Purchasing a house with a tenant in situ

[Mk3Ed]

Good Morning

I'm going to a view a house this weekend, which seems to tick a lot of boxes for me.

The estate agents have just rang and said that the owner of the house has just taken a 6 month contract for someone to rent the property.

From my side of things there are a few advantages/disadvantages to this - but it doesn't overly matter that I wouldn't be able to move into the property for 6 months, as it gives me more time to save. Buy fixtures and fittings and also be able to afford a holiday next year (currently living at my parents so the disposable income will come in handy.)

But the reason that i'm posting is does it pose any further risks from a completion side of things, as I would want to be moving in not long after the tenant has vacated. Also I don't want to find myself looking for a property in 6 months time, so is it possible to get the ball rolling and everything secured within the next coming months and leaving only the moving in until 6 months time?

[essayer]

With a tenant in place anything is possible - they could refuse to move out, stop paying the rent, damage the property etc etc. Plan worst case.
Have you spoken to your mortgage company and conveyancer?

[Mk3Ed]

Thanks for the response, I did think of that but assumed if they damaged the property the land lord would be responsible?

I will look around the property this weekend, and speak with my Mortgage adviser if I want to pursue.

[essayer]

Mk3Ed said:

Thanks for the response, I did think of that but assumed if they damaged the property the land lord would be responsible?

I will look around the property this weekend, and speak with my Mortgage adviser if I want to pursue.

As soon as you complete, YOU become the landlord. Everything to do with the tenant becomes your problem after that.

They could be perfect and it could work out beautifully, they could be a nightmare and cost you money from day one. Tread carefully..

[Mr. H]

I think the big issue to start with will be the mortgage setup if you declare that you'll be a landlord rather than living in the property, but then again it could take 6 months from offer to completion and the tenant would have moved out by then.

It could add a lot of hassle to your life for realistically max 2 months of rent payment by the time you sign any contracts and hand over. If it's not a great house or a great price then I would be tempted to wait a few months before putting an offer in to make sure the tenant wasn't my concern. If the house sells in that time then so be it.

[MrChips]

Can you not exchange subject to vacant possesion on completion? It's quite common for the buying process to take a few months anyway.

I'd be more interested as to why a seller has only just taken on a tenant and what exactly the terms of that contract were. If you're a landlord looking to buy another rental property then an existing tenant isn't necessarily an issue but in your case i'd agree with the others, tread very carefully if you're looking to move in as your main residence!

[Blue Oval84]

MrChips said:

Can you not exchange subject to vacant possesion on completion? It's quite common for the buying process to take a few months anyway.

This would be my approach if it's possible.

[Sir Bagalot]

Blue Oval84 said:

MrChips said:

Can you not exchange subject to vacant possesion on completion? It's quite common for the buying process to take a few months anyway.

This would be my approach if it's possible.

The vendors solicitors, if they are any good, wouldn't permit that. My concern is that the LL put it both rental and selling market at the same time. If the tenants turn out to be decent they might not even sell

[Spare tyre]

Could open a can of worms, I wouldn't proceed personally unless they were due to leave before completion

[zb]

Depends how the tenant and landlord get on. I had to get a rental at short notice a few years back, landlord was upfront said place had been on market a while (just after crash) and they needed a tenant to make mortgage, 6 month contract but I'd get at least 4 weeks notice.

Only had, literally, a couple of viewings while I was in situ (~3 months). One decided to buy, I got 8 weeks notice but found an alternative almost immediately, and was in the new place within 4 weeks.

[Mk3Ed]

Quick update

Spoke with the bank this morning, and they said they can't see it being a problem, Mortgage documents are valid for 3 months - but they can be extended. They said I wouldn't be able complete until the tenant had moved out, which I have already been told.

The estate agent told me that the owner got impatient and decided to put a tenant in the property to cover costs etc, apparently the tenant is using this house a stop gap while he sorts himself out after a divorce. Obviously not sure how true this is, but he estate agent seemed quite well informed.

i'm going to get more advice about the whole situation and think about it for a week or so, but if a property has a price of "offers over" where do you start with negotiating?

[Beetnik]

Mk3Ed said:

i'm going to get more advice about the whole situation and think about it for a week or so, but if a property has a price of "offers over" where do you start with negotiating?

£10k under the "offers over" price - member of my family has recently completed at £247k on an "offers over £250k" house.