Selling an investment property

How you sell your property is one of the biggest decisions you’ll make in your investment journey. The process of selling holds equal, if not more, bearing over the success of the venture as the initial purchase of the property itself, so taking the appropriate steps to get the best return on your investment is essential.

Having worked with property developers and investors for decades, we know what’s involved in making as profitable a sale as possible, and are here to guide new and experienced sellers alike to do just that.

Whether you’ve got a newly-renovated property ready to sell on to a residential owner, or you’ve got a unique commercial, tenanted or vacant lot perfect for attracting new developers, read on to discover our advice on the best processes to follow, how your approach should change depending on your property type, and some of our top tips on making the most of your investment.

What is investment property?

As the name suggests, an investment property is a piece of real estate which has been purchased for the primary purpose of generating a profit, rather than for use as the residential home of the buyer. There are different types of investment properties, spanning residential, commercial, industrial and land, with the most popular being the following:

Buy-to-let

Owned by landlords, buy-to-let properties are residential lots which are let out to tenants for rental fees. These can be sold at auction as either tenanted (with a tenant in-situ) or vacant, with different benefits for each option, as we’ll cover below.

Holiday let

Similar to buy-to-lets, holiday lets are rented out by the owner to generate income. In the case of a holiday let, however, rental contracts are typically short, with tax rules limiting the length of stays.

Commercial properties

How commercial properties generate income for investors differs from property to property, but the most common form is as rental income from those who occupy the space, whether it be offices, retail spaces, restaurants or pubs.

Development opportunities

Whether land or a derelict property ideal for revitalisation, developers flock to auctions to find opportunities that could turn a profit, with even those without pre-existing planning permission often performing well under the hammer.

Renovated properties

Also referred to as ‘house-flippers’ renovation properties are increasingly popular options for investors, with auctions the perfect setting to secure a cheap property ripe for renovation, as well as for re-selling it to claim your profit once the work has been completed.

Top tip: Renovating under-developed properties is an exciting way to generate a good profit on a property, and while how you sell is important, so is how you buy, where you buy and what you buy. Back up your investment with expert guidance from our SDL Property Auctions blog, including our Guide to renovating an auction property.

How to sell an investment property by auction

As with any selling experience by auction, investment properties can be sold with speed, ease and certainty. The process of selling itself is straightforward and faff-free, with the full list of steps detailed in our comprehensive guide to selling any property by auction. This guide takes you through each part of the selling process, from getting an initial free, no-obligation valuation of your investment property, all the way through to completing the sale and accessing your profits.

The only differences that need to be considered when it comes to an investment property sale relate to whether or not the property is tenanted or vacant. Both approaches have their own pros and cons, as we’ve mentioned, but with the wide range of buyers auctions attract, you can trust that both options will be capable of garnering interest and drawing bids.

How to sell a vacant investment property

The simplest of the two types, selling a vacant investment property is no different than selling any other lot by auction. These lots are also often considered more attractive than traditional residential homes which are occupied by the owner as their main residence, as viewings are made easier by their vacancy, and sales can be completed faster than the pre-imposed deadlines as no one is required to exit the property.

One exception to the general rule of vacant properties being easier to sell is if your property has been recently made this way through eviction. However, as long as sufficient warning (typically 60 days) has been given to the previous tenant before the sale, the sale can proceed without any legal issue or the previous tenant causing problems.

How to sell a tenanted investment property

While vacant properties can lead to smoother sales, tenanted properties have their own appeal when it comes to attracting the right buyer, as the guaranteed existing rental income means the new owner will have access to secure funds immediately. This added value leads many buyers to overlook common issues such as viewing restrictions and higher capital gains tax payments, particularly if a good, long-standing tenant is in place, as landlords know these can be hard to find.

Top tip: If you’re selling a tenanted property, we recommend maintaining good will with your existing tenants as much as possible. While their tenancy agreements won’t impact you once the sale has gone through, it’s still best practice to share all information possible with residents and keep them informed of the process. Find more useful advice in our tips for selling a tenanted property blog.

Sell your investment property with SDL Property Auctions

At SDL Property Auctions, we do everything we can to make sure your sale goes as smoothly as possible, and generates a good return on your investment. For more advice about selling investment properties, contact our experts by sending us an email at enquiries@sdlauctions.co.uk, or use our live chat to get in touch.

Selling an investment property… that was easy.