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Hi,

I'm viewing a prospective buy to let next week which needs some refurbishment. My question is, how long do I have to do the refurbishment before I need to get a tenant to satisfy the mortgage lender? Is there a set time before the property has to be advertised as for rent?

Thanks,

Lynn

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21 hours ago, lynn said:

Hi,

I'm viewing a prospective buy to let next week which needs some refurbishment. My question is, how long do I have to do the refurbishment before I need to get a tenant to satisfy the mortgage lender? Is there a set time before the property has to be advertised as for rent?

Thanks,

Lynn

Hi Lynn,

You would only have to satifsy tenancy requirements and provide a tenancy agreement IF you was remortgaging across to a different lender.

As you are buying the property, there are no such limits as to how quickly you should get a tenant in. The renovation could take a week, or it could take 3 months. As long as you are able to repay the monthly mortgage, it shouldn't be an issue.

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Not strictly true Onkar, lenders generally expect tenants in straight away.

You need to find a lender with a reasonable tolerance for renovation and the details do matter. If the surveyor feels the property is not lettable in its present state then they will give it a £0 rental, which equals a £0 loan.

For anyone to consider it, it must have a functioning kitchen, bathroom, electrics and central heating, and of course be wind and water tight. From there, some lenders will be fine with a property needing a full refurb as long as its a 1-2 month job. If its simply a matter of painting and decorating then i'd cast the net a little wider.

Get lots of internal photo's so the broker can have a look and make a judgement, but also so that when you go to remortgage after 6-24 months you can show the surveyor the value you have added as without evidence you might struggle to justifty the increase in value.

 

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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1 hour ago, Stuart Phillips said:

Not strictly true Onkar, lenders generally expect tenants in straight away.

You need to find a lender with a reasonable tolerance for renovation and the details do matter. If the surveyor feels the property is not lettable in its present state then they will give it a £0 rental, which equals a £0 loan.

For anyone to consider it, it must have a functioning kitchen, bathroom, electrics and central heating, and of course be wind and water tight. From there, some lenders will be fine with a property needing a full refurb as long as its a 1-2 month job. If its simply a matter of painting and decorating then i'd cast the net a little wider.

Get lots of internal photo's so the broker can have a look and make a judgement, but also so that when you go to remortgage after 6-24 months you can show the surveyor the value you have added as without evidence you might struggle to justifty the increase in value.

 

Ah I see, that's good to know!!

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That's great, thank you. As it turned out, neither of the properties were what I was looking for, but I'm looking at a few more, some of which already have tenants in which I'm guessing is a bonus.

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hi Lynn,

 

I've just joined the Property Hub and you are my very first message! :)

the main thing to consider (in my opinion) when buying a property that needs work, is the cost of the mortgage / council tax / gas / electric which obviously the tenant would be paying, so covering these costs until a tenant lands!  The other 'people' who will be keen for the property not to be empty for a ;long time is the council!  If the renovation takes some time, you will no doubt get a letter through the door from the council wanting an update on when the property will be tenanted.  The council do have some rights against empty properties as they are concerned that it could bring crime to the area!

 

cheers

G

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On 5/26/2020 at 8:25 PM, gaz_s said:

hi Lynn,

 

I've just joined the Property Hub and you are my very first message! :)

the main thing to consider (in my opinion) when buying a property that needs work, is the cost of the mortgage / council tax / gas / electric which obviously the tenant would be paying, so covering these costs until a tenant lands!  The other 'people' who will be keen for the property not to be empty for a ;long time is the council!  If the renovation takes some time, you will no doubt get a letter through the door from the council wanting an update on when the property will be tenanted.  The council do have some rights against empty properties as they are concerned that it could bring crime to the area!

 

cheers

G

Good points. Ive let tenants off a months rent when they lost jobs because its cheaper than picking up the bill for a new tenant along with the council tax etc you mention. Those tenants have also been gold ever since.

Would be interesting to know what grants and support councils offer to landlords looking to bring empty property back into circulation. Something you know about?

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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18 minutes ago, Stuart Phillips said:

Good points. Ive let tenants off a months rent when they lost jobs because its cheaper than picking up the bill for a new tenant along with the council tax etc you mention. Those tenants have also been gold ever since.

Would be interesting to know what grants and support councils offer to landlords looking to bring empty property back into circulation. Something you know about?

I've never thought of this - but this one comment has completely changed my outlook on this. 

 

Greatly appreciated!

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Thanks very much for your replies, very helpful. I'm seeing some properties tomorrow and I'm very undecided. My original plan was to buy a BTL that needed some work so I could hopefully add a bit of value. However, as it's my 1st property maybe I should be a bit more cautious and go for a property which has tenants who want to stay. Can I ask for any thoughts on these please:

1. 1970's house which needs some updating (new kitchen cupboard doors, painting, carpets), in an ok area, currently empty, would rent for £700.

2. Ex-local authority terrace in an ok area, currently rented for £750

3. Newer house (2002) in an excellent area, currently rented for £650, tenants desperate to stay.

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  • 2 weeks later...
On 5/28/2020 at 9:38 AM, Stuart Phillips said:

Good points. Ive let tenants off a months rent when they lost jobs because its cheaper than picking up the bill for a new tenant along with the council tax etc you mention. Those tenants have also been gold ever since.

Would be interesting to know what grants and support councils offer to landlords looking to bring empty property back into circulation. Something you know about?

Yes this is something people do not think about.  I speak about this with clients quite frequently.  If you sit down and actually write down the cost of changing tenants (voids, advertising, utilities, council tax, property cleaning, minor property repairs etc etc) vs the cost of maybe 1-2 months rent you can really see how beneficial it is to work with tenants who have come on hard times.  Over the last few years we have had a few tenant issues where maybe one of them has lost a job etc and we have deferred payment for 1 or 2 months until they are back on their feet.  We then set up a payment plan for say £50 per month where they start to pay back what they owe.  If they move out then they still owe the money, but most tenants will continue to stay.

I would never "let them off" (as in they never have to pay) but I am assuming that you mean similar to what I have mentioned above.

Its also nice to be nice!  Some people just have some shit luck and need someone to help them.  I am fortunate that with my own properties I could have a tenant who didn't pay for a year and I would not notice it financially.  This wasn't always the case and once upon a time I was broke and had very little money, and I know how hard life can be.  If someone tries taking the piss though that is a different story and I will go out of my way to evict them and get every single penny out of them....  Its all about balance.

Darren

 

701670177_HighQualityPNGfileSMALLER.png.5f70ca4cb0d136ae226eb81e0e3e2155.png

      BTS -- BTL -- Lettings -- Sourcing

          www.fmp-investments.com   

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Nope, i just let them off. Whats the point in trying to pile extra costs onto someone trying to get back on their feet. I want a financially healthy tenant, not one constantly on the back foot. I remember what that feels like myself.

If i kick them out it costs me double the missed rent, so its just a cost of doing business. I have other businesses that are thrving because i dont try and nickel and dime everyone and instead of spending a fortune on getting new clients i retain the ones i have. Penny wise, pound foolish.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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1 hour ago, Stuart Phillips said:

Nope, i just let them off. Whats the point in trying to pile extra costs onto someone trying to get back on their feet. I want a financially healthy tenant, not one constantly on the back foot. I remember what that feels like myself.

If i kick them out it costs me double the missed rent, so its just a cost of doing business. I have other businesses that are thrving because i dont try and nickel and dime everyone and instead of spending a fortune on getting new clients i retain the ones i have. Penny wise, pound foolish.

Personally disagree.  As mentioned in my actual statement we do not kick the tenants out, but we do not let them off either.  People fully appreciate someone helping them, and would be more than happy for rent to be deferred for a month or two and then pay back what is owed in instalment of say £50PCM.  From a business perspective wiping out money owed by people does not make sense, but everyone runs their own business their own way.

Being paid what you are owed by someone in monthly affordable instalments is not nickel and dime or penny wise, pound foolish.  2 months rent is £1000 income and £300 mortgage costs, so not only are you losing the income but it physically costs you as well.  Really letting people off with money they owe you is probably more along those lines of the nickel quotation used?

Anyway, each to their own as mentioned.

Darren

 

701670177_HighQualityPNGfileSMALLER.png.5f70ca4cb0d136ae226eb81e0e3e2155.png

      BTS -- BTL -- Lettings -- Sourcing

          www.fmp-investments.com   

             image.png.9da6b48b22099e71e6b38c5c9da690c3.png  image.png.316a3d05478f9de07be32739d4fe4c03.png  image.png.d47c317e14dca0e4c4944a92e2a8e35b.png

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