Buyer needing advice..

JanCee

I wouldn't even consider doing this. The vendors want to have their cake and eat it. They want to sell their house but continue to live in it until they emigrate whilst you have all the hassle of owning two properties and footing the bill for the upkeep of both.

You will need to provide a gas safety certificate and an EPC. The gas cert isn't too expensive but if it is an older property there may be some work required just to bring it up to standard.

Why can't they sell and rent somewhere else until they move abroad. You are taking all the risks here, think carefully before you go ahead with this.

JanCee

The other thing to consider is what would you do if they didn't pay the rent? I know it seems unlikely but you don't know them, could you afford to cover both mortgages while you took action to get them out?

If the answer is no then don't do it.

slummymummyof3

Another thing to consider is, if you are in profit with the rent on the property, you will have tax to pay.

Cashsaver_3

slummymummyof3 wrote: »

Another thing to consider is, if you are in profit with the rent on the property, you will have tax to pay.

What does this mean?
Their rent will be 1000pcm and the mortgage is 606, we will also have a mortgage on our live in place for 396.

Is this really such a bad idea because if it wasnt them renting, it'd be someone else and the plan is for us to live it it when they leave for USA in Feb 2011

Edited to say...Also wouldnt the EPC come in the HIP as we have to get another one since the original is out of date.

Thrugelmir

Cashsaver wrote: »

What does this mean?
Their rent will be 1000pcm and the mortgage is 606, we will also have a mortgage on our live in place for 396.

The profit you make on letting is taxable. In simple terms £1000 - £606 = £394 profit. At 20% tax = £79 per month payable in tax.

You obviously need advice so suggest you speak to the Tax Office if you enter the rental market. Rental income has to be declared to the Tax Office.

As another poster has said. Why don't they sell and move on. They can find someone else to rent for 18 months. Why take the risk of 2 mortgages yourselves?

g_attrill

Thrugelmir wrote: »

As another poster has said. Why don't they sell and move on. They can find someone else to rent for 18 months. Why take the risk of 2 mortgages yourselves?

They are probably wanting to thin down their possessions over the next year or two. If they sold now they would need to turn stuff out now to move, probably put things into storage, then do it all over again when packing to emigrate.

edit: I agree that obviously this is for their benefit, so if possible work it out such that you get none of the disadvantages of being a landlord, but they get the security of knowing their house is sold at a known price and can move out on time. Might it be possible to exchange now and complete in Feb 2011?

mlz1413

I don't think this couple will have buyers queueing up to take on this risk.
1) what happens if they don't go to the USA in 2011?
2) you need a contract agreeing what as LL & T are responsible for, if they want to stay 18 months I would want them to pay for all repairs during that time and for the handover state of the house to be agreed now - ie you don't want the house if the boiler is broken, the kitchen falling apart, carpets stained and garden overgrown and they haven't bother to fix anything.
3) would you be prepared to evict them if you had to?


I agree with the sentiment of other posters why can they not rent somewhere else? They are a family of 4 so renting a 3 bed would be cheaper for them.

If you do offer definately start at £147,500 they can only say no and then you can go up to £150,000.

Also your current mortgage has nothing to do with being a LL and cannot be deducted from the rent for tax purposes. see direct.gov website, tax on rental property for a bit more info.

I am a pessimist so am doubtful that sellers have your interests at heart, but you are in a good position to get agreements sorted out before buying, talk to a solicitor and good one who is local that you go and see and talk to (ie not a cheap or internet based conveyancer). The last thing you want is the house of your dreams turning into a nightmare or costing you £1000s more than buying something else.

Cashsaver_3

If we do decide to pursure this....IF....after reading the advice...... is it possible to make terms as a LL as to what we will be responsible for?
Say for instance, if the boiler did go wrong in the first 6 months, that'd be their responsibility.

Or if this isn't possible, if they agree a selling price, could we say we want it fully serviced before exchange etc.....

Or any other tips you know of??

Thanks again for all your advice.

Cashsaver_3

UPDATE, the original offer was refused so the ea has told the vendor to let him know tomorrow where they will come down to so we eliminate the to-ing and fro-ing.
I'm a bit nervous and worried now because i had a plan and now he's stopmed on it with his decisiveness lol.

if their bottom price is still higher than my ceiling, where do i go from there?

mlz1413

"if their bottom price is still higher than my ceiling, where do i go from there? " - say goodbye!

This house has a lot of potential problems if they don't want to accept your top offer then walk away, there will be more houses.

If they do go for your top offer ensure they are aware its subject to the solicitors drawing up agreements you are happy with.

"Or if this isn't possible, if they agree a selling price, could we say we want it fully serviced before exchange etc....." - again talk to your solicitor he is the qualified legal advisor working for YOU.