Selling your property portfolio is a great idea if you are looking to improve your cash flow, especially in the current economic climate. However, this is a big undertaking and requires a lot of thought and planning.
Firstly, it’s always best to think carefully before starting the process and to define what it is that you want to gain from selling your property portfolio. Are you looking to sell your portfolio quickly, with minimum fuss or are you looking to sell to make a large profit?
It is important to decide what your goal is so that you can start the process off in the right way. Then you will need to decide how to deal with any tenants that are currently renting the properties. Here you can do one of two things:
- You can sell the properties with the tenancy included
- Or you can sell the properties after evicting the tenants
What to consider before you sell your portfolio:
- Do you want to sell the properties all in one go, as a portfolio, or would prefer to sell them separately?
- What are your capital gains tax implications?
- What rent are your current tenants paying? Do you think this will interest a potential buyer?
- What condition is your portfolio in? Are the properties up to scratch? Would it be worthwhile to make any improvements? Are they compliant?
- If you own the portfolio as a limited company, you will need to decide if you want to sell the company shares or the company assets (properties.)
In addition to this, some buyers may expect you to include a discount as they are buying so many properties in one go from you which could be seen as slightly risky in their eyes. Typically, it is good to give buyers a discount of anything from 10% up to 40%. This can always be negotiated but it is a good start with a discount of at least 10%.
Land and Building Tax will be applicable on a portfolio with 6 properties or more, therefore it may be more beneficial to sell in bulk rather than just one or two of your properties.
Selling your portfolio:
The first thing that you should do once you know that you want to sell your portfolio is to enlist the help of a specialist estate agent who is experienced in selling property portfolios. They will know what property investors are looking for and will be able to market your property in the right way. Alternatively, you could opt for selling at an auction.
It is also important to speak to an accountant to get advice on what selling your portfolio will mean for Capital Gains Tax.
Lastly, selling a property portfolio is a great idea but you will need to consider all your options and get the help of estate agents, and accountants and obtain legal advice so that the process is made as smooth as possible.
To get the help of a property law specialist, email: email@example.com