Buyer needing advice..

Cashsaver_3

We are looking to buy a property that is on the market as B2L.
The owners want to be the tenants until feb 2011 after which they emmigrate.
We would then want to occupy the new property and hopefully sell ours. (We really dont want the hassle of being long term landlords).

At the moment we have the property we are living in that we dont want to sell until we occupy the new one.
We have already looked into a mortgage on the new property but it would mean adding to our existing mortgage to be able to afford it.
The new property is on the market at 165k and has been on since oct 08.

This is where the dilemma starts...

If we pursure the new house, our mortgage would be around 165k (lets assume we paid full whack) with some being on our live in propety and the rest on the new one. We intend being there for many yrs its a 4 bed with lots of bonusses compared to our 2 bed. (oh and we have really fallen in love with it).

On the other hand, we have been overpaying on our current house for many years and if we continue in this way, we will have this mortgage paid off by Dec 2010.

Really, the advise i'm looking for is...with the market as it is now, what would you do? Is the market strong enough for this kind of move.

Just another point which may help....If we end up with both properties and no sale or tenant, we can still comfortably pay both mortgages and upkeep.

Thanks for you suggestions..

princessamy86

I think it mainly depends on what it means to you: is it more important to pay your mortgage off quickly, or is it more important to have the property of your dreams? Being landlords can be far more complicated and costly than you might think, so do some research (from other posts on here it would seem that landlordzone is very helpful). Once you know the potential pitfalls, then you will be able to make a decision based on fact.

Fire_Fox

If you have guarateed tenants until February 2011 won't buying the house have little effect on your finances?? I'd make sure the agreed rent covers as much of the new mortgage as possible; you might consider asking for the full amount up front as then you know for sure you will be paid. Or are you planning on getting a decent discount on the new property as it has sitting tenants?

Cashsaver_3

We were hoping to go in at around 150k and negotiate from there.

And yes the rental from the tenants until feb 2011 will pay both mortgages with maybe 5 pounds left.

the thing for me is...the vendors ARE the tenants too. they are selling so they are free for when their move comes into place.

we would only like to rent the house until feb 2011 and then sell our smaller place but we are mainly worried about the prices going down leaving us with neg equity on the place we live in as we would have to remortgage it.

princessamy86

Could you switch it round in 2011 though, and rent out your smaller place if you were in negative equity? It's a bit difficult to predict whether or not prices will go up or down.

DVardysShadow

Cashsaver wrote: »

... we would only like to rent the house until feb 2011 and then sell our smaller place but we are mainly worried about the prices going down leaving us with neg equity on the place we live in as we would have to remortgage it.

As long as the new place was good for a mortgage, you could mortgage on that and provide funds to pay off the old place

mlz1413

I don't understand why the current owners want to be tenants for 18 months in their own home?

Why not just agree with the owners that you want to buy it but in 2011 when they go? That way you don't have to be LL's and you agree the price at the time of purchase.

Unless the owners have a really good reason to sell out now I would be very wary as you will be responsible for all the repairs once you are the LL ie new boilers, oven, doors, roof etc.

Or could you not house swap, ie give them the extra money between yours and theirs and then it's up to them to sell 'your' house before they emigrate.

princessamy86

Or could you not house swap, ie give them the extra money between yours and theirs and then it's up to them to sell 'your' house before they emigrate

That's such a good idea, you could part exchange then they have a smaller property to sell which is usually easier than a bigger property

Cashsaver_3

The part exchange idea is a no go as they are a 4 ppl family and need the space but...you have given me an idea about asking them about buying it in 2011..........
Gonna go chat with relevent ppl. At worse they'll say no.
Will update soon and thank you all for the advice.

Cashsaver_3

Doesnt look like the wait is a goer either.
I still think i'd like to go for it though. It seems pretty sound to me.

Couple of questions again though....sorry...
1) the property is marketed for 165k and was originally on with a different EA at 170k so this EA said the already took a signifucant drop. Do you think 147,500 is taking the **** or shall i really go in at 150,000
2) I am a little worried about the boiler. Its an old hot air system that they say is maintained every september by a local bloke. What do you think (if anything) i should do about the worry of it because the thing is... if we buy and the boiler has to be replace within 2-3 months, thats another massive cost to us. Would asking them to get the boiler serviced again be out of order? Its for their benefit too as they will be renting

Cashsaver_3

I have another question...
I was thinking of sending a letter to the EA via email for them to pick up on Monday morning with the initial offer, is this a good way of offering?

Thanks again