Inherited property with tenant - selling

Pixie5740

To give you a vague idea about how much a sitting Assured or Protected tenant can affect the valuation of the property here's a news article about a Goldman Sachs's banker who bought on Cheyne Mews for an absolute song because it had protected tenants. Except, since the banker was also their neighbour I'm sure that when he bought it from the original landlord he knew full well that it hadn't been the tenants' main home for quite some time.

http://www.telegraph.co.uk/news/uknews/law-and-order/11757662/Elderly-couple-landed-with-500k-court-bill-after-losing-claim-against-Goldman-Sachs-banker.html

theartfullodger

Of course you can serve notices. Come guys, use your brains!

S8. To evict. Unless seriously behind with the rent you won't get him out.

S13. To increase the rent. To market level: and then a bit more. Why more? Well
, as an Assured tenant he has more security of tenure so higher value to him.

Treat tenant fairly, increase rent , make money out of it.

jcgalliard

Keep_pedalling wrote: »

If you were savvy you would keep some form of proof of the start of your tenancy, and this guy seems to be on the ball.

Read my original post mate.

Not my tenant.

jcgalliard

Keep_pedalling wrote: »

I am not you mate, and I never said it was your tenant.

Okay mate - sorry.

Anyway, why would I keep or more to the point how would I keep 'some form of proof' at the start of the tenancy...I inherited the property along with the tenant.

Hope that makes sense mate.

Keep_pedalling

Actually, as you now own the house he is your tenant.

jcgalliard

Keep_pedalling wrote: »

Actually, as you now own the house he is your tenant.

Errr well aware of that.


Still unsure how I would keep proof at start of tenancy. It started in 1996...He only became known to me this year.

Anyway...looks like auction it is.

booksurr

Keep_pedalling wrote: »

If you were savvy you would keep some form of proof of the start of your tenancy, and this guy seems to be on the ball.

jcgalliard wrote: »

Okay mate - sorry.

Anyway, why would I keep or more to the point how would I keep 'some form of proof' at the start of the tenancy...I inherited the property along with the tenant.

Hope that makes sense mate.

jcgalliard wrote: »

Errr well aware of that.
Still unsure how I would keep proof at start of tenancy. It started in 1996...He only became known to me this year.
Anyway...looks like auction it is.

err, don't you understand that keep pedalling's post uses the word "you" in the context of a general statement, rather than a comment aimed about "you". In any case keep pedalling had quoted, and was commenting upon, a post from GM, not "you".

The statement "If you were savvy you would" does not mean you in the context of your current situation as the new LL, it instead means put yourself in the place of the tenant and in the circumstances of his tenure, it is not unreasonable that an intelligent person would retain some paperwork to show they started living there in year X. Given your surname, is English your second language, and therefore such nuances are lost on you?

jcgalliard wrote: »

Market value: £500k (according to local agent and own research)
How much am I looking at auction?

It will be related to the fact the tenant is paying £900 pcm in rent which gives a gross yield of 2.1% ie. (900x12)/500,000. The London rental market will be very sensitive to the precise location of the property so your mention that it is "an affluent area" is useless as an aid for guessing what it may sell for at auction.

Crucially it will also be related to the fact it is a "sitting tenant" with an Assured tenancy.

How would you feel if it sold for £375k not £500k ie. a 25% discount as mentioned here: http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11151149/How-to-get-60-off-buy-to-let-homes-at-auction-with-lifetime-tenancies.html

[Deleted User]

It seems to me that you can increase the rent gradually so it falls in line with commercial rates in the area, and the property price will continue to grow over time. If it gets £900 a month now, but could be increased to £1,500 over three years or so, surely that will cover all repairs except the roof falling in? Particularly if you are getting £900 per month for no initial investment.

Rather than selling for far less than its worth, if he's no trouble why not just keep the property, knowing eventually you will be able to sell?

I'd also be organising an inspection so you know what state the property is actually in.

The person renting now might refuse to let a valuer in which could be time consuming to deal with, particularly as you don't live in the country.

FBaby

You got three choices:
- you keep things as they are and pocket in the rental. Even if you live in Spain, why isn't this a possibility? Pay a management agency to deal with repairs and the rest. You have a happy tenant.
- you try to sell, struggle as tenant won't let anyone in, and this can go on forever. Tenant and you stressed, not moving forward.
- you increase the rent to market value, tenant can't pay, you give him notice for failure to pay rent. He stops paying all together, he won't go. You have to take him to court. Expect to be challenged, will need to hire a solicitor, come back regularly to the country. Very stressful for you and him, but you should get there at some point unless of course he can actually afford the increase in rent.

paddy's_mum

I think I'd just be thankful that the tenant isn't claiming that he is some kind of partner of the late aunt giving him partial ownership rights.