Buying property and retaining vendor as tenant

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Buying property and retaining vendor as tenant

    I'm sure I've seen discussion of this on this forum before but can't find it...

    I'm thinking it may be a good time to be buying another property to let and have started looking locally. Particularly because the market is so stagnant I've been wondering about the possibility of making an offer to a vendor based on them temporarily staying in the property after the sale as a ready-made-tenant. I'm not talking about targeting distressed sellers who need out because they can't afford to pay the mortgage, but people who are wanting to move but can't until they sell.

    Pros for me: ready-made tenant; no void in between purchase and first tenant; possibility of getting a better purchase price as it would be an attractive option for the vendor; any money I spend on smartening up the property after the original tenant moves out would (presumably, and within not capital expenses) be legitimate tax-deductible expenses I can deduct from rent income which would not be the case if I spent it before my first tenant moved in.

    Pros for the vendor: can stay in the property indefinitely while he looks for a new place to buy; he becomes a cash buyer with no chain; no need to consider bridging loans/furniture storage etc.

    I have some concerns that the landlord-tenant relationship might be a little awkward... anybody ever done this and/or got any comments?

    Thanks

    #2
    This might be useful, in particular the post refered to in post #4

    http://www.landlordzone.co.uk/forums...highlight=sarb

    Comment


      #3
      One immediate thought is that a person who recently owned a property and then sold it and continued to reside as a tenant will not be eligible for Local Housing Allowance as they will, for starters, be deemed to have the capital from the sale (unless such after paying the mortgage off amounted to less than £16k) and its likely to be seen as a contrived tenancy also (i.e. made so as to take advantage of HB/LHA regs).

      Comment

      Latest Activity

      Collapse

      Working...
      X