Putting an offer on rented house

Karenbarrow

Hi.
I've been renting a house with my boyfriend for the last six months. We moved to the area as we are interested in buying around here at some stage so we wanted to check the area out.
The thing is we have fallen in love with our rented house! We both agreed that if it was for sale we would try our best to buy it.
It's a small 2 bed old cottage with a lot of work needed. Looking at other similar properties I roughly estimate that it is worth around 120,000.
Has anyone heard of anyone offering their landlord to buy the house?
If so what would be the best way to go about it? We would be afraid that we would offer too much and also obviously the landlord might not have any intention of selling so would it give him the idea to increase the rent next term?! The current monthly rent is 600.

Any ideas and tips welcome
Thanks

Gumbo

First port of call is to the land lord and ask them if they have ever considered selling it and see what their reaction is.

The_Conductor

Given the rental yieldand the price you're putting on the property- exactly 6%- a landlord would be hardpressed to get a similar yield in the current market elsewhere. Your landlord most probably will want a bit more than this to make it worth his while.

I.e. if you hand him 120k tomorrow- can he get 6% yield on it if he invests it elsewhere. The answer is, most probably not.

Unless its actually worth his while to sell, which it isn't at the valuation you've put on it- he probably won't.

Pawwed Rig

It is worth asking though. I would be pretty sure about the valuation and how high you are willing to go before mentioning it. Also get a survey done.

Graham

Approach the landlord and ask if he would be interested in selling. I wouldn't mention a price or start thinking about surveys at this stage.

From what you've said there's no way of knowing if your landlord is a property investor in which case the yields mentioned above would be important, or if he's an accidental landlord who might welcome a relatively easy sale.

john.han

The_Conductor wrote: »

Given the rental yieldand the price you're putting on the property- exactly 6%- a landlord would be hardpressed to get a similar yield in the current market elsewhere. Your landlord most probably will want a bit more than this to make it worth his while.

I.e. if you hand him 120k tomorrow- can he get 6% yield on it if he invests it elsewhere. The answer is, most probably not.

Unless its actually worth his while to sell, which it isn't at the valuation you've put on it- he probably won't.

I don't think you're right about this, in Galway city for example you'd easily find a 2 bed apartment for 120k or less and the rental value would be 750 -800 a month. In some areas yields at current prices are ridiculous

The_Conductor

john.han wrote: »

I don't think you're right about this, in Galway city for example you'd easily find a 2 bed apartment for 120k or less and the rental value would be 750 -800 a month. In some areas yields at current prices are ridiculous

Central Bank and CSO commentaries disagree with you.
Investors- as a percentage of purchasers- have fallen off a cliff- as yields do not support current prices. You will have exceptions to this- but by and large- current prices do not interest investors- who generally seek a minimum 6-8% ROI (and preferably higher).

Also- I don't know if you've attended any auctions in Galway lately (I have). 120k for a 2 bed apartment in the city- is a lucky find- 140-150 is more normal- and a real luxury one changed hands recently for over 220. Looking on Propertypriceregister- some 3 beds apartments in Galway City have recently sold for 265-275 (check out www.propertypriceregister.ie yourself- you'll be very surprised........)

ulgberrrr

What area are you referring to?