Payibg rent up front

LittleMrsThrifty

My ex is buying me out of our house and I plan to rent for a year whilst I decide where I want to live.

As I will have money in the bank earning very little interest I am considering offering to paying 6 months rent up front in return for a discount on the rent. From the landlord's point of view it would guarantee them no problems receiving thecrent and hopefully that will put me in a good position.

Do you think this would work? And are there any pitfalls for me to avoid?

Fiddlestick

LittleMrsThrifty wrote: »

My ex is buying me out of our house and I plan to rent for a year whilst I decide where I want to live.

As I will have money in the bank earning very little interest I am considering offering to paying 6 months rent up front in return for a discount on the rent. From the landlord's point of view it would guarantee them no problems receiving thecrent and hopefully that will put me in a good position.

Do you think this would work? And are there any pitfalls for me to avoid?

No harm in asking.

tbs624

Any pitfalls? (potential)

Yes.

What if your LL fails to pay his mortgage, you get evicted and the LL disappears with the balance of your upfront rent?

What incentive is there for the LL to look after the property when you have already paid your rent in full and up front?

Some LLs may also not entertain the idea for two reasons:

(a) it's the preferred practice of those who like to operate a wacky baccy factory from a rented property
(b) it may alter the "rental period" and hence the amount of notice the LL is required to serve should he need to get rid of you.

Chris2685

When I tried that, they didn't even entertain the idea.

Upon reflection, I guess the fact is if you have the money in savings then there is no reason you wouldn't make the repayments anyway, and like you say interest rates are low, so there is no real benefit to them to have a lump sum of money all at once.

Ankatden

I would discuss with Solicitor whether this constitutes a Sale under Sale and Rent Back Legislation and unless your ex has FSA approval to do so he will be breaking the law.

Davesnave

I paid 6 months up-front ( I knew the property wouldn't be repossessed) and received a 10% discount, but that was 2 years ago and I was getting >6% on the house sale proceeds at that time.

Now, I agree, there's little in it for the LL, but no harm in trying. A lot depends on the availability of rentals in your chosen area. For example, around me, there are lots of 6 month deals on holiday rental property at this time of year, but if I were looking to buy, I'd want more flexibility than that. After all, it took me 8 months to locate a house when in a similar position to you!

tbs624

Ankatden wrote: »

I would discuss with Solicitor whether this constitutes a Sale under Sale and Rent Back Legislation and unless your ex has FSA approval to do so he will be breaking the law.

I think you may have misread what the OP said. My understanding was that the ex is buying the OP's share of the family home and then the OP will use the proceeds to buy somewhere for herself eventually, but would be renting a separate property in the meantime.

LittleMrsThrifty

tbs624 wrote: »

I think you may have misread what the OP said. My understanding was that the ex is buying the OP's share of the family home and then the OP will use the proceeds to buy somewhere for herself eventually, but would be renting a separate property in the meantime.

You're right, my ex is buying my share of our house (no kids involved) and I'm going into rented for the time being. I do want to buy a house eventually but I can't be sure I'll stay in this location (if a job was to come up elsewhere I could be tempted) so it seems silly to rush into buying now particularly when house prices aren't rising that much.

Thank you for everyones replies, particularly regarding the pitfalls of my plan which I hadn't considered. The fact that the landlord would have little incentive to maintain the property would concern me. I don't want to be without hotwater for weeks! I am hoping that I will be an 'ideal tenant' as a single female with an employers reference. I will have no trouble paying the rent for the kind of thing I'm after and if necessary my parents will acts as guarantor. So I'm hoping this might give me a bit of negotiating power. Fingers crossed.

Callie22

I really wouldn't do it. My partner and I once paid six months rent upfront for a property and it was a nightmare. We struggled to even get the LA to return our calls until about three weeks before we were due to start paying monthly again. It was almost impossible to get repairs done, and I really felt like we were being held to ransom. I personally would never do it again - although I do appreciate that sometimes it's the only way you can get somewhere to live.

theartfullodger

Under whatever deal you do it will be a full tenant/landlord arrangement. Make sure you get a proper tenancy agreement (AST, Assurred Shorthold Tenancy) and ensure your landlord has done all the things they should - protected your deposit, got a gas safety certificate, gained permission from lender - if they have a mortgage - to let, got proper "Landlord" insurance. Insurance matters: If ordinary "householder" insurance & there's an 'orrible fire & you & your mates are 'orribly burned the insurance very probably won't pay out if you're a tenant.. What you won't tell anyone??> Try remembering that when lying in the burns unit..

Oh, and new landlord must declare income to HMRC.. if they don't tell tax man someone else (neighbour, annoyed relative..) will and then tax man will be very very suspicious..

Make sure rent is "market" rent (ie not very cheap) or tax man may decide to tax on market rent.. (!)

Cheers!

Artful

cashbackproblems

i wouldnt do it either, as mentioned what if he sells the property or it gets repossessed, who are u gona chase up then?

Unless he offers u a big discount i.e. 20% not worth the risk.