Hi all, I have recently viewed a property for BTL. It is my third BTL so still learning and can really do with some advice please. The property comes with tenants which have been living there for a long time but have short-hold tenancy in place. Few questions please:
I have asked the estate agent to view the tenancy agreement but they are not willing to.
But I guess that if I progress then my conveyancer would be asking for it?
- The tenants have made considerable modernising to the kitchen and toilet - Is there anything I need to be vary about?
- Also, the rent they are paying is quite low than the market trend. Could that be an issue if I want it increased.
- Is there anything else I need to be vary of?
Thanks a lot in advance.
If youre still inexperienced, I would suggest you walk away from this one. There is an awful lot of due diligence to do on a tenanted property before buying. This website is a start: 10 questions to ask when buying a tenanted property | Vesta Blog
Think it would be a better idea to ask a specialist solicitor rather than an estate agent or conveyancer.
The fact that the agent will not disclose the agreement stinks. If it was a good private AST, they would be more than happy to show. It could be a regulated tenancy or worse. Also the fact that the tenants have undertaken major works and are paying below market level rent strongly suggests they have a secure tenancy agreement that you will never be able to end. If this is the case, the purchase price should be anything between 25-50% below market value, and it could be difficult to sell in the future. At the very least, view and understand the contract before you part with any money.
It’s important to realise that when you purchase a house with a sitting tenant, that you take on their existing tenancy, so like philg says, you need to understand the terms of that tenancy. Failure to apply due diligence could prove to be very costly.