buying my current (rented) flat

ag359

I'm considering putting in an offer on the flat that I'm currently renting. I have just been doing a bit of maths - we're paying about 12500 a year in rent, so I figure that 250000 is the price where it becomes more profitable for the landlord to take my offer (based on the fact that he could invest the 250000 at 5% and make 12500 a year from it). Given that he must also pay some fees etc to the letting agent who manages the property, I suspect that the 250000 "break-point" figure for him would in fact be considerably lower, maybe 230-240k.

Having said that, I would have thought that if the property was put on the market by an agent, it would go on at around 270-280k (based on the prices of other places we've looked at). I also know that the property sold for 205k in mid-2003, which suggests a slightly higher value.

So my question is this - what do you think might be a reasonable offer, i.e. as low as possible that would still attract the landlords attention and might at least encourage him to negotiate even if he didn't accept it outright. I was thinking of trying about 230k.

Any advice much appreciated. Let me know if what I've tried to explain isn't clear.

Lazy_Runner

As an owner, you would look around and see what comparable properties are going for.

And lets say your landlord came to a valuation of 280k.

Why should he sell it for much less than that?

Having said that, bird in the hand and all that.....

You could negotiate;

Start at 240k and move up to 250k as your top price because of the increased stamp duty in the next band?

ag359

Yes I agree that if it's worth 280 he'd be stupid to sell it, but having said that I was more trying to figure out if there's any chance of me being 'lucky'. I thought that maybe because of the maths I outlined above, the fact that he may not be aware of the exact value as it isn't on the open market, and the fact that selling to me is probably the easiest option for him (no EA fees, he knows i'm trustworthy, no empty flat if I find somewhere else to move and he has to look for a new tenant), there might be a possibility of him accepting a low offer.

Thanks for the advice. Am thinking of going in with 235k; as you say, I really don't want to go over 250k if it can be avoided as I can't really afford the extra 5k stamp duty.