You’re not alone if you’re thinking of selling your rental home, but before you rush in and serve notice to your tenant, it’s essential to have a solid landlord exit plan.

If your time as a landlord goes back to the early 2000s, you’ll remember instantly high yields, looser legislation, and fewer compliance traps: fond memories that can tarnish your experience today.

By contrast, newer landlords have an entirely different mindset. They see tighter regulations as a good thing, and their expectations are purely for long-term returns.

So, would you keep your property if it was more profitable and easy to manage, or do you just want out? Let’s explore both sides of the coin, with a dive into the following questions:

Is selling up really your best move?

Should you sell to another landlord?

Will an owner-occupier pay more?

What are the tax implications of selling?
Where will you invest instead?

With some landlords in the Wilton and Salisbury area selling up, others staying put, and new investors buying in, our guide will help you make a thoughtful choice you won’t come to regret.

Is selling up really your best move?

You may have thought long and hard about selling your rental property, or perhaps something has happened to make you snap, but given the costs involved, surely it’s worth asking yourself:

Are you getting the full market value in rent? Many landlords don't review the rent for years, meaning their business falls further and further behind its true potential.
Could your property reach a different market? Our blog on Turning A Regular Rental Into A Chic High-Earner can help you add thousands to your income.

Do you have concerns about the upcoming changes to Energy Performance Certificates? Given that the exact cost caps and exemptions aren’t yet confirmed, selling now might be premature.
Are you doing everything yourself and tired of the compliance minefield? If a managing agent took on the work, would a passive income from a valuable asset feel more attractive?

We’ve helped many landlords in the Wilton and Salisbury area to reboot their rentals and set them up for a more enjoyable and profitable future, so who knows? Perhaps you have more options than you realise.

Should you sell to another landlord?

Every letting and managing agent up and down the country has a client list of active local landlords, one of whom could be the perfect buyer of your rental home and a shortcut to a swift sale.

You can keep your tenant in place for the new landlord to take over, removing the need to serve notice or delay the sale until after the tenant moves out.
If your tenant knows you’re looking to sell to another landlord, they’ll be less inclined to start looking for another home, saving you lost income if they move out before you’ve sold.

Selling to a landlord can mean a smoother sale by dealing with a seasoned, confident buyer who has their finance in place, a speedy solicitor, and, crucially, no chain.

If you’re curious whether your rental property would be of interest to other landlords in the Wilton and Salisbury area, get in touch for a no-strings chat about current demand.

Will an owner-occupier pay more?

There's no doubt that someone looking for their dream home will make a more emotional choice than an investor, which could help you sell for a premium price. However, there are some caveats:

Your tenant really needs to be on your side, as they have the right to quiet enjoyment of your property and don’t have to allow viewings. This is where good management really pays off.
Next, presentation really matters, so if you have a messy tenant (which is their prerogative), or your property needs work, it will suppress the value and make photography a challenge.

Finally, you could end up in a lengthy chain, which adds uncertainty and delays that can run into months depending on how many homes are involved.

This doesn’t mean things won’t work out fine, but it’s good to bear in mind that getting a premium price for a tenanted property can be a different prospect to getting one for your own home.

What are the tax implications of selling?

If you make a profit from selling your rental property, you’re going to pay tax on it, so it’s essential to use every tool to minimise your liability. Start with this checklist:

If you own the property in your name, Capital Gains Tax is charged at 18% for lower-rate and 24% for higher-rate taxpayers, with an annual exemption on the first £3,000.
For properties owned as a limited company, Corporation Tax is calculated on a sliding scale, from 19% for profits under £50,000, to 25% for profits over £250,000.

Add up all your costs for selling and buying your rental property, like estate agent fees for selling, conveyancing for both the sale and purchase, and Stamp Duty.
Look for every single maintenance expense, no matter how small: safety certificates, service contracts, repairs, replacements, improvements, and even getting keys cut can all mount up.

Include all your tenancy costs, from letting and managing agent fees to referencing, contract preparation, advertising, and inventories.
You can go back 4 years to claim Overpayment Relief for any expenses you forgot to include in your previous tax returns, so it’s well worth checking for anything you missed.

Top tip: Speak to an accountant or tax advisor early on to plan the most tax-efficient way to time your sale - a few days either side of a new tax year can make a massive difference to your final bill.

Where will you invest instead?

No major investment has an immediate payoff, so if you're leaving property behind, it's wise to plan your next financial move before taking action.

The constant appeal of property is that it's a tangible, physical asset. It might go up and down in value, but you know that it will never simply disappear. How will you replace that?

Stocks and shares can provide excellent returns, but they come with greater volatility. It really depends on how risk-averse you are, as companies can and do go bust.
Other options include commodities like gold and silver, cryptocurrencies, or collectable items like art, antiques, and vintage cars, although market whims can take things either way.
For a safer haven, savings accounts offer easier access to your money and steady returns that will usually be lower than investing.

Whatever you’re thinking of, remember to subtract all the selling costs and taxes from your property’s equity to get the real figure you'll have to invest elsewhere, and whether it still makes financial sense.

Does your landlord exit plan need work?

If you own a rental property in the Wilton and Salisbury area and you're wondering whether or not to sell up, we'd love to help you explore your options to make a confident decision.

Perhaps your property could work better for you, or maybe it's perfect for one of our landlord clients to buy. Call us on 01722 580059 or message us at info@piccoloproperty.co.uk, and let's find out.