If I was an EA I would be very happy to sell direct to the council, even sweetening the deal by suggesting a bargain basement price to make the council bite. Less work for me for the commission. This is the total opposite of what id want if selling though.