Whether you’re consolidating your investment portfolio or want to invest in someplace new, it's important to prepare as much as you can in advance to ensure that your sale runs as smoothly as possible.
Calculate your potential profit
Before you sell your buy-to-let property, it's important to calculate the potential profit you’ll make from the sale to determine whether it’s the right decision for you. This involves subtracting your outstanding mortgage balance, any outstanding debts or loans, and any fees or taxes from the overall sale price. If your potential profit is lower than you expected, you may want to reconsider whether now is the right time to sell.
Notify your tenants
It’s important that you’re clear and transparent with your tenants about your plans, keeping them updated for the duration of the sale.If you have tenants currently living in your property, you'll need to notify them of your intention to sell. In most cases, this will require you to provide them with written notice (usually 60 to 90 days in advance).
You'll also need to provide tenants with 24 hours’ written notice if entry is required for potential buyers to view the property, and viewings must be arranged at a reasonable time of day. If you don’t give them advance warning, tenants have the right to refuse entry.
Find a reliable estate agent
When selling your property, finding a reliable estate agent can make all the difference. Look for an agent with experience in selling buy-to-let properties, who will be able to provide you with a realistic valuation and guide you through the sales process. It's also important to find an agent who communicates well and who you feel comfortable working with.
Consider current market conditions
As we’ve seen in recent months, current market conditions can have a significant impact on the sale of your property. If the market is slow, you may need to be prepared for a longer sales process or consider lowering your asking price. Meanwhile, if the market is performing well, you may receive multiple offers and find that you’re able to sell quickly and for a higher price.
Prepare your property for sale
Getting your buy-to-let property ready for sale can make a big difference when it comes to pulling in potential buyers. First impressions are key, so make sure your property is in top condition for viewings. This is also an ideal opportunity to make any necessary repairs or upgrades. Don’t forget to clean, declutter, and tidy both the inside and outside of the property, so you’re showing it off at its best.
Understand your tax obligations
Selling a buy-to-let property can have tax implications, so it's important to understand your responsibilities in this area before you sell. This may include paying capital gains tax on any profits you make from the sale. Make sure to consult with a tax professional to understand what’s required of you so that you can plan accordingly.
Have a plan for your profits
Last but certainly not least, it's important to have a plan as to what to do with the profits from the sale of your property. This may include reinvesting in another property, paying off debts or loans, or putting the money into savings or investments. Make sure to consider your long-term financial goals and make a plan that aligns with them.
Selling a buy-to-let property can be a big decision, but with careful planning and preparation, you can get it right. From calculating your potential profit to finding a reliable estate agent, make sure to consider every facet of the process before taking the plunge.
If you have any queries about your buy-to-let mortgage, get in touch with one of our advisers for a friendly chat.
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
Your property may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.