How to find an investor?

Needadvice1

I have a house in somerset worth around £165000, my son his wife and his children have been renting the house from me for 9 years, full market rent. I need to sell the house before October 2017 because of my age. I would like them to stay in the house so am willing to sell the house to an investor for £20000 less than the market value, however the buyer will have to allow my son and his family to continue to rent the house for a period of 15 years, this is when his children will have left school. Does any one have any ideas how i might find an investor who might be interested in this kind of arrangement? Thanks

Foxy-Stoat_3

If you want to sell it, speak to an Estate Agent.

Unfortunately you cannot legally tell the new owner who can live there and for how long.

Thinking outside the box, can you not sell it to your Son and his Wife at the reduced price so they don't have to find as much deposit for the mortgage?

Running_Horse

Does your son work?

princeofpounds

Why not give your son 20k and then he (maybe) can buy it. Or cut the price by 20k and sell to him.

MisterB1959

in answer to your question, no!


UNLESS


the property really is worth what you say but you sell for a fraction of the cost. I doubt it would be too much of an issue to get a tenancy agreement for 15 years written up BUT there has to be something in it for the landlord


most landlords would love a tenant who will say there for 15 years and pay the full market rent etc etc

Pixie5740

I seem to remember there being some "issues" surrounding tenancy agreements that are for 7+ years. In that tenants might have more rights but I can't be sure. I'll have a look and see if I can find something.

maninthestreet

What investor will want to tie up their money for 15 years?

Foxy-Stoat_3

maninthestreet wrote: »

What investor will want to tie up their money for 15 years?

Most Landlords with BTL mortgages !

Jonbvn

Pixie5740 wrote: »

I seem to remember there being some "issues" surrounding tenancy agreements that are for 7+ years. In that tenants might have more rights but I can't be sure. I'll have a look and see if I can find something.

Would that be a protected tenancy? If it is then no LL or lender would touch such a property with a proverbial bargepole.

http://www.landlordlawblog.co.uk/2010/11/02/let%E2%80%99s-hear-it-for-protected-tenancies/

BTW, I doubt the OP will find a buyer who needs a mortgage would every agree to what is proposed. Basically it has to be a AST for the lender.

AdrianC

Needadvice1 wrote: »

I ... am willing to sell the house to an investor for £20000 less than the market value

On that basis alone, you may well find somebody willing to buy the place with sitting tenants. Any EA should be able to advise you. One question - what's the rental yield?

however the buyer will have to allow my son and his family to continue to rent the house for a period of 15 years

Yeh, good luck with that... Any potential buyer doesn't know your son from Adam. How do they know that he won't lose his job and be unable to pay rent? Split up with his missus? Turn out to be the demanding tenant from hell?

Seriously, if you want to guarantee your son's continued residence in the property, you really want to figure out a way of selling it to him. You've already said that a substantial discount on market value is acceptable. Your son has proven that he can pay a fair market rent - which, for a BtL buyer - has to be a decent yield, a slice above likely mortgage payments. So if he can't get a mortgage, why not work out some kind of deal whereby he continues to pay you as currently, but he takes ownership? You make no mention of a mortgage currently, and I doubt many lenders would be happy with family as tenant, so I presume it's owned outright. In which case, it's just a private arrangement between you. You get hassle-free income, he gets security of tenure.

A quick google finds typical SVRs around 4.25%. £145k repayment over 25yrs would be £785/mo - yes, that's a bit over a 5% yield (based on full £165k) rent of £690. But if your comment about age can be extrapolated slightly, an interest-only mortgage of £514/mo would be cheaper - and the bigger-picture difference would not be significant, if he was expecting to inherit the property anyway.

The one thing that you might need to take into account would be deprivation of assets should you or your wife need care, but I'm assuming you already own your own home in addition, and probably other investments?

tea-bag

I don't understand why the son don't buy the house? Or is there benefits involved?