Tenant inside - how to spot whether seller has problems getting tenant out

movilogo

you said you bought properties where the I's moved out before exchange - but if I was a seller I would not go for that just in case you backed out then the seller won't have an income and may not be able to sell for a few more months.

This is a chicken and egg situation. Buy to Let is a business and all businesses come with risk. When a BTL owner selling property, it means he is exiting the business. So that risk a seller has to take. 

Sandtree

Ath_Wat said:
A vendor should really sort all this out before putting the house on the market - unless he is hoping an investor will take it on as a going concern, of course.

Depends if they can afford to have the property empty.

Our previously landlord had lived in the flat until he had a family. Couldn't afford to buy a house in the area and so rented one a little further out. He put the flat on the market after he lost his job as the company went bust, only been there 2 years so minimal monies paid and he was struggling to find a new job. 

He had over £400k of equity in the flat (he thought more) but no cash to pay his own rent with. 

Ath_Wat

Sandtree said:

Ath_Wat said:
A vendor should really sort all this out before putting the house on the market - unless he is hoping an investor will take it on as a going concern, of course.

Depends if they can afford to have the property empty.

Our previously landlord had lived in the flat until he had a family. Couldn't afford to buy a house in the area and so rented one a little further out. He put the flat on the market after he lost his job as the company went bust, only been there 2 years so minimal monies paid and he was struggling to find a new job. 

He had over £400k of equity in the flat (he thought more) but no cash to pay his own rent with. 

Their business plan should allow for having the property empty for a while before being sold, or they should sell it as a going concern.  If your landlord didn't want to run the standard risks of having a rental business he should have sold the flat when he left it.

matthew91822

F37A said:

Hi 

I feel these properties quite risky to take on as no guarantee tenant will exit.

How can a buyer have certainty that the tenant would exit the property on time without buyer incurring too many costs

suppose you can see if any disputes arisen but problem tenant often hidden to buyer. 

Thanks

As someone in the process of selling a buy to let property to a buyer who want to live in it, be incredibly wary.

When we first looked into selling we were open with the tenant about it giving them much more notice than a section 21. They found a new place but it fell through. Tenant then seemingly out of nowhere became incredibly difficult and aggressive, and has since stopped paying rent so now we have to go through the courts to gain possession, it will likely take all the way until bailiffs to evict the tenant which will at the minimum be 3 months.

We are ready to exchange with the buyer but we can't until there is vacant possession. Luckily they're incredibly patient and had an emotional attachment for the house so will wait.

Now looking back I wish I had waited for possession in order to sell so that it was chain free and much quicker.

Silvertabby

A work colleague viewed a house on the understanding that it was being offered as 'vacant possession'

The tenant met him at the door with a big smile - and a long list of problems that he expected his 'new landlord' to sort out as soon as he bought the property.

End of viewing. 

diystarter7

Silvertabby said:

A work colleague viewed a house on the understanding that it was being offered as 'vacant possession'

The tenant met him at the door with a big smile - and a long list of problems that he expected his 'new landlord' to sort out as soon as he bought the property.

End of viewing. 

"vacant possession" means just that.  I'm a bit lost about your contradictory post. Why would a possible buyer having met the T live there not go ahead and buy if the property is being offered with vacant possession as you stated.
 

Gavin83

The only way to guarantee that the tenant will leave on time is to pay them to do so. Of course that comes with it’s own problems/risks but it’s an option none the less.

It’s obvious why a landlord would sell the property with tenants still present. It’s less obvious why a buyer would buy such a house but I guess there’s still very little on the market.

K_S

F37A said:

Hi 

I feel these properties quite risky to take on as no guarantee tenant will exit.

How can a buyer have certainty that the tenant would exit the property on time without buyer incurring too many costs

suppose you can see if any disputes arisen but problem tenant often hidden to buyer. 

Thanks

@f37aI'll sound a slightly more positive note here. Since covid, I have had a higher than usual number of FTBs buying properties from landlord vendors, with tenants in at the viewing stage.

Other than the usual conveyancing delays, I'm not aware of any of these transactions being overly delayed or falling through because the tenants wouldn't leave at all.

Caveat - we're a small firm and most of the above were flats in London where there is a high turnover of tenants anyways, so this may or may not be representative of the rest of the country or your particular case.

diystarter7

matthew91822 said:

F37A said:

Hi 

I feel these properties quite risky to take on as no guarantee tenant will exit.

How can a buyer have certainty that the tenant would exit the property on time without buyer incurring too many costs

suppose you can see if any disputes arisen but problem tenant often hidden to buyer. 

Thanks

As someone in the process of selling a buy to let property to a buyer who want to live in it, be incredibly wary.

When we first looked into selling we were open with the tenant about it giving them much more notice than a section 21. They found a new place but it fell through. Tenant then seemingly out of nowhere became incredibly difficult and aggressive, and has since stopped paying rent so now we have to go through the courts to gain possession, it will likely take all the way until bailiffs to evict the tenant which will at the minimum be 3 months.

We are ready to exchange with the buyer but we can't until there is vacant possession. Luckily they're incredibly patient and had an emotional attachment for the house so will wait.

Now looking back I wish I had waited for possession in order to sell so that it was chain free and much quicker.

matthew91822 said:

F37A said:

Hi 

I feel these properties quite risky to take on as no guarantee tenant will exit.

How can a buyer have certainty that the tenant would exit the property on time without buyer incurring too many costs

suppose you can see if any disputes arisen but problem tenant often hidden to buyer. 

Thanks

As someone in the process of selling a buy to let property to a buyer who want to live in it, be incredibly wary.

When we first looked into selling we were open with the tenant about it giving them much more notice than a section 21. They found a new place but it fell through. Tenant then seemingly out of nowhere became incredibly difficult and aggressive, and has since stopped paying rent so now we have to go through the courts to gain possession, it will likely take all the way until bailiffs to evict the tenant which will at the minimum be 3 months.

We are ready to exchange with the buyer but we can't until there is vacant possession. Luckily they're incredibly patient and had an emotional attachment for the house so will wait.

Now looking back I wish I had waited for possession in order to sell so that it was chain free and much quicker.

Sorry to hear about that but I'm glad it may be soon over.

Sadly, I've heard many stories where the owner/LL is selling up or wants to move in, decor etc as it is their property and the ok/reasonable T turns.

Decent T's are hard to come by and most LL's don't want smokers/pets etc rightly so as the properties are often damaged/smells etc.  However, there are quiet a few decent T's and LL's out there and if you meet one stay with them.

The law should change where a T has been given legal notice leaves on that date or high court sherrifs evict them, no ifs no buts.

Non-conforming LL's need to be fined etc once they are given a date to fix something.

Sandtree

Ath_Wat said:

Sandtree said:

Ath_Wat said:
A vendor should really sort all this out before putting the house on the market - unless he is hoping an investor will take it on as a going concern, of course.

Depends if they can afford to have the property empty.

Our previously landlord had lived in the flat until he had a family. Couldn't afford to buy a house in the area and so rented one a little further out. He put the flat on the market after he lost his job as the company went bust, only been there 2 years so minimal monies paid and he was struggling to find a new job. 

He had over £400k of equity in the flat (he thought more) but no cash to pay his own rent with. 

Their business plan should allow for having the property empty for a while before being sold, or they should sell it as a going concern.  If your landlord didn't want to run the standard risks of having a rental business he should have sold the flat when he left it.

Ironically given his job, got the feeling he wasn't much of a planner, and selling it probably wasn't part of the plan anyway. He lost his old job, was unemployed for 6 months, took a new much lower paid job, was there for 18-24 months when they went bust. 

Was about 3 months after that he told us that he was being forced to sell it as he hadn't secured another job. On the basis he bought it for £294k, moved out a couple years later so probably around £350k then and put it on the market for £650k 11 years later he probably thinks keeping it was a good idea even if it ended up selling way below the asking price.