I was wondering if anyone could suggest some good ways to sell a small letting busiiness, or investment property. It is a house which has been divided into flats in Poole, Dorset. Asking price would be about £170,000, giving an annual return of about £9,000 to £10,000 net, after overheads, and not taking into account property appreciation/ depreceiation. Very little investment in time required by operator/owner. Less still, if placed in the hands of a letting agent.
Aside from the letting possibility, the property could also be resold as two separate flats for a quick profit of about £40,000, after investing between £5,000 and £10,000 to make the property saleable as such.
I'm interested in finding a cash buyer for a quick sale. A *quick* sale is imperative. I don't mind when the sale takes place, but once it has been agreed, I don't want any delays or hitches.
To answer the above, I am living with an £80,000 (owed to several debtors) and I rely on rent coming in from the other flat to meet my repayments, and I am finding it increasingly hard to make ends meet and I just want to wipe out my debt. That is my reason for wanting to sell. I am assuming that selling the place would neccessitate moving out and moving the tenant out too. So I would possibly have no rent coming in for a while until the cheque is received from the sale of the property. Moving out would also disrupt other earnings I make from a small retail business, because the only other place I can stay at (temporarily) is out of town. That's why I think it needs to be a quick sale.
There is another option open to me; and that is to sell one of the flats, i.e., the ground floor or the first floor. To do that, at the very least, I would need to get leases drawn up as I understand it.
The flats have "established use" (the property was converted to two flats 13 years ago. The services have never been separated, but I gather that's not a legal pre-requisite for selling the flats separately. It's desirable, but not a requirement, I gather.)
I'd feel a lot happier if I had done this kind of thing before - or had a friend who had done it before. It's unchartered water for me, and I could do without the potential stress.. got enough stress, already!
On the other hand, selling one of the flats would get me out of debt and leave me with a place to live without having to move, so that makes it an interesting option.
I wonder which would be easier to sell: a leasehold flat or the whole property, comprising the two flats (without leases). Anyone got any idea? I hear that entry-level dwellings (ie., smallish, inexpensive flats) are the easiest to sell, but at the same time, there is much more potential for profit for someone who bought the poperty as a whole.
Selling the property as a whole is appealing, because it would avoid the hassles of drawing up leases and overcoming any other pitfalls. It would be nice just to sell up, move out, and make a new start somewhere else; quick, clean and simple (hopefully).
You don't seem to have grasped that the OP is not particularly fussed about achieving what is *usually* referred to as a quick sale, i.e. he is not under imminent pressure to sell. He is simply after a quick completion once the sale has been agreed. But I don't really think he has reason to.
No. In the subject line you mention "selling a letting business". If your potential buyer is someone looking to buy to let, then it is to his advantage to get a well-established tenant thrown into the bargain, instead of having to find one first.
He could let the other flat to you too, for that matter, by which time with a pocket full of loot you can afford to pay the rent, and to take your time about finding another place to buy, should you so wish.
That's not true. Given a genuinely willing buyer and seller, things can happen quickly even without auction. Auctions are just a place where willing buyers are more in evience than in the general market.
The only reason the English system generally takes forever to get to the no-backing-out stage ("exchange"), is that buyers (and sellers too, for that matter) are generally hesitant to commit until they have their chains sorted out. In a BTL context chains are less likely to be an issue.
Thank you for the auction suggestion. I have considered auctions, but was put off the idea when I heard that the average realisation price is typically 20% less than market value. The other thing I didn't like was that one still has to pay the auctioneer's commission if the place doesn't sell or doesn't reach the reserve price.
I'd be more enthusiastic about them if they were more commonly used and much better publicised. Then I think properties would realise better prices with more bidders competing for the lots.
Yes, auctions are a possibility, and presumably a quick way to turn a property into cash, but I'm more interested in other ways to achieve a quick sale - ways that are more likely to get me a fair price.
That's a good point. Thank you for that! I had somehow overlooked that idea.
Can anyone recommend ways to find such a buyer? I suppose estate agents would be one possibility, but are there other places where cash buyers look for propeties with sitting tenants?
Wrong. There is a category "Home & Garden" with subcategory "Residential Property". It's not exactly doing a roaring trade, with only 47 items just now in UK & Ireland, but still, it exists.
The seller might get lucky, he might equally get unlucky.
ISTM they only way to avoid taking the risk of getting unlucky (which is what the OP said he wants) is to use an auction.
It should be noted that once in the auction, it is possible to accept offers to 'sell prior' on auction terms.
Auctioneers discourage offers to buy before the auction which are 'low' (which means less than 10-15% above guide) but I don't know if they actually refuse to pass them on (I've never been interested enough in a marginal property to try).
That's not what the OP said he wants. He wanted the time from when it's all agreed (*fully* agreed -- i.e. the stage at which it is not longer possible to get unlucky) to getting the cash to be as short as possible.
Mind you, it often is pretty short anyway.
The trouble with auctions is that they don't generally achieve as high a price, and I'll lay odds on the OP not being too keen on getting less than full whack.
This is a chicken and egg problem. Houses sell for 20% below achievable price when using an auction, because the sort of property that is usually placed in an auction has a 'value' which is 20% below achievable price because of some akward reason that makes it a difficult sale by the normal route.
Your property is one such property. IMHO you would not expect to achieve a higher price for you property by a normal sale than the one you could reasonably expect to achieve using an auction.
Of course, you may get unlucky at the auction.
Is this right? It does suprise me. There would seem to be many properties in auctions that don't seem likely to be there on those terms.
As long as the seller agrees a reasonable reserve (and some don't) it seems unreasonable to charge them because the auctioneer did not attract the right type of clientele to his auction on the day. It's not like each property is marketed separately, they are marketed as a group and with around 90% selling it's not like there is much of a loss if not charging the non sellers (most of which come back next month anyway).
But if that's how it is.....
The auction terms of sale put off many 'normal buyers'
But there's also the chicken and egg problem.
If auctions became a home for 'normal' houses sold to 'normal' buyers at 'normal' prices, there would be no investors there buying investment properties requiring work at bargain prices, so we would have to invent a place for this to happen.
Remember, your property is an investment property requiring work for sale to an investor and therefore likely to sell at a bargian price.
Your choosen method of sale isn't going to change that.
Who cares. If someone offers me the reserve for my house why does it matter if there was only one bidder.
But does it create a binding sale.
I can't see that eBay's T&Cs are going to override a statute that says that a sale of property is not binding until contracts have been exchanged (missives or whatever it is you have!) .
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