Buying a property with tenants?

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    Buying a property with tenants?

    I have been looking for and have seen a property up the road from me. As an investment proposition, not for me to live in. Very shabby, and the seller may come down on the price. It has tenants. I have been told they have been asked to move out and are at present looking for somewhere else.


    After chatting to them: they seem very nice, have been there four years, have always paid their rent on time, (they said I can check up on that). There is no gas supply to the house, it must be the only house on the estate that hasn't, so they have electric heating etc but they said they don't mind. They have looked after the garden, and the guy said he was going to redecorate but won't now if he has to leave. Place clean but shabby. They love living there. They are in fact almost my neighbours.

    It occurred to me that I could put in a lower than asking price offer for the house, and possibly take on the tenants, (with relevant checks, and new TA). That way I could get the place exactly in the location I want. If they stay I won't have to do it up (costing money). They will be happy, and I won't have to go through the process of finding new tenants.
    I am a cash buyer so no need for a mortgage.

    Q1. Are houses generally harder to sell with tenants in situ, even if they say they are going to move. (Not sure if they have been served an S21)
    Q2. Is it relatively simple (is anything?) to take on someone else's tenants when buying a property?

    #2
    You cannot make the tenants sign a new TA. If you buy, you take on all the responsibilities and terms and conditions of the existing agreement. Therefore you must ask for a copy of that agreement and go through it with a fine tooth comb. You can ask the tenants if they want to sign a new one, but they have no obligation to do so.

    If the property is "shabby" the current LL may not have been maintaining it correctly. Once you take it on, if there are any repairs required, the tenants can insist you start carrying out this work, and enforce it through the EHO if repairs are considered serious.

    Are you aware of all the legal requirements and legislation covering letting? There is a good newbie LL post here:

    http://forums.moneysavingexpert.com/...2&postcount=12

    which will give you an insight.

    Tenants saying they are going to move is a lot different from them actually moving. A section 21 does not end the tenancy or force them to move out - only a court order can do that!

    One other thing to bear in mind is do you really want your tenants to be so close to your home? These tenants may be fine, but what about the future! Some landlords don't even like to give their tenants their address (so use agents), never mind having them on your doorstep!

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      #3
      The key question is when did tenants move in.

      Not when landlord says they moved in but when tenants say they moved in.

      It may not be an AST , S2 may not be usable - ever!
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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        #4
        I have bought a few properties with existing tenants mixed views 1 was excellent other ok but would not have been 1st choice. For me the benefit is less hassle at the outset.

        check when they moved in, get copy of tenancy, make sure they have never been in arrears with rent, if suitable try and convince them to stay. I would not skimp on repairs maintenance it does not pay in long run. The 1st tenant I inherited has now been in over 10 years, never missed a payment of rent and place spotless , yield 15%. Point being inherited tenants can be no bad thing, not sure how it impacts on marketing of property, obviously pool of people interested diminishes, but that may mean a lower price.

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