Is this a good idea letting tenant stay while trying to sell

TallGirl

Just wanted to make sure there aren't any things I haven't thought about in this scenario and you guys are very knowledgeable.

I've rented out my previous marital home on the South Coast (Hampshire) since Oct 2016 and my current tenant has been there 1 1/2 years and her fixed term ast ends 31/3. She texted today as she wants to give notice although she loves the place she needs cheaper rent as she's buying her business. She has been amazing and keeps the place so well.

My plan is to offer her rent on a rolling contract of £900 a month (£400 cheaper than now and what she's indicated she can afford) on the condition she lets me market the house and she can then stay until it sells. I know all about section 21s and having to get things right to get tenants out before a sale but is there anything else I'm missing? I've not asked her yet or let the letting agent know but that is next step.

I'll get someone to check out the outside to make sure nothing needs doing inside was painted and recarpeted when I let it out the rest is tiled and solid wood floors. Bathrooms are 7 years old and neutral. Kitchen original but very plain with new cooker for a 1995 house lol.

The place is near a popular school and I'm actually hoping myself to buy a larger property in pretty much the same area when I return mid August. I can rent until it's sold or even move back in should the tenant leave before it's sold if it's after August,

Should I still get three estate agents in or is that too much hassle for the tenant. The proptery is 25 years old I've had it from new and there are similar sales in the area so I know what they go for. What's the fees these days should be an easy one maybe I can haggle on the commission?

Anyway hope to get some wisdom I know many of you are currently buying and selling would a tenant but you off.

Thanks

TalGirl

hazyjo

Done it before, but the vast majority wouldn't start spending money on buying a property until the tenants are out. Could take 6 months to evict so buyers understandably don't want to spend out in case it all goes sour.

timeism0ney

It's inconvenient for the tenant but the tenant may be willing to put up with it at discounted rate. However moving the tenant out quickly after the sale is agreed may not be possible - finding a new suitable rental property takes time.

Thrugelmir

Would the loss of rent for a period of time be an issue for you?

Crashy_Time

If it doesn`t sell you are locked into a long term rent reduction if she stays, and if she gets even cheaper rent she may leave anyway?

eddddy

It depends on...

a) How much you trust your tenant. Will she decide that £900 is a really nice rent, and so sabotage viewings and/or refuse to leave in due course?

b) Whether buyers will be nervous about proceeding with a purchase with a tenant in situ.

People here always advise prospective buyers not to to proceed (i.e. pay money) whilst tenants are in situ.

But, FWIW, it worked fine on a recent sale I was involved with...
Tenant moved out on Thursday (as promised), contracts exchanged on Friday, completion 7 days later.

But maybe there was a big element of good luck!

TallGirl

Thanks for all comments really gives me food for thought I'll have to look into if it's possible to make the rent reduction limited in case it doesn't sell obviously without creating a new fixed term tenancy.

Tenant will be on a rolling contract so I can always serve notice as I'll move back in myself in Aug if it hasn't sold. I can afford not to have the rental income but it's more leaving it empty as I live in London.

Agree about trusting the tenant she's single with one cat she did live with her grown up son so hopefully not too tricky to find somewhere else.

getmore4less

CAT.......

how easy will it be for her to find a new place?

Lowering the rent may make staying too easy and you need to create an incentive to assist leaving.

Since you will be back in Aug what about delaying your plans to sell/buy and to keep it relatively simple with offer of the reduction for 5/6 months to avoid the potential void/new tenant and hope that she stays that long.

Or maybe a 1/2 reduction now and a cash back incentive of the rest to leave by Aug

Move back in and you have total control over the sale/purchase cycle.

Ozzuk

You are relying on their good nature to continue. Sadly, just a glance at these forums will show you many stories where promises change, agreements break down. It could go fine, they appreciate the reduction and flexibility, or...they put people off (easy to do) to carry on getting reduced rent, refuse to move out, pull on heart strings that they need another month due to business starting - then your buyer pulls out. High risk IMO.

Much easier to sell a property that is empty - how is the market in your area?

Comms69

TallGirl wrote: »

Just wanted to make sure there aren't any things I haven't thought about in this scenario and you guys are very knowledgeable.

I've rented out my previous marital home on the South Coast (Hampshire) since Oct 2016 and my current tenant has been there 1 1/2 years and her fixed term ast ends 31/3. She texted today as she wants to give notice although she loves the place she needs cheaper rent as she's buying her business. She has been amazing and keeps the place so well. - Sounds like an excellent tenant.

My plan is to offer her rent on a rolling contract of £900 a month (£400 cheaper than now and what she's indicated she can afford) on the condition she lets me market the house and she can then stay until it sells. - That's a nice idea; but what happens when you sell but she's not move out? You would need to evict and that can take 6 months and longer I know all about section 21s and having to get things right to get tenants out before a sale but is there anything else I'm missing? I've not asked her yet or let the letting agent know but that is next step.

I'll get someone to check out the outside to make sure nothing needs doing inside was painted and recarpeted when I let it out the rest is tiled and solid wood floors. Bathrooms are 7 years old and neutral. Kitchen original but very plain with new cooker for a 1995 house lol.

The place is near a popular school and I'm actually hoping myself to buy a larger property in pretty much the same area when I return mid August. I can rent until it's sold or even move back in should the tenant leave before it's sold if it's after August,

Should I still get three estate agents in or is that too much hassle for the tenant. The proptery is 25 years old I've had it from new and there are similar sales in the area so I know what they go for. What's the fees these days should be an easy one maybe I can haggle on the commission? - honestly it depends on the area and what you want. There's online fixed fees that cost very little; or bespoke sales agents who cost a lot more.

Anyway hope to get some wisdom I know many of you are currently buying and selling would a tenant but you off.

Thanks

TalGirl

Who are you marketing this at?


Investors? Families?

TallGirl

Thanks for the comments really appreciated I havent made the offer to the tenant I agree it needs to be a time limited offer of the low rent and I need the option to move back in in August if it isn't sold by then. The market used to be good in my area but I've been away for over three years but I'm mortgage free and as I've owned it for that long it's increased substantially. Its a popular area for investors as they are family size detached houses. Looked at Zoopla and you can see the majority in that Close has never changed hands from new or last sale price is many years ago. It's the same in the next road where the houses are slightly bigger and I ideally would like to buy myself. Same developer same type of houses. I know Zoopla is rubbish re pricing don't worry.

Re agents I couldn't go with online fixed fee need someone to show people around as I'm not there. Agent I've spoken to has two properties for sale in nearby roads and they often have sales but there are loads of agents in my town. I know the horror stories of tenants not moving out when they should and I know all the delaying tactics that can be done in court however empty house from April to Aug is to me a risk too. Decisions decisions.