Selling directly to a REIT

sandyxxx · 29-10-2021 12:54am #1

It’s a bit of a mad proposition this but here it goes!….

Thinking of selling our rental property(has tenants in place with good rental income!)

Property is based in a coastal commuter town with great potential for expansion….the reasons I’d go direct to them are as follows:

1.Good tenants could likely stay in place.

2. Good price could be negotiated quickly.

3.No estate agent or fees would be involved.

4.Possible quicker transaction time.

Property was built/bought in 2006,still on good nick with all mod con’s and gigabit broadband available!

……Is there any way to approach investment funds/REITS or has this approach ever been tried before?!

DubCount · 29-10-2021 8:49am

In practical terms, I cant see it.

You say you have good tenants (and I believe you) but a REIT is not going to understand why you dont just evict and sell with vacant possession. Most property being sold with a sitting tenant have "issues" and anyone buying is going to suspect they are buying trouble. Even if they could get past the sitting tenant, REITs generally have an investment strategy covering where and what they are interested in. If they were interested in a house in your area, they would contact local estate agents to find the property they want. The chances of you hitting the particular fund interested in your house at the time you are selling is pretty low. Lets suppose you find your unicorn REIT who is happy with your sitting tenant and wants to buy property in your area at this time, they are not going to pay top dollar - they are in the business of maximising yields.

I know evicting a good tenant to sell is a horrible experience. I've done it myself. Do yourself a favour, just go through the process and sell in the normal way.

JimmyVik · 29-10-2021 9:03am

An investment fund bought my house. I thought it was the council at first but it was a fund, who then leased it to the council.

As Dubcount says above about them going through EAs, they approached me via the EA who I had bought the house through a few months earlier and made me an offer i couldnt refuse.

Some of the conditions were that it was not currently rented and that they had vacant possession.

As soon as they bought it the builders were in. They totally gutted the place.

If I were you OP I would issue your notice now, before the legislation that is to come in shortly catches you by surprise. When that comes in it will totally wipe the value off your property, if you can even sell it then.

29-10-2021 9:06am

allied irish property.

I'd be surprised if the local Estate Agent doesn't have a half dozen similar companies in his contacts list or small time professional landlords who might pay even more.

sandyxxx · 29-10-2021 9:46am

Thanks for all the feedback, interesting to hear some experience of this……I am anticipating some game-changing legislation and hope to exit the market in advance of this but was going to wait in advance of an election before a shiners-led govt takes power….might get feedback from estate agents,if nothing else,they could help suss out a potential quick sale!

JimmyVik · 29-10-2021 9:57am

https://www.boards.ie/discussion/comment/118088726#Comment_118088726

Like the last legislation to limit rent increases to not 4%, but to inflation, then next legislation will be in before you even have a chance to react.

My guess is that there will be legislation for no rent increases for a few years (which could be 50 years the way the extend temporary measures here) and that you will not be able to ask a tenant to move out on the basis that you are selling your house anymore. And I think it will be here by Christmas. Christmas week would be a good guess for it to come in.

If you are planning on waiting until after the next election to sell, you might never be able to sell. At least not for the full value of your property anyway. And then the REITS will be rubbing their hands togather because they will be the only show in town for you and they will know this and offer far less than market value.

sandyxxx · 29-10-2021 10:19am

https://www.boards.ie/discussion/comment/118088768#Comment_118088768

Wow!😱

….that’s a pretty bleak forecast,

as it stands the rent increase thing doesn’t bother me but an inability to sell your own property would be crippling!….I’m hopeful your pre-Christmas timeline won’t come-to-pass as I don’t want to be handing out any eviction notices before then!…..it’ll have to be gone before the next election so! …..Ironic,considering the stated ambitions of the left!

JimmyVik · 29-10-2021 11:28am

https://www.boards.ie/discussion/comment/118088878#Comment_118088878

I think its more likely than not that it happens then tbh.

Theyve done that before with legislation. And the mood is strong for this particular legislation at the moment.

All the parties have already came out and said they wont oppose it, so its as good as done.

sandyxxx · 29-10-2021 11:49am

https://www.boards.ie/discussion/comment/118089180#Comment_118089180

my perception was there would be a change to the constitution needed in order for such legislation to pass…..I could be mistaken but could surely get round it by moving in a “relative in need”

….may get my ducks-in-a-row for a termination of tenancy so! 😞

JimmyVik · 29-10-2021 12:40pm

https://www.boards.ie/discussion/comment/118089281#Comment_118089281

They will just make it temporary.

Like the USC, health levy, insurance levy, rent controls.

None of them turned out to be temporary though.

DubCount · 29-10-2021 12:58pm

https://www.boards.ie/discussion/comment/118089281#Comment_118089281

The constitution protection to property rights is not absolute, its subject to the interests of the common good. The legislation (when not if, it comes) could be challenged thats an expensive business for some brave soul to try, and its not guaranteed to succeed. Just like the RPZ it will start out as a temporary measure but it will be popular, so its unlikely to ever be removed.

If you're set on leaving the market, then go before its too late.

C14N · 29-10-2021 1:58pm

https://www.boards.ie/discussion/comment/118089545#Comment_118089545

If there's one thing you can rely on politically in this country, it's to implement a hasty and badly-thought temporary measure to solve a problem with negative long term consequences, and then quickly become so dependant on it so that it's an untouchable third rail. No change of government will ever do anything about this (I'd say especially to Sinn Fein, who seem to stake their entire political identity on coming up with such things).

Selling directly to a REIT

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