My son is planning to buy a flat to rent out. He's seen a couple on the Internet that have tenants in situ. I have two questions on his behalf. Are tenanted properties usually less than the usual market value? Also, what is the best way to check the tenant is a good one and hasn't defaulted on the rent? If the owner is keen to sell we wouldn't accept his word about whether the tenant is a good one or not.
Buying a property already tenanted.
Collapse
X
-
Buying the property with a tenant in situ is usually a reason for some kind of discount.
A landlord buying a property will also normally have no chain, which is another positive.
The only way of telling that the tenant has been paying the rent is to get the landlord to show you their bank records.
If your son is starting out, this is likely to be more complex than buying a property with no sitting tenant and letting it through an agent.
Otherwise, they're starting with a slightly complicated position (the seller's tenancy agreement persists for example) and will be learning on the job.When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).
-
Many thanks. The asking prices seem comparable with other untenanted properties in the area so if he is interested he will put in a offer that is a few thousand lower in light of what you've said. You're right he doesn't need a mortgage so could complete quite quickly once he commits. He will be learning on the job as it's his first rental property but no doubt good old Mum will be expected to help out.
Comment
-
Originally posted by mystic08 View PostAre tenanted properties usually less than the usual market value?
Also, what is the best way to check the tenant is a good one and hasn't defaulted on the rent?
They are worth around half of usual market value.
Maggie Thatcher liberated the dead UK rental market by allowing landlords to take back possession of their property (eventually and with fair notice).
The anti-landlord brigade are intentionally or unintentionally reversing this and bringing the awful previous situation back in.
In short, don't do it unless very experienced.
*I've seen Assured Tenancies with fake or coerced AST's in auction legal packs from highly respected auction houses.
Comment
-
I brought a tenanted property late last year so ill tell you my experience of it...
Much like you i did check online the implications of doing this and similar to above was found. I checked with the letting agent who couldn't be more helpful whilst buying. I confirmed with them that once we complete i would not need them to manage the property any further. I was advised by many including the agent that when we completed i would receive all the paperwork in relation to tenancy as the tenancy would not be ending on completion therefore i would need all documents relating to the tenancy.
On completion i came to find out that the stack of paperwork i was expecting for a 5 year tenancy was around 6 pages which was most recent tenancy and a gas cert. They advised me that they would not provide me with anything more due to GDPR, this was never explained prior to purchase and my solicitor believes they are hiding something such as not doing right to rent and such.
I explained this to the tenant and that if there was an issue with something previous to completion unfortunately i wouldn't know Luckily the tenant was pleased to be rid of the agent due to how they operated and understood how awkward they were being. She submitted a DSAR to try and obtain the documents in relation to the tenancy and they advised her they have shredded them.
I have conducted all my legal obligations within the week of completion however due to this being an ongoing tenancy it is to late. Time will only tell how much of a problem this will be come eviction but so far the tenant has been great.
Safe to say that in future i will not buy another tenanted property as i don't think it is worth the stress of not being 100% compliant. If you buy a business you get to see all the details before you take over the business but unfortunately it does not seem to be the same with tenants.
Comment
-
I had a very positive experience buying with tenants in situ, and the main reason I bought the house I did was because it had tenants in it.
I went to meet them after the completion date and offered a new AST with a slightly reduced rent as a sweetener. That way I was able to give them up to date documents of everything they require (GSC, EPC, Deposit protection info etc etc) and I knew it was all done correctly.
There's been a few hiccups with a broken boiler and broken shower at one point, but they've always paid rent on time and in general have been good tenants.
Comment
Latest Activity
Collapse
-
by silvercarI have a warrant of possession from Nottingham court. The court unhelpfully can’t tell me how long it will take to appoint a bailiff. My solicitor is now asking me whether I want to through the high court to get the warrant enforced. Obviously this is at a greater cost, so I wondered if anyone on...
-
Channel: Residential Letting Questions
29-05-2022, 05:07 AM -
-
i am familair with this situation and there is more latitude towards sitting tenants under the rent act. I spoke to Grainger plc who are the largest landlord of lettings of this type in the country. In practice your tenants may be prepared to write a letter saying that they are unwilling to allow access...
-
Channel: Residential Letting Questions
28-05-2022, 22:12 PM -
-
Is there any information you can point me to that deals with this topic? It is unlikely that I will be able to get my properties up to a Band C in time for 2028 and I have sitting tenants who are, by law, entitled to stay put in their properties and can't just be evicted because they have a right to...
-
Channel: Residential Letting Questions
27-05-2022, 22:11 PM -
-
Reply to Possible capital gains tax break?by JK0I'm just imagining what will go through contractors' minds when coming up with one of the three quotations:...
-
Channel: Residential Letting Questions
28-05-2022, 22:08 PM -
-
by HooperI saw this link on Tessa's landlord blog.
https://propertyinvestorpost.com/lan...ks-to-sell-up/
I've long said that if I wanted to encourage small private landlords to get out of the market I'd probably try this. Pretty sure I'd sell up so long as it didn't...-
Channel: Residential Letting Questions
28-05-2022, 15:16 PM -
-
Reply to Possible capital gains tax break?by Hudson01As above it is a pain in the backside to adher too and i had heard that the current limit will be incresed to 10k.......... madness, let us see what comes from the govt and then we will all know, but i am not sure it will work out....
-
Channel: Residential Letting Questions
28-05-2022, 21:55 PM -
-
Reply to Possible capital gains tax break?by JK0They still expect you to jump through hoops to get the exemption. Can you believe this b*llocks:...
-
Channel: Residential Letting Questions
28-05-2022, 20:36 PM -
-
Reply to Possible capital gains tax break?by HooperIsn't it currently the case that if you can show it's too expensive you can get an exemption?...
-
Channel: Residential Letting Questions
28-05-2022, 20:06 PM -
-
by Hudson01Wow, i had not thought of this myself, i do not have such properties (thank god), but the EPC C debacle will cost landlords like yourself a fortune, i may be inclined to sell now and maybe get a buyer who is not so aware of what is coming over the hill. I will certinly be selling mine (standard AST...
-
Channel: Residential Letting Questions
28-05-2022, 19:15 PM -
-
by Hudson01I am happy for it to be put on as a credit on my account, i have been on a cheap fixed rate for a year now and have another year to go, god help me when it comes to an end, so i am building up my credit while i can, if people take it out and spend it on essentials like Cannabis and Rizzla's they deserve...
-
Channel: Residential Letting Questions
28-05-2022, 19:11 PM -
Comment