How To Handle Tenants When Selling Your HMO


how to sell hmo property with tenants, how to sell hmo, how to deal with bad tenants


I’ve shared a Rick Otton video recently about turning HMOs into ATMs. And in that video – an important question is raised: why are you in it (investing in HMO property)? Like any investment, the goal is to make money. And sometimes, selling the property makes more financial sense than keeping it.

If you’re in that situation, the best time to sell is when your HMO is vacant. This way, the potential buyers can come and inspect the property without inconveniencing any sitting tenants. Also, you do not run the risk of making anybody nervous about the change of ownership. But as life would have it, sometimes the best buyers come along randomly. This means that you might get the best offer for your buy-to-let property while it is in full occupancy. What do you do then? Do you let the sale go? If not, how do you handle the already sitting tenants?

Gain their support

Because such things as AST (Assured Short Hold Tenancy Agreements) exist in the world of HMOs, you can’t simply evict your sitting tenants just so you can easily sell the property. You would have to provide them with ample notice, during which time the buyer might just move on to other available properties for sale. To counter this, the best thing you can do is to gain the support of your sitting tenants.

One of the best strategies is to offer them a reduced rent rate for the period leading up to the closure of the sale. Most tenants would be happy with this arrangement provided you can give them a great recommendation to their new landlord. Most people oppose these sales because it represents instability.

New landlords may require them to move out or hike the rent and impose different (often tougher) terms of occupancy. If you can find a way to appease their minds on these issues, you will not have a difficult time getting them to corporate with the sale.

Sell it to a fellow landlord

how to sell hmo property with tenants, how to sell hmo, how to deal with bad tenants

A fellow landlord will likely favour a property with paying tenants – he/she avoids trouble of marketing the property to renters.


This is by far the most ideal situation. Selling your HMO to a fellow landlord offers the tenants some much-needed stability. Landlords will encourage a high occupancy rate and this means that they will be willing to work with you and the already sitting tenants to preserve the status quo.

This gives the tenants some leverage. The terms of occupancy and the new tenant’s agreement will be designed to keep them in place. Thus they will not feel as if they are being pushed out. If the buyer has no problem with your current tenants remaining right where they are, then the sale will go smoothly.

But what about problematic tenants?

No matter what you do, sometimes you will find problematic tenants either way. People who simply do not want a change of guard. These people will often sabotage all your efforts to sell the property either by refusing entry to their quarters for inspection or simply not tidying up after themselves so as to leave a negative impression on the buyer.

These are the people that you need to handle with great care. Giving them ample notice to vacate would be one way to go. The other way would be to give them new tenancy agreement notices. Those with the security of tenure will simply refuse to sign it as long as they still have the protection of the old agreement. In this case, there is very little you can do. That is why it is best to try as much as you can to get the support of the tenants before proceeding with the sale.

To make this process as smooth and as eventless as possible, treat your tenants as humans. Talk to them about your decision and give them official letters informing them of the new arrangement as well as their options. Only when you encounter extremely difficult tenants should you escalate the matter and exercise your eviction rights as an HMO owner.

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