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Lease extension for renting?
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Waynazz
Posts: 1 Newbie
Hi, I'm looking to get into the property development game after a long time out of work due to illness, I've decided life's to short so plan to do what i've wanted to do for years and start my own property development business. Starting off very slow and small with cheap flats, doing them up and either renting out or selling on for profit.
I'm interested in a property that is up for auction next week, the issue i have, or possibly have is that there are only 72 years left on the lease, I'm aware this can cause problems for some potential buyers so if i decided to do it up and sell quickly for a profit this could cut down the amount of people, in particular first time buyers, who would be able to get a mortgage and buy it from me. If i'm wrong in saying that please correct me.
My real question is...I'll be buying the property cash so no need to extend lease for me to buy it....But if i decided to rent the property out would there be any need for me to extend the lease, would creating a tenancy agreement with someone mean i would have to extend the lease or could i rent it out without lease extension, and extend down the line sometime when i decided to sell?
Any info regarding this greatly accepted. I'm new to this buying/selling/renting game so i'm just trying to gather as much info as possible.
Thank you
Waynazz
I'm interested in a property that is up for auction next week, the issue i have, or possibly have is that there are only 72 years left on the lease, I'm aware this can cause problems for some potential buyers so if i decided to do it up and sell quickly for a profit this could cut down the amount of people, in particular first time buyers, who would be able to get a mortgage and buy it from me. If i'm wrong in saying that please correct me.
My real question is...I'll be buying the property cash so no need to extend lease for me to buy it....But if i decided to rent the property out would there be any need for me to extend the lease, would creating a tenancy agreement with someone mean i would have to extend the lease or could i rent it out without lease extension, and extend down the line sometime when i decided to sell?
Any info regarding this greatly accepted. I'm new to this buying/selling/renting game so i'm just trying to gather as much info as possible.
Thank you
Waynazz
0
Comments
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Firstly you need to check the lease to see whether you are even allowed to rent it out.0
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Usually the less time remaining on the lease, the more they charge to extend it too... So bear that in mind. You may not have budget for it now, but you may most certainly not later if the freehold decides to hold you to ransom for an extension.
Also have you thoroughly thought through the implications of being a landlord? G_M has some awesome guides, suggest searching on here and really figuring out what it will cost you and if you can make it profitable.0 -
A short lease won't stop you renting it out (but the terms of the lease might - you, or your solicitor, should check the lease).
To get a Statutory Lease Extension (which is generally the cheapest and safest approach), you'll need to own the flat for 2 years.
To find out the rough cost of a Statutory Lease Extension, try here (and scroll down): http://www.moneysavingexpert.com/mortgages/extend-your-lease
And allow up to £3k to £4k for fees for the lease extension on top.
If you end up selling before extending the lease, some mortgage lenders won't like a lease that short.
See: https://www.cml.org.uk/lenders-handbook/englandandwales/question-list/1846/
(But since it's being sold at auction, there may be other reasons why the flat isn't mortgageable anyway.)0
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