If you’re looking to sell your HMO property, it’s important to have a good understanding of the process. Selling HMO property works differently to the sale of standard residential property, and there are many factors to consider, especially when selling a tenanted property. Below, we have put together some of the most frequently asked questions we hear from vendors when selling a property to provide some initial information.
If you have specific questions about your HMO property, or you’d like to discuss the Property Advantage selling process in more detail, don’t hesitate to get in touch with our team of experts.
If you want to begin the process of selling your HMO property, start by registering as a seller with The Property Advantage. The first step of the process is our team’s visit to the property. This will allow us to get a sense of what we’ll be taking to market.
We are able to present your property to our wide network investors and will provide tailored guidance and support to help you to market your property with ease. Partnering with us in selling your HMO means that you can trust us to handle the complexities of the selling process.
HMOs are valued very differently to standard residential houses in most cases. We take into consideration the income of the business as a whole, the value in the ASTs, and factors such as Article 4, planning, licensing and the tenant demand in the area. The condition of the property plays a key part too.
Usually, these variables produce an attractive ‘gross yield’ for Investors which is calculated by dividing the full annual income by the purchase price. This is a very generic overview, so get in touch with our team to find out more. You can also take a look at our Yield Map, which gives an outline of yield expectations in areas across the UK.
- VALUATION: Firstly, it’s important that you are happy with the price we feel that we could achieve for your HMO property. One of our valuers will visit the property and also carry out a telephone appraisal. Based on the outcome of this, the financial information you provide, and through our Property Advantage due diligence, we will provide you with a property valuation and a marketing plan for your asset. We encourage you to ask any questions you wish at any stage of this process, and we will endeavor to answer them as thoroughly as possible.
- COMPLIANCE & CONTRACTS: If you are happy with our valuation, our Compliance & Contract team will be in touch to carry out the legally required anti-money laundering checks before issuing you with our Sole Selling Rights Contract (SSRC).
- LISTING: Once the necessary administration is taken care of, our brokerage team will be in touch to acquire in-depth financial information, tenancy schedules, historical occupancy data and other information that we may expect potential investors to ask for. Although this may seem like a lot of paperwork, it will save a lot of time later in the process once the property is on the market. We will create marketing material and send it to you for sign-off before the property is listed for sale. Following this, we will market the property according to the methods agreed at the valuation stage.
- BROKERING: Once the property reaches the market, you should expect further requests for information from interested parties, along with viewing requests. We make sure to ‘vet’ all parties who have requested a viewing before we arrange this, so we are confident that the viewer will be proceedable should they wish to commit. Any offers made will be presented to you over the phone and in writing, and it is your choice whether or not to accept, decline, or negotiate. When we find a suitable offer, we will progress to the ‘Offer Agreed’ stage of the process.
- SALES PROGRESSION: Once an offer has been agreed, we will ask the buyer to commit to the purchase with a £1,000 + VAT (or 1% + VAT for international buyers) reservation fee. We will sign commitment contracts with the buyer and carry out the necessary anti-money laundering checks. If this is successful, our Sales Progression Team will issue the Memorandum of Sale to you, the buyer, and relevant legal teams. Our Sales Progression Team will ensure that the sale progresses efficiently and in a timely manner. We will manage access requests and any communication with legal teams, surveyors, brokers and lenders where necessary, ensuring a timely completion of your sale.
Landlords are often nervous about broaching the subject of the sale of their property with their tenants. We can advise on the best way to handle this to make the process as easy as possible for you. Because we are investment brokers (rather than estate agents), our buyers are likely to require a fully tenanted property, meaning that your tenants are safe and secure in their ASTs (Assured Shorthold Tenancy Agreements) because the property will in most circumstances continue to be an HMO once the sale is concluded.
We offer a specialist service that cannot be rivalled by a local residential estate agent. This is because we are experts solely in the sale of income-producing assets to investors. We offer a thorough valuation strategy, provide a high level of expert information to buyers, and understand the intricacies of your asset in detail, thanks to our many years of industry experience. As HMO and portfolio landlords themselves, our directors have developed, improved, and perfected the sale of investment assets since the founding of the business.
Many landlords are interested to know whether HMO properties are worth more than traditional residential properties, and in many cases they are. This is because a HMO property is valued and sold as a business investment on the basis of the property’s overall potential yield, unlike a residential property.
Generally, HMOs are attractive investments for prospective buyers as they offer rental returns that greatly exceed what is possible to achieve with a standard Buy to Let property. Additionally, there is significant tenant demand for high-quality HMO property in the UK’s cities and suburbs. For these reasons, it is not difficult to generate interest in HMO properties for sale.
The selling process itself can be complex to navigate. However, our team has a great deal of experience in taking HMO properties to market, identifying the most suitable investors, and securing sales successfully. When selling your property with us, our team will be on hand to ensure that the process runs as smoothly as possible.