buying house from our landlord

Snazzy

girleight@ has got me thinking. Would it be an option for you to buy your retirement property soon but rent it out until you need it? The tenants would then be paying off your mortgage and you'd continue to live cheaply where you are.

clutton_2

if you are on certain benefits - you should contact WarmFront and see about getting your heating system upgraded for free - tenants can apply and it wont cost the LL a penny.

neverdespairgirl

bookduck wrote: »

Mmmmmm! How would the new tenants that move in get to know of it being rent controlled? Could the new owner not keep quiet and just advertise it as normal?

No - the rent control relates to the sitting tenants, not to the house, so the tenants stay there.

bookduck

neverdespairgirl wrote: »

No - the rent control relates to the sitting tenants, not to the house, so the tenants stay there.

I'm confused! So the tenants bought the house and sold it for 75% of the market value?

neverdespairgirl

No. Some random company bought it, for 75% of what it would have been worth without the tenants, and inherited the tenants with the house.

beingjdc

girleight@ wrote: »

If you could afford £1600 a month then couldn't you save £1000 a month and use that as rent when you are older?

Exactly. You say "a mortgage will end", but only if you pay more than the interest. You're talking about a level of borrowing that would be £1000 a month in interest, so at £600 a month in rent you should be able to put whatever you would pay on the mortgage capital, PLUS £5000, into an ISA. Call it £6000 total.

Do that for ten years and you'll have £84,000. Far more than you would have paid off on your mortgage, and more than you'd have in equity unless house prices rocket (not looking very likely).

franklee

beingjdc wrote: »

Exactly. You say "a mortgage will end", but only if you pay more than the interest. You're talking about a level of borrowing that would be £1000 a month in interest, so at £600 a month in rent you should be able to put whatever you would pay on the mortgage capital, PLUS £5000, into an ISA. Call it £6000 total.

Do that for ten years and you'll have £84,000. Far more than you would have paid off on your mortgage, and more than you'd have in equity unless house prices rocket (not looking very likely).

I thought the whole point is that absyandtigger could buy the property at well below the vacant market value as they have a secure tenancy that makes the property worth less and *very* unattractive to other buyers. Then they can (presumably) surrender the secure tenancy to themselves once contracts are exchanged so the property is then worth more on the open market giving them instant large equity, flexibility what they do with the property and the ability to sell up at full vacant market value in the future.

The problems being how to establish price at which to offer or bid up to at auction and how to fund the purchase.

beingjdc

franklee wrote: »

I thought the whole point is that absyandtigger could buy the property at well below the vacant market value as they have a secure tenancy that makes the property worth less and *very* unattractive to other buyers. Then they can (presumably) surrender the secure tenancy to themselves once contracts are exchanged so the property is then worth more giving them instant large equity, flexibility what they do with the property and the ability to sell up at full vacant market value in the future.

The problems being how to establish price at which to offer/purchase and how to fund the purchase.

I thought the general consensus was that nobody here really believed the landlord's claim about what the open market value is, at least at face value and without further evidence!

If the landlord is correct as to the value, then of course everything changes - and I'd personally go with the option of offering to let them buy you out of the tenancy for around £100k cash. Everybody wins.

franklee

beingjdc wrote: »

I thought the general consensus was that nobody here really believed the landlord's claim about what the open market value is, at least at face value and without further evidence!

If the landlord is correct as to the value, then of course everything changes - and I'd personally go with the option of offering to let them buy you out of the tenancy for around £100k cash. Everybody wins.

So what if the landlord's figures are overblown? It's still obvious that having secure tenants of 40 years young and with the right to pass that on to a relative affects the market value of the property hugely. So the tenants can get their own survey to get the market value with them as secure tenants and use that as a basis to offer or bid at auction. Dissolving the tenancy will still produce a return to a much higher vacant market value. If the landlords figures are too high and he refuses to sell at a sensible price then the tenants can still have a crack at auction where hopefully there won't be much competition.

franklee

absyandtigger, The is a lot of money at stake here so get some professional advice on the valuations, how to deal with the tenancy and how/if it could be done raise to the funds. I hope you let us know how you get on.