How to sell my property portfolio

“I want to sell my property portfolio”

There may be a number of different reasons why you’re considering selling your property portfolio.

Perhaps you’re keen to offload a number of your less profitable properties in favour of investments with a better return. Maybe you want to minimise your financial vulnerabilities in light of higher interest rates. Perhaps you’ve decided that it’s time to retire from property investment and you want to cash in your properties.

Whatever your reason for wanting to sell your property portfolio, this guide will take you through the options available to you and highlight what you should consider along the way.

In this guide

  1. ”I want to sell my property portfolio”
  2. Things to consider before you sell your property portfolio?
  3. How to sell your property portfolio is some of the properties are tenanted
  4. Ways to sell your property portfolio

Why sell your property portfolio?

According to recent research, an increasing number of landlords are selling up. Propertymark claims that the number of available rental properties has halved over the last three years, largely due to landlords selling their rental properties.

But why are so many buy-to-let investors considering selling a property portfolio?

Legislative changes

There have been many legislative changes for landlords over the last few years that may be encouraging them to put up their property portfolio for sale. Many, such as the additional 3% stamp duty, mortgage interest relief changes, and scrapping of the ‘wear and tear’ allowance, have impacted the profitability of buy-to-let property investments. The government’s attempts to improve the private rented sector and protect tenants have been widely criticised and made things untenable in the eyes of many landlords. This is illustrated by a new poll of landlords that says a quarter of them will sell up if Section 21 no-fault evictions are abolished, as proposed. This figure rises to 32% where landlord have large portfolios of more than 20 properties.

Rising interest rates and inflation

Over the last 2 years, the Bank of England has increased their base interest rate from 0.1% to 5.25%. The interest rate was increased by 0.75% in November 2022 – the highest single rise in nearly 30 years.

Higher interest rates, and the resulting impact on buy-to-let mortgage costs, would be enough to concern many property investors, but there are other issues to consider. The reason interest rates have increased so rapidly is that they’re being used to try to address worryingly high inflation.

Towards the end of 2022, inflation reached a 40-year high. This has had a noticeable impact on rent payments, with many tenants struggling to afford basic living costs.

Retirement or moving on to different investments

There will always be a natural movement of landlords entering and exiting the private rented sector. You may be reaching retirement or just feel that a buy-to-let property portfolio is no longer the right investment fit for you.

Things to consider before you sell your property portfolio

Before you sell your property portfolio, there are several things you will need to consider.

Should I sell my property portfolio as a whole or split it?

Whether it’s better for you to sell your property portfolio as a whole or as individual properties will depend on how large your property portfolio is. If you have just a handful of properties, it may be manageable for you to sell the portfolio properties individually. This will allow you to chase the best price for each one. With a larger portfolio, the extra you might achieve from individual sales may not be worth the time and hassle involved in separating your portfolio.

Should I sell to another buy-to-let investor or on the open market?

Selling a property on the open market will mean you have a wider net of potential buyers. This creates the opportunity for more demand and therefore potentially a higher sale price. To sell on the open market, however, the property will need to be vacant. Timing this can be difficult. If your tenant moves out before the sale completes, or your property sale falls through, you will also be left to cover the expense of a vacant property.

Selling to another buy-to-let investor means your audience of potential buyers will be limited. You may achieve a lower selling price, but it will provide you with income until the day the sale completes.

What’s more important to me, the price I achieve for my properties or how quickly I sell them?

When you think about selling your property portfolio, it’s important to consider whether price or speed are your top priority. You’re more likely to achieve a quicker and more straightforward sale by selling your property portfolio as a whole. However, you may well achieve more for the properties by selling them separately.

How to sell your property portfolio if some of the properties are tenanted

If some of your properties are tenanted, you will need to decide what to do with them before you sell. You could serve your tenant notice (if the conditions of their tenancy allow you to do so). Alternatively, you could sell your properties, with tenants in-situ, to other investors. If you have some vacant properties and some with tenants, you may want to split your property portfolio. Those that are vacant can be sold on the open market. Those that are tenanted can be sold as a smaller property portfolio to another investor (or investors).

Ways to sell your property portfolio quickly

A traditional property sale currently takes around 3-6 months from offer acceptance to completion. Of those agreed sales, around 30% will fall through before completion. If you can’t afford the time or uncertainty associated with a traditional property sale, you may want to consider your options for different ways to sell your property portfolio quickly.

Sell your property portfolio with a property-buying company

Selling your property portfolio to a property-buying company is likely to be the quickest and most convenient way to sell. Whether you want to sell just one of your properties or your whole portfolio, a cash property-buying company should be able to help. They will usually buy on a date of your choice, which can be in as little as a week. A cash buying company will have a team of property consultants to manage the sales through to completion. This makes it a hassle-free solution that will take up very little of your time. A genuine company will buy at a discount of around 15%, so it won’t be the right fit for those wanting to achieve market value for their properties, but it does offer a quick and stress-free solution for those who are keen for a fast and simple sale.

Sell your property portfolio with a property auction

Property auction can be a great way to sell if your properties will appeal to other investors. Setting a reserve price means you can ensure your properties don’t sell for less than you’ll be happy with, but it is worth noting that only around 70% of auction properties successfully sell on auction day. So, although desirable property do have the potential to achieve a good price at auction, there is no guarantee that the property will sell.

Sell your property portfolio with an investor-to-investor sales agency

If you want to sell your properties with tenants in situ, you could explore an investor-to-investor sales agency. Although the process itself is much like selling on the open market via a traditional estate agent, an agency of this type deals exclusively with investors and therefore will maximise your audience of potential buyers. Having access to a larger audience of investors will likely maximise your chances of achieving the highest possible price for your tenanted properties. It’s effectively an open market sale, however, so you will potentially need to deal with the uncertainty that brings. It may also be a more time-consuming sale process.

If you have a portfolio of former buy-to-let properties to sell and would like to explore your options, call Quick Move Now on 0800 068 3366 to discuss a no-obligation cash offer.

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Author:

Beth Lane

Beth Lane

As an integral part of the marketing team, Beth is responsible for creating Quick Move Now’s external communications and dealing with national and regional press enquiries.

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