Ways to Sell your Property Portfolio
The Obvious Options
Selling a portfolio
You’ve probably considered all of the traditional ways to sell the properties in your portfolio, but each comes with it’s own challenges.
These options all have their place but none will be able to offer an optimal price for the sale of a property portfolio.
Let’s consider each in turn.
The Challenges of Traditional Methods
SELLING YOUR PROPERTY PORTFOLIO TO A LANDLORD
In the case of a private landlord there have been changes in tax deductible expenses (from April 2017) and there is no longer the facility of mortgage offsetting as a deductible expense. Selling to another landlord will likely attract 20-25% below market value and the sale will also be liable for Capital Gains Tax.
SELLING YOUR BUY-TO-LET PORTFOLIO TO A HOUSING ASSOCIATION
Housing Associations and Local Authorities have considerable budgetary constraints and will only be able to offer a significantly reduced price. The sale will also be liable for Capital Gains Tax.
SELLING TO A PROPERTY INVESTMENT / ’WE BUY HOUSES FAST' ORGANISATION
A Property Investment Institution will want to buy at 20-25% below market value, as will the ‘We Buy Houses Fast’ type company. All subject to Capital Gains Tax.
SELLING YOUR PORTFOLIO AT AUCTION
Selling by auction carries inherent risk and often a reduced price, way below market value. It still also attracts full Capital Gains Tax. In addition, auction fees will be applicable.
SELLING VIA AN ESTATE AGENT
Estate Agents are great at selling individual properties. However, when it comes to selling a property portfolio, this is a niche area of property sales which needs specialist planning. The process can become extremely protracted, especially if the portfolio comprises multiple properties spread over a wide area. This can cause current tenants stress with the numerous viewings and, indeed, the buyers may well intend to be owner occupiers and not wish to have tenants at all. Sales through residential estate agents are subject to the same pitfalls that can affect residential homebuyers. Once again, Capital Gains Tax will have to be paid.