A landlord’s guide to selling a buy-to-let property at auction

Selling a buy-to-let property at auction offers a unique set of advantages that can be particularly attractive to landlords. Auctions provide speed, certainty, and access to a competitive pool of buyers, many of whom are investors themselves. Whether you’re looking to offload a tenanted property quickly or simply avoid the delays and fall-through risks of traditional sales, the auction room could be the ideal strategy.

In this guide, we’ll cover everything you need to know about selling a buy-to-let property at auction, from understanding the process to being aware of how the tenants, tax implications, and compliance considerations can impact the sale.

Why sell a buy-to-let property at auction?

It is becoming increasingly common to see rental properties at auction, both with tenants and vacant being sold. Rentals tend to sell well at auction as typical buyers include many investors looking to create a robust portfolio.

Some other reasons landlords might want to sell at auction are:

Auctions are good for making a quick sale – Vacant properties, especially, can incur costs quickly. From covering maintenance, ground rent, mortgage payments, and building insurance, it all adds up, and the longer it takes to make a sale, the more costs will stack up. Auctions provide a secure and quick way to sell properties, allowing you to alleviate the worries of financial costs associated with empty rentals.

Easy to sell multiple properties – For landlords who want to sell multiple assets, an auction provides an efficient way to exit the market or refine investments within a short time frame. With an auction, you can list several properties at the same time and have them sell at the same event. This means you could liquidate your entire portfolio in a day, making it quick and easy to keep track of sales.

Targeted marketing strategies – Auction has an added benefit that takes away many of the administrative and marketing tasks from the seller. Before every auction, there is an extensive marketing period to ensure the auction is attracting the right buyers, which increases the chances of getting a successful sale. The best part is that you don’t even have to wait for the auction; if you get an offer beforehand, you can still take the offer and complete the sale under auction conditions.

Are there fees for landlords selling by auction?

If you’re a landlord looking to sell your properties or portfolio, you won’t incur any extra fees on top of your regular seller’s fees. Seller’s fees can vary depending on auction type. If you’d like to learn more about the types of auctions and their fees, you can read through our handy guide on sellers’ auction fees. Additionally, you can contact our team directly for a full rundown of the fees and more information.

We will always discuss with you the costs so there are no surprise fees down the road. Sellers will also have to cover their own legal costs, just as they would selling through an estate agent. This means that you will need to pay solicitors to create a legal pack, as well as organise gas and electric safety certificates, and an up-to-date EPC rating if you don’t already have them.

Should I sell a property with or without tenants?

Both selling a property with and without tenants can have their advantages and disadvantages. Which way you choose to sell depends on your personal circumstances and financial goals, but we’d also recommend that you assess the market.

For example, certain areas may be less rental unit-focused than others, and you may find it easier to yield success if you have a vacant property. However, some areas have massive investment opportunities and selling with tenants may bring you a higher sale price.

To help you know which will be the best option for you, as well as what advantages each option can bring as a seller, we’ve included some of the benefits and considerations for selling both tenanted and vacant properties below.

Selling a property with tenants

One of the benefits of selling a property with tenants already living there is that, as a seller, you’ll still be receiving rent up until the property is sold. This can save a lot of money on tax and other costs that come with selling a vacant property.

It can also be an attractive option for buyers as it means they will receive rent almost immediately after the sale is complete. If you’re thinking of taking this route, then make sure to read through our tips on selling a tenanted property for more advice.

Some general things you should consider when taking this route include:

Communication with your tenants – Make sure you inform your tenants of the situation and create a suitable schedule that works with them for things such as viewings. It’s important to discuss these things with them early, as auctions can move quickly, and things will need to be completed in a short timeframe.

Being on top of your paperwork – This will include coordinating all the documents, being on hand to answer any questions for efficient communication, and ensuring you hand over all of the right papers for the property, such as payment history, payment schedules, or history of conflicts.

Check your contract – It’s important you re-read what you’ve signed with the tenant to avoid mishaps and misunderstandings. For example, if your contract has a ‘Right of First Refusal’ clause written into it, you won’t be able to go to auction without approaching the other involved parties first. This can also affect the buyer as the signed contract is legally binding, so the new landlord must abide by the terms unless the tenant agrees to their changes or the contract expires.

Selling a vacant property

Selling a vacant property can attract a wider variety of buyers, including those who are looking to buy a home for themselves as well. You also won’t need to include any of the tenant paperwork, such as rental agreements and payment schedules.

However, selling a vacant property means having to pay the costs that come with having a property stand empty. The good thing is that when selling at an auction, you don’t have to wait until auction day to sell. If someone is interested in your property before the auction or gives you an offer you’d like to accept, you can still go ahead with the sale and save yourself on accumulating property fees while you wait for the sale.

Sell your buy-to-let property at SDL Property Auctions

There are many reasons why landlords sell buy-to-let properties through auction, from quick sales to targeted marketing strategies and, here at SDL Property Auctions, we ensure you can enjoy an efficient and transparent service to help you get a price that you’re happy with.

If you want to find out more about our processes, then you can contact a member of our team for more information and guidance to help you get started with the auction process, or you can read through our detailed selling guide for a better understanding of selling at auction.