How to sell off your property portfolio

Posted: 16th Nov 2015

As anyone owning buy to let property is probably already painfully aware, this summer’s decision by the Chancellor of the Exchequer to curb tax relief on landlords’ mortgage interest payments seems set to hit the industry hard.

Indeed, according to a report by City A.M. on the 25th of September 2015, a fifth of the current population of landlords are expected to see their businesses fail within the coming two years or so. On top of the existing costs of tenants defaulting on their rent, damage to property and the need for ongoing maintenance and repairs, the tax changes may prove the final straw.

It’s enough to make any buy to let property owner seriously think about selling up and quitting the industry before it’s too late.

If you are edging towards just such a decision, it might be helpful to consider how to sell your property portfolio:

Get help

  • estate agents might not have the most copper-bottomed of reputations, but when it comes to valuing, marketing and selling property, their professional skills and success may prove difficult to beat;
  • choosing your estate agent, therefore, may be the first key to success in selling your property portfolio;
  • successful local estate agents operating in the same area as your portfolio are the ones most likely to have the sign boards outside properties announcing “sold” rather than those simply advertising the dwelling as “for sale”;
  • another important indicator, of course, is the extent to which an estate agent is marketing – and selling – properties of a similar state, condition and value as your own;

How many agents?

  • an insider point of view carried by The Guardian newspaper explains the pros and cons of instructing one or more agents;
  • an agent offered a sole agency, for example, may be able to quote a cheaper rate of commission in the property is sold within the term of your contract with them – typically a period of between 8 and 12 weeks;
  • if you make the wrong appointment, however, you are effectively stuck with that agent for the duration of the contract – and if any property in your portfolio is sold by another agent during this period, you still need to pay the sole agent’s commission;
  • the multi-agency approach allows competition between those agents you choose to instruct and the commission is paid only to the agent who successfully sells your property – so rates of commission tend to be higher;
  • you might want to beware of instructing too many agents, however, since a proliferation of marketing attempts for the same property may give buyers the impression that you are desperate to sell – and the offers you receive are likely to reflect that impression;

The whole portfolio, or part?

  • a discussion thread on the website Landlord Zone is on the subject of whether to attempt to sell an entire property portfolio in one go or to offer just a few properties at a time;
  • the consensus of the discussion appears to favour selling in smaller parcels in order to command the optimum price for each;

Viewings

  • if you have a whole portfolio of properties on the market, you are unlikely to want – or even have the time for – managing viewings entirely on your own;
  • indeed, this is a valuable part of the service likely to be offered by any estate agent worth his salt;
  • nevertheless, remember that you still have an interest in making the agent’s job as easy as possible and granting viewings to suit their schedule rather than your own – the agent still needs to be able to communicate with you;

Offers

  • this last point is especially relevant, of course, once offers start to come in;
  • the agent’s job involves rather more than simply receiving an offer and passing it on to you – there is a lot of information, relevant to the buyer’s ability to pay and when the sale might be completed, which you need the agent to collect on your behalf;
  • although you may reasonably expect your estate agent to play an active part in negotiating with potential buyers, beware of granting any permission for the agent to reveal how much you might be prepared to accept as a purchase price – it is likely to be used by the buyer as the new negotiating price;

Scruples

  • one final decision might be seen as testing your scruples as a property dealer;
  • once an offer has been made and accepted, do you then withdraw the property or properties from the market or stand by the principle that nothing is certain until contracts have been exchanged in the hope of receiving a higher bid? The choice is yours of course.

The sale of a property portfolio is not something you are likely to want – or are capable of – taking on by yourself. If you intend seeking the relevant professional help of an estate agent or agents, you might want to keep in mind some of these tips and suggestions.