Buying as a Sitting Tenant
Buying as Sitting Tenants | Mortgage Advice in Derby
Landlords and Tenants | Mortgage Advisor in Derby
Sometimes we receive calls from tenants when they have been notified that Landlords are considering selling their properties. Although for Landlords it is much easier for them to sell to existing tenants rather than the open market – this leads to tenants being offered first refusal.
Why is my Landlord Selling up?
The Government have re-evaluated tax reliefs which were previously afford to Landlords. This has led to many landlords paying more tax than before hence making them sell their properties – a very common situation for amateur landlords. On the other hand, more serious investors often keep their properties as they tend to view it as a long-term arrangement and a sound investment despite legislative changes.
Why is it better for Landlords to sell to Sitting Tenants?
There is a variety of reasons as to why a Landlord might choose to sell their property to you rather than an estate agent.
- They avoid paying commission with Estate Agents.
- It avoids ‘loss of rent’ due to not having tenants in the residence until the sale goes through.
- No refurb costs: If a tenant moves out then the property will have to be prepared for sale. With potential expenses needed to redecoration e.g. new flooring.
Advantages for you
Not only are there advantages to Landlords but there are potential advantages to sitting tenants who are considering buying:
1. You know the property inside out if there are any faults, you’ll already be aware of them. No nasty surprises for you!
2. You won’t be caught up in a chain. You aren’t waiting for the owner of a property you’re after to finish their own process meaning a deal can be done faster.
3. Discounted price when purchasing. Given all the advantages listed above, it’s normal for a Landlord to sell to a sitting tenant at a discounted price. More commonly known as a ‘sale under value’.
Some Lenders will allow discounts which are offer by the Landlord as part of your deposit. If the price that is agreed turns out to be well below the open market value it may even be possible for a tenant not to have to put down any deposit at all.