BTL - with a twist. Long term and tenant funding refurb.
Discussion
Not sure if best in here, Homes or SPL.
I have inherited my childhood home following the death of my father. He'd lived there almost half a century and perhaps fairly typically it needs a good £25k+ throwing at it to bring it into the modern world. I've no real need to do this, and could sell "as-is" but also don't have any specific plans for the money should I do so.
An acquaintance has put a proposal to me. He likes the property, can see the potential and would happily live there the rest of his days (lets say 10-20 years) but doesn't want to buy as he wants to spend his money (no kids to leave it to).
The suggestion he has made (which is similar to an approach I considered) is (figures are just approximate):
- he would fund the refurbishment - say £25k
- he would rent at £200 less than the market rate for a period of 10 years (with regular rent reviews to align with the market rate)
- after this period he would then pay full market rent
- if he/we uncover some major issues the discounted period could be extended, or if the refurb cost is less then the discounted period could be less
I am comfortable that he can afford it and would do a good job of the refurb.
We are both agreed that we need a sensible contract in place that sets out what happens should something go wrong - be it on his side (non-payment/whatever) but also what would happen in the event I met an untimely end to ensure he would remain there for a set period or my estate would refund his outlay should it happen next year for example.
I am also not sure if there are any wider implications compared to a "normal" AST.
Potential pitfalls and suggestions of where to go for advice would be appreciated.
I have inherited my childhood home following the death of my father. He'd lived there almost half a century and perhaps fairly typically it needs a good £25k+ throwing at it to bring it into the modern world. I've no real need to do this, and could sell "as-is" but also don't have any specific plans for the money should I do so.
An acquaintance has put a proposal to me. He likes the property, can see the potential and would happily live there the rest of his days (lets say 10-20 years) but doesn't want to buy as he wants to spend his money (no kids to leave it to).
The suggestion he has made (which is similar to an approach I considered) is (figures are just approximate):
- he would fund the refurbishment - say £25k
- he would rent at £200 less than the market rate for a period of 10 years (with regular rent reviews to align with the market rate)
- after this period he would then pay full market rent
- if he/we uncover some major issues the discounted period could be extended, or if the refurb cost is less then the discounted period could be less
I am comfortable that he can afford it and would do a good job of the refurb.
We are both agreed that we need a sensible contract in place that sets out what happens should something go wrong - be it on his side (non-payment/whatever) but also what would happen in the event I met an untimely end to ensure he would remain there for a set period or my estate would refund his outlay should it happen next year for example.
I am also not sure if there are any wider implications compared to a "normal" AST.
Potential pitfalls and suggestions of where to go for advice would be appreciated.
Gassing Station | Finance | Top of Page | What's New | My Stuff