Buy flat and rent temporarily to current owners until they find where to move?

leo.ge

Hello!
I am looking to invest into property, and I found a good flat, but the current owners are also looking for their new home, so I am afraid it may have a long chain which I will not know when it ends.
Can I give them an offer that I buy it now and if they don't find anything within say 3 months, I become the owner and they will rent it from me for any period required for them to find their new home?
It looks to me a good deal for both sides.
Is this something that people normally do?
Thanks!

user1977

No, people don't normally do that, and there are laws regulating buy and lease-back deals so you're probably not allowed to do it.

Leaving that aside, are you actually intending this to be a buy-to-let property and are you happy with the risk of these people becoming long-term tenants (given how difficult it is to evict tenants, particularly at the moment)?

fewcloudy

leo.ge said:

Hello!
I am looking to invest into property, and I found a good flat, but the current owners are also looking for their new home, so I am afraid it may have a long chain which I will not know when it ends.
Can I give them an offer that I buy it now and if they don't find anything within say 3 months, I become the owner and they will rent it from me for any period required for them to find their new home?
It looks to me a good deal for both sides.
Is this something that people normally do?
Thanks!

No I do not think it is something that people normally do.

Because normally people are not landlords and wouldn't know the first thing. But as you say you are wanting to 'invest' in property, maybe you do know what you are doing?

Snookie12cat

Don't enter into rentals unless you know what you are doing and letting yourself in for. There is a lot of legal things you need to do and compliance.
If you are happy to take this one, then I don't see why you cant.

theartfullodger

As a sale and lease back they would (regardless of paperwork) have 14 days cooling off period and a minimum 5 year tenancy.  Still sure you think this a good idea?

BlueC

I asked the same question a few weeks back...

https://forums.moneysavingexpert.com/discussion/6308390/purchasing-btl-but-vendor-wants-to-stay-on-can-we-issue-tenancy-to-vendor/p1

Basically it's pretty much impossible to do. Lenders won't allow it. And you can fall fowl of some pretty serious legislation.

Snookie12cat

theartfullodger said:

As a sale and lease back they would (regardless of paperwork) have 14 days cooling off period and a minimum 5 year tenancy.  Still sure you think this a good idea?

Could they not get a BTL mortgage instead and rent it on an AST to them? That being said, why the hell would you put yourself through all this - its a different mortgage, different terms and the ERCs just for a few months.

leo.ge

Ah I see, it's a lot of hustle. Will look for properties without chain then. Thanks!

Snookie12cat what did you mean by "Don't enter into rentals unless you know what you are doing"?

Is it not common to rent property to people? Estate agents manage lettings, so you - the owner don't need to do much (am I wrong?)

leo.ge

In fact, my concern with buying property which has chain is complete uncertainty. 
Back when I was buying my own flat, I made an offer on some flat and waited for 6 months and finally I was told that the owners are still looking for the property to move. So I had to give up. It was really frustrating. I don't want this situation again, because you cannot make offers on several properties in parallel, and once you made offer you are stuck and you depend on an unknown number of people whom you have never seen.

How do normally people get some certainty/assurance of the date when they get their property if there is chain?

theartfullodger

leo.ge said:

..................

Is it not common to rent property to people? Estate agents manage lettings, so you - the owner don't need to do much (am I wrong?)

Oh dear: Oh dear, is this a wind up?

The landlord always remains liable (although sometimes they may have claim on agent).

Remember, in England, a lettings agent requires no qualifications, no training, no criminal records check.  The whole office may be staffed by ex-convicts on early release from Brixton Jail from their sentences for GBH & Fraud.  Other countries do these things better.

Artful: Landlord since 2000.

Snookie12cat

leo.ge said:

Ah I see, it's a lot of hustle. Will look for properties without chain then. Thanks!

Snookie12cat what did you mean by "Don't enter into rentals unless you know what you are doing"?

Is it not common to rent property to people? Estate agents manage lettings, so you - the owner don't need to do much (am I wrong?)

Based on this reply - you should not do it.

Renting is very risky, its hard to evict tenants and you have a lot of liability as a landlord. You need to treat it as a business whether an agent manages it or not. You need electrical and gas checks at a min and then you have the pitfalls if you have a tenant that does not play ball, trashes your house, does not pay you any rent and any legal costs associated with that. A lot of landlords go into it because they have no choice or think it will be easy and then get into trouble because they don't get rent and need it, because the tenants do not leave or cause thousands of pounds worth of damage.
If renting was easy money and didnt require outlay or effort then so many landlords would not be dropping out the market.