Selling your apartment with a tenant in place: what are your rights and what does it net you?
An apartment can be sold while a tenant is still living in it. Legally, there is nothing wrong with that. But the question that really matters is a different one: what does it net you, and is it smart to sell now or wait until the property is vacant?
Many Amsterdam landlords are facing exactly that choice. In this blog you will read what your rights are, how the vacant value ratio affects your sale price, what the difference in proceeds is between selling rented and selling vacant, and which strategy fits your situation.
Why more and more Amsterdam landlords want to sell off (uitponden)
The Amsterdam rental market has changed significantly in recent years. Box 3 weighs heavier than ever, the Affordable Rent Act has regulated rents in the mid-segment, and the returns that used to be a given have been under pressure for a while now. For many private landlords with one or two investment properties, the calculation has changed.
The result: uitponden. More and more landlords choose to sell their property as soon as they can. Sometimes with a tenant in place, sometimes after departure. So you are far from alone in making this assessment.
What these new tax rules mean fiscally for your investment property is something we cover in detail in our blog on selling your investment property.
Selling with a tenant: sale does not break lease
Let us start with the legal framework, because that is where the confusion often begins. Selling with a tenant in place is allowed, but the sale does not come with the tenant’s departure. That principle is called “sale does not break lease” in real estate jargon and is laid down in article 7:226 of the Dutch Civil Code.
What this means in practice:
- The rental contract continues unchanged after the sale.
- The buyer automatically becomes the new landlord.
- The tenant does not have to leave because you want to sell.
Only in exceptional situations can you have a tenant leave: in case of significant rent arrears, serious nuisance, or via the court on the basis of urgent personal use. The wish to sell is therefore not in itself a valid reason to terminate the lease.
What about viewings? Your tenant has to cooperate reasonably. But he or she is not required to make the property “viewing-ready” or set aside hours for prospective buyers. In practice, that makes a big difference, both for the sales process and for the price you ultimately get.
The vacant value ratio: how the bank determines what your rented property is worth
A rented apartment is on paper worth less than the same apartment vacant. That difference has a name: the vacant value ratio (leegwaarderatio). Put simply, it is a discount percentage on the vacant value of your property, because there is a tenant in place with rights.
The percentage itself depends on the ratio between the annual rent and the WOZ value of your property. The lower the rent in relation to the WOZ, the lower the ratio, and therefore the bigger the discount.
For you as the seller, this matters for two reasons. First, the tax authorities use the vacant value ratio for your Box 3 valuation. Second, banks look at this ratio when financing the buyer. An investor who wants to take over your rented apartment can often borrow less than someone buying a vacant property. That pushes down the bid he or she can make.
Selling rented versus selling vacant: the difference in proceeds
Then the question that tops the list for most landlords: what does it cost you to sell with a tenant in place?
In the market, it is often said that rented apartments sell for considerably less than comparable vacant properties; depending on the situation, a difference of 15% to 25% is sometimes mentioned. Concrete percentages are difficult, because every property, every contract and every tenant is different. But the direction is clear: selling rented almost always nets less than selling vacant.
Why that is, is easy to explain:
- Your target group shrinks. Private buyers who want to live in the apartment themselves drop out. Only investors remain as serious buyers.
- Investors calculate differently. They look at rental income, return and risk, not at living comfort, neighbourhood feel or the atmosphere of the property.
- The contract sets the price. A long-running rental contract with a relatively low rent depresses the price more than a temporary contract or a rent close to market level.
The more attractive your rental situation is for an investor, the smaller the gap with the vacant value. The less attractive, the bigger the difference.
Rented, buying out or waiting: which strategy fits your situation?
On paper, you have three routes. Which one fits best depends on your rental contract, your relationship with your tenant and how much haste you are in.
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Sell directly in rented condition
This route is interesting if you want to sell quickly, if your tenant has a temporary contract that ends soon, or if the rental price is already close to market level. It can also work well if your tenant actually wants to stay. An investor then sees a stable property with existing income. For this sales strategy, you need an agent who can reach both private buyers and investors, which is precisely part of what an established selling agent in Amsterdam does for you.
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Buy out your tenant
The amounts for this vary widely, depending on how attractive a vacant property is for you. The calculation: if your property nets considerably more vacant than rented, a payment to your tenant can easily pay for itself. The condition is that your tenant is open to leaving, you cannot force it.
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Wait or sell to your tenant directly
The most underexposed route, and often very attractive. No viewings, no long sales period, no uncertainty. Your tenant knows the property better than anyone and often has an emotional reason to want to stay. A direct deal between landlord and tenant can bring peace of mind for both parties, and a price that feels fairer than what an anonymous investor would offer. Waiting until the contract ends is also a valid choice, especially if it concerns a temporary contract.
Which route nets you the most?
Legally, anything is possible. Financially, it depends on your tenant, your contract and how much time you have. And the best route is rarely the first one that comes to mind, it pays to seriously consider all three scenarios before making a decision.
Wondering which route nets the most for your apartment? We are happy to think along with you, no obligations attached. We know the Amsterdam market from the inside, and the network of investors that makes the difference in a sale with a tenant in place. Feel free to get in touch, then we will look together at what is smartest in your situation.
