Have you come across any property descriptions that state that the flat or house is tenanted? This can mean a variety of things, so proceed with caution!
There shouldn’t be much to worry about the majority of the time. The renters will rent the property for six to twelve months. You may also want to retain them while you’re buying the property as a buy-to-let investment.
Whether you’re buying to live there (and you’re having a mortgage), the terms of your mortgage would require them to be out before you exchange agreements, so what you have to do now is figure out what the seller will serve them notice (tell them to leave).
However, There Are A Few Precautions To Take:
What Are The Exact Terms Of Their Tenancy Agreement
You’ll want your attorney to look over it with a magnifying glass to make sure there aren’t any odd words in there that might sabotage your investment. Terms that even the seller may be unaware of or have overlooked (large buy-to-let tenants may have hundreds of properties and may not recall each contract).
Perhaps the tenancy agreement has a year left to run and the owner is unable to serve them with notice if they want to extend. Test everything, and double-check everything.
Is There A Problem Between The Tenants And The Seller?
This doesn’t necessarily mean they’ve ended up in court, but it’s possible they’ve stopped making payments until a specific issue is resolved, such as a broken window that both landlords and vendors blame on one another.
You don’t have to get involved in the dispute, because if there is one, the renters will dig in, and the case may take months to work its way through the courts. You’ll waste money on attorneys and assessors just to see the purchase suspended before a court has time to consider both sides’ arguments. And so, the judge’s decision can be ambiguous, instructing both parties to work again to reach a solution and to return after three months if they are unable to do so.
Tenanted properties where the tenants and the seller are at disagreement are a no-go zone. This is the time to go on.
Tenants on regular 6- or 12-month lease arrangements have bundles of protections that “Sitting Tenants” do not.
You can’t really serve notice to them (ask them to move out). They are the only ones who can make this decision. The amount they pay, as well as any rent rises, will be specified in the rental agreement and may be well below market value.
The renters’ rights may be passed on to their descendants, which means they or their descendants may live there long after you and I are gone.
There is a lot of Proptech Software to search for Tenanted Properties online. However, I can assure you that DealSourcing.co is the most transparent and reliable sourcer available. This PropTech Software is able to optimize this process and transform it into a database that acts as your personal property tracker. Thanks to algorithms and automation, the service can recognize properties from all over the internet and sort them by ROI.
It helps you save time, money, and effort! The ability to discover High Yield Properties is the platform’s core innovation. DealSourcing.co is a no-brainer if you’re hunting for UK Tenanted Properties.
The system also calculates the return on investment on every Rightmove, Zoopla etc property and identifies properties for sale that are under market value, saving investors hours of research time.
DealSourcing.co‘s Top 3 Most Useful Use Cases:
- BTL & HMO Deal Analyser
All of your property spreadsheets should be removed and replaced. They do not use a spreadsheet or calculator to measure the cash flow for each contract. Calculate the total offer, including all costs, Stamp Duties, profits, and also the possibility of leaving cash on the line.
- Find High Yield properties by location
Data from almost 500,000 homes in England, Scotland, and Wales are analyzed. Their main objective is to figure out which postcodes provide the highest buy-to-let earnings.
- Find negative equity properties by location
If a property is worth less than the debt secured on it, it is said to be in negative equity. They assist you in locating those offers based on your location.