However, when selling with a tenant in situ—meaning the tenant remains in the property—there are unique challenges and pitfalls that can significantly impact the sale process and its outcome.

Many landlords unintentionally make mistakes that cost them time, money, or even the chance to sell at the desired price.

In this guide, we'll discuss the top five mistakes landlords make when selling with a tenant in place and how to avoid them, with a focus on options like selling to other investors, councils, tenants, or large aggregators.

1. Underestimating the Impact of a Tenant in Situ on the Sale Price and Marketability

The Mistake:
Many landlords assume that having a tenant in place increases the property's appeal, especially to investors. Conversely, some believe it will deter buyers because of perceived complications.

The truth is that having a tenant in situ can either positively or negatively affect your sale, depending on how it’s managed.

How to Avoid It:
To maximize your sale price, it’s essential to clearly communicate the benefits and the current occupancy’s stability.

For investor buyers, a tenanted property often offers immediate income, which is attractive. However, if the tenant’s lease terms are unfavorable, or if the property’s condition is poor, it could detract from its value.

Pro Tip:
Prepare comprehensive documentation about the tenant, such as the lease agreement, rent history, and references. Consider the target buyers—investors often prefer properties with a long-term tenant under a stable lease.

For sales to councils or large aggregators, emphasizing the property's compliance and existing income can be advantageous.

If your tenant’s lease is ending soon, planning for a smooth transition or renewal can help you avoid a dip in appeal.

2. Failing to Communicate Clearly with the Tenant and Neglecting to Follow Proper Notice Procedures

The Mistake:
Another common error is poor communication or failing to follow legal procedures when it’s time to sell.

Landlords sometimes assume they can simply list the property and hope it sells quickly, neglecting to inform or properly serve tenants.

How to Avoid It:
Legally, you must adhere to specific notice requirements, especially if you intend to serve notice to terminate the tenancy to facilitate the sale or for future plans.

Failing to do so can lead to legal disputes, delays, or even the inability to sell the property.

Pro Tip:
Engage a solicitor or legal adviser familiar with landlord and tenant law to ensure notices are correctly served and timelines are respected.

Open communication with your tenant about your intentions can also foster cooperation, making the sale process smoother.

If your plan is to sell with the tenant in place, clarify this in the listing, and assure the tenant of their rights and your commitment to a fair process.

3. Not Planning the End of the Tenancy in Advance

The Mistake:
Many landlords leave the planning of the tenancy end and sale timelines until the last minute, resulting in rushed decisions.

This often leads to problems like tenants vacating prematurely or disputes about lease break clauses.

How to Avoid It:
Early planning can make a significant difference.

If the existing tenancy is nearing its end, consider negotiating lease extensions, or prepare for an orderly eviction if necessary, well in advance of listing the property.

Pro Tip:
If you prefer to sell to a landlord-investor who might want to assume the tenancy, make sure the lease terms are attractive.

Conversely, if you want the property vacant upon sale—perhaps for a renovation or premium sale—you must notify the tenant in line with legal requirements, ideally several months before the intended sale.

4. Selling to the Wrong Buyer or Neglecting the Target Market

The Mistake:
 

Many landlords don’t tailor their sale to the most appropriate buyer type.

Selling to a retail buyer expecting to live in the property, for example, is often a mistake when the property is tenanted.

Alternatively, selling to a large corporate or institutional investor may require a different approach.

How to Avoid It:
Identify your ideal buyer based on the property type, location, and tenancy status.

If you’re selling with a tenant in situ, your best options are often:

• Other Investors: Looking for rental income and a ready-made tenant.
• Large Aggregators or Property Funds: Who seek bulk or portfolio acquisitions with existing tenants.
• The Council or Housing Associations: If the property qualifies, and they’re interested in acquiring affordable, rent-controlled housing.

Pro Tip:
Market your property specifically to these groups. For example, highlight the current rental income, tenant stability, or compliance with local housing standards. Tailoring your marketing approach to each buyer type can increase your chances of a smooth sale at the desired price.