To Buy or Not to Buy

[andy8771]

Hi to you all,

I am here asking for advice, I have been offered a property which belongs to a Govt Dept,it currently has a couple living in it who are ex employees of this Govt Dept.They do not at present have a agreement but at the time of any sale a newly signed secure Tennancy agreement will be put in place.

I know that with this agreement I have no rights to get them to vacate the property even if I wanted to.I am looking at this as a long term investment,the rent will be lower than on the open market but not much.But with this I will have a tennant who has looked after the place as a home as opposed to some tenants.This couple have lived in the property for years so I can see the logic by the Govt protecting them with this newly signed agreement.

The property is being offered to me at an attractive price I am getting conflicting advice so thought I would throw it open to a wider more informed audience

Any views or advice would be grately received so that I can cover any pitfalls etc

Thanks to you all in advance

[Melboy]

Well, Andy I can give you two personal examples of what you can expect from a long term tenancy......my brother in law has rented for 40 years and mother in law some 38 years in the same houses, private landlord but government backed and protected. The chances of obtaining an eviction are virtually zero bearing in mind as long as their rent is paid on time etc.

Are you prepared to wait for these prolonged lengths of time? Would you ever want the property back to sell to raise cash?

This is the main reason why the property is cheap to buy in the first place.....very long term sitting and protected tenants.

Mel.

[Mortitia]

You seem to be contradicting yourself here Andy. On the one hand you are saying the property is being offered at an attractive price and on the other that it is not much below market value. Which is it? Why is the property being offered to you and not to the open market via auction as these things usually are?

I agree with Mel that you could be waiting a long time. I have an uncle who has lived without an agreement in a flat for just under 40 years and seen off 3 large company landlords who have sold rather than stick it out. He is 78 and going strong - his mother lived til 99. This is what you could be facing.

What is there to stop the tenants suddenly coming to you to do repairs/replace central heating, roof, windows etc? AND in the agreement are they allowed to leave their tenancy rights to a son/daughter who may be living with them - check that one out.

Also I don't see how the tenants can be made to sign any agreement since they are livng there protected and why should they sign such an agreement ?- I can't see any legal advantage to them doing that. Either way you can't up the rent more than 3% every 2 years and then only after having been to a fair rents tribunal.

I personally would not touch it.

Let us know what you decide.

Mortitia

[andy8771]

Hi,

Thanks for the replies, I will reply to Mortitia first. The price of the House is well below Market value............the rent is just below Market value. If I go for this it is something that would be a long term investment even leaving it to my Kids.

If I needed to get cash from it I would have to sell it with the Tenants thus receiving a low price but that is exactly what I would be paying...a low price.

The Tenants are NOT being forced to sign the agreement,there is no agreement in place at present, that is why the a agreement has now been written up by this Govt Dept.

As for the repairs the agreement states the Tenants have to do the upkeep on decoration interior wise but the landlord would be responsible for the exterior maintenance along with windows/heating etc.but surely any Landlord would have these maintenace issues, should the heating pack up, windows fall into disrepair etc .

The cost of the property is in the region of £140000 and the rent tops out at £1190 pcm. The agreement states the rent cannot be put up for 2 years and even then at the RPI in December of that year.

My feelings are with this rental yield along with Tenants who look after the place as they have up to now (20 years plus) and such a low outlay not too much can go wrong BUT......so I feel I can never get enough advice / warnings with any investment

especially something like this which as was correctly pointed out a very long term investmentI hope this answers the questions in the replies and again I welcome any other comments or words of wisdom

[Selkirk]

Hi Andy

LEAVE IT WELL ALONE IT STINKS OF TROUBLE AND PROBLEMS!

Apoligies for 'shouting' but just my opinion

cheers

[andy8771]

Just an update on this, we have decided to give it a miss due to the legal pack identifying a problem with the Septic tank which will mean putting in place a packaged Sewage Treatment works!! Now this does seem like CHING CHING a money drain pardon the pun

Thanks to all the advice on this

Andy

[aimscotland]

Just an update on this, we have decided to give it a miss due to the legal pack identifying a problem with the Septic tank which will mean putting in place a packaged Sewage Treatment works!! Now this does seem like CHING CHING a money drain pardon the pun

Thanks to all the advice on this

Andy