Had enough of letting / buy to let

jamels2

I am tired of struggling to save money up in order to buy a second property. The first place was meant to be my pension and a year ago I fixed for 5 years on a buy to let mortgage. At that time I thought the tenant was back on track with rent payments, however it's got worse and her own life problems are having a knock on effect with paying the rent properly.
My mind is made up that I will be happy to own one property and pay it off before any other investments.
However I find myself still at the parents a long way off enough for a deposit.
I thought I would be able to rent to get out of the parents but how can I do that when I'm not receiving rent fully from my owned flat?
I think my tenant will probably not go easily solely due to her poor financial situation and inability to find alternative accomodation.
How can I sell to an investor with the tenant still there and a poor record of paying.
If I sell the property I have to pay 4% penalty to the mortgage company.
So what should I do????
Yes I have posted previously so please don't regurgitate my old posts I am trying to look forward and take appropriate action. Thanks for any constructive replies.

Slithery

Why not evict the tenant and move into the property yourself? You may be able to switch to a residential mortgage with the same provider without having to pay the full exit fees.

jamels2

That is possible , would it be wise to use an eviction company ( such as landlord action)?
Tenancy begun July 2015 and changed to periodic automatically in July 2016.
I would have happily rented for a few years until the mortgage ended , providing I was receiving the rent properly. But the tenant has been a headache for the last 6 months.

G_M

jamels2 wrote: »

.......I'm not receiving rent fully from my owned flat?
I think my tenant will probably not go easily .....

How can I sell to an investor with the tenant still there and a poor record of paying. What landord in their right mind would take on a tenancy with a poor tenant?
If I sell the property I have to pay 4% penalty to the mortgage company. Move into it.
.

When does the current teancy expire? If soon, serve a S21 notice - make sure it is valid.

S21 checklist (Is a S21 valid?)

Or serve a S8 using ground 8 or 10 as appropriate.

[Deleted User]

I think the OP said its a periodic tenancy in his last post.

The problem isn't necessarily having a property you are renting out, its the selection of tenant.

If you want to evict her, it sounds like you will have to go through the full eviction process. Depends on the local authority but they may offer to pay off her arrears rather than have to rehome her. But then you'd have to be reassured they wouldn't happen again. If you haven't already, it might be wise to have a frank discussion with the tenant on the way forward, if she can pay the rent. Perhaps advise her to go to a debt counselling service like the CAB or Stepchange (both free).

I don't know if its an option to have any HLA that is presently paid to the tenant (if it is) paid to you directly https://help.openrent.co.uk/hc/en-gb/articles/360002468812-Can-my-tenant-s-benefits-be-paid-directly-to-me-#targetText=Similarly%2C%20housing%20benefit%20is%20usually,other%20benefits%20for%20rent%20arrears

AnotherJoe

jamels2 wrote: »

I am tired of struggling to save money up in order to buy a second property. The first place was meant to be my pension

why would you want, in your retirement years, the hassle of having a tenant.another property to maintain, plus having your whole retirement income based on one single investment subject to the whims of bad tenants and random political decisions?
and a year ago I fixed for 5 years on a buy to let mortgage. At that time I thought the tenant was back on track with rent payments, however it's got worse and her own life problems are having a knock on effect with paying the rent properly.

See what i mean. Fancy that when you are 80?

My mind is made up that I will be happy to own one property and pay it off before any other investments.

Another poor idea. Losing out on the tax benefits of a pension to put after tax money into a cheap loan running at around inflation instead.

However I find myself still at the parents a long way off enough for a deposit.
I thought I would be able to rent to get out of the parents but how can I do that when I'm not receiving rent fully from my owned flat?
The obvious solution, as posted already, unless the areas where you live/work and this place is are very different, is to go and live there yourself. Hardly rocket science.

I think my tenant will probably not go easily solely due to her poor financial situation and inability to find alternative accomodation.
So best get started ASAP then.

How can I sell to an investor with the tenant still there and a poor record of paying.
If I sell the property I have to pay 4% penalty to the mortgage company.
So again, dont sell, live there.

So what should I do????
Yes I have posted previously so please don't regurgitate my old posts I am trying to look forward and take appropriate action. Thanks for any constructive replies.

Evict, live in it, put money in a pension instead of paying off the mortgage too quickly.

Cakeguts

It doesn't sound to me as if the tenant is getting LHA it doesn't mention it. This just could be a tenant who can't manage their money.



The point is that actually the tenant's money problems are not the business of the landlord they aren't the tenant's parent.



The tenant will know that they are in arrears and they don't appear to be bothered to do anything about it.



Ignore the tenant's problems they are nothing to do with you and decide if you want to continue in this situation. If not evict her. She needs to take responsibility for her actions and do something about her financial situation. It isn't up to you to help her. It is up to her to help herself. You wouldn't expect a supermarket to help someone who habitually turned up with not enough money to pay for all her shopping. They would just expect her to buy less.



When you have evicted her move into the flat. The chances are that being evicted will wake her up and help her to realise that she has to do something about her finances.

PasturesNew

One of the problems is not just the tenant's poor position, but that they are concerned about having to pay double to move somewhere else while still renting from you. The expensive overlap.

You could try having a word with her and coming to an agreement that if she does find somewhere else then her financial obligation to you will finish on the day she leaves/hands over the keys and she needn't worry about working out notice dates and any overlap because if she plays fair with you you'll play fair with her.

You could also guarantee her, say, that you will see the flat when she leaves and immediately talk about any deductions from her deposit and get her deposit back to her ASAP, within a day or so if possible.

Thrugelmir

jamels2 wrote: »

However I find myself still at the parents a long way off enough for a deposit.

If it were that easy everybody would be doing it.

Cakeguts

If she leaves with rent arrears make sure you get a CCJ against her. A CCJ acts as a warning to other landlords that she can't manage her financial affairs and it gives them the choice to risk renting to her or not. If all landlords who had tenants who kept getting into arrears and then left the property with those arrears still not paid off got CCJs against the tenants it would mean that the chances of some poor landlord using the rent to pay for something like carehome costs could avoid letting to a tenant with a CCJ.

[Deleted User]

How much of a deposit do you need because in June you had £40k of savings, were receiving £1k a month from an informal loan arrangement plus there's the equity in the rental property.

https://forums.moneysavingexpert.com/discussion/6016971/buy-second-property-or-rent-for-time-being