Buying rental home

D3V!L

We've been renting our home for about 7 or 8 years and we're quite settled in it. Over the next couple of months we'll be in the position to buy and the thoughts of buying the house we're in has cropped up a couple of times. Better the devil you know etc.

We're quite settled in it and know all its little foibles etc at this stage and what would be involved to do it up to a decent standard. Something it needs at this stage.

Does anyone have any experience approaching a landlord to buy a property ? He made noises about it a couple of years back, so I know selling is on his books at some stage.

Where do I start ? I dont want to end up on my ear in case we can't come to an agreement on price and he sells to someone else.

The_Conductor

The fact that the landlord has broached the possibility of selling it in the past- does not mean it is still in his/her mind- however, one way or the other- you are going to have to talk to them.

I can't see any reason whatsoever how/why you indicating you're interested in purchasing the property from the landlord would have any impact whatsoever on them giving you your notice to terminate the tenancy- its completely and utterly unrelated.

With respect of a price for the property- national house prices rose by 12% per annum in the month to June- and the trend has been slowing- but is still at a racehorse pace. It is not as simple as you sitting down with the landlord and agreeing a price- normal practice would be for the property to be sold at open market prices and you to match the open market price. You may get a small discount on the open market price from the landlord- in recognition of it being an easy sale- however, it is a rising market- and there is a significant shortage of property- he/she could decide to go with a full open market sale if you try to bargain with them.........

Don't assume that they want to sell the property- a lot of landlords are stampeding to the door, certainly (given the regulatory regime)- but there are tens of thousands who are good landlords, aware of the rights and obligations of landlords and tenants- and quite happy to be in the sector for the long haul. He/she might have been thinking of selling a few years back- and they may have changed their mind- one way or the other- you're going to have to talk to them to get a picture of what their thoughts are- and to advise them of your interest in purchasing the property- if they are interested in selling............

Gumbo

There's no hard and fast rule tbh, maybe just call him and ask him would he consider it?

murphaph

I had tenants ask me about buying. I said no thanks and they remained tenants for another couple of years before buying elsewhere. It's fine to ask.

D3V!L

Thanks lads, I'll put it to him and see what happens.

Other factors can apply as well, so that even if he would like to sell, he won't.

For example if he has owned the house for ages, selling it would crystallise a very large CGT bill. So while he might have, on paper, X euros tied up in the house, if he sells it he might only have 3/4X to invest elsewhere.

And if hes elderly and thinking of his will, he would see a large chunk going in CGT and a double whammy on top of that from inheritance tax depending on who he leaves it to. He would be better to leave the house in his will rather than selling it and being in cash when he dies.

D3V!L

[Deleted User] wrote: »

Other factors can apply as well, so that even if he would like to sell, he won't.

For example if he has owned the house for ages, selling it would crystallise a very large CGT bill. So while he might have, on paper, X euros tied up in the house, if he sells it he might only have 3/4X to invest elsewhere.

And if hes elderly and thinking of his will, he would see a large chunk going in CGT and a double whammy on top of that from inheritance tax depending on who he leaves it to. He would be better to leave the house in his will rather than selling it and being in cash when he dies.

All good points. I have to speak to my wife, she knows his age. I think he's getting on a bit now.

Mooooo

May be no harm to have your ducks in a row, mortgage approval etc

earlytobed

A somebody who sold a rental property this year, it would have been great to sell to the tenants, no dealing with estate agents, no cleaning, painting etc.

No harm in asking, if the landlord was even half considering, the above advantages may sway their decision

the_syco

Have the house surveyed. Easy as you live in it. Doing so will let you see if there's something that has perhaps prevented a sale in the past.

Get mortgage approval for the amount that similar houses are being sold for nearby. Then approach him.

TeaBagMania

Deleted User wrote: »

Other factors can apply as well, so that even if he would like to sell, he won't.

For example if he has owned the house for ages, selling it would crystallise a very large CGT bill. So while he might have, on paper, X euros tied up in the house, if he sells it he might only have 3/4X to invest elsewhere.

And if hes elderly and thinking of his will, he would see a large chunk going in CGT and a double whammy on top of that from inheritance tax depending on who he leaves it to. He would be better to leave the house in his will rather than selling it and being in cash when he dies.

a lease to own option might fix those issues with the LL

The_Conductor

TeaBagMania wrote: »

a lease to own option might fix those issues with the LL

Lease to own? Rent-to-buy? Aside from anything else- it doesn't count for mortgage purposes- and thats ignoring the tax implications for the seller (as they'd possibly end up paying up to 54% tax on the rental/lease income- including USC on the gross............ I don't see how/why any landlord would entertain someone who came to them suggesting a lease-to-own scheme- unless you agreed to pay them a massive premium in recognition of the vastly elevated risk they'd be in- to say nothing of the horrendous tax implications.