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New but ambitious! - Is tenanted property a good thing!?


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Hi all - 40 year old here really hoping to get my first property this year.  Any advice on the below would be appreciated.

My personal circumstances are that im geting into this to increase income - I have a FS pension that i can get in 15 years time (aged 55) - this should cover my yearly expenses but want to increase that to get a better lifestyle.  I have loads invested in stocks and shares outside of my pension but want to use leverage to really take advantage of my savings.

I have around 60k to invest but would ideally like to be as hands off as i can.  Ideally 4 houses over 10 years would be great if i can get income of £2k coming in.  Is this reasonable?  Yesterday i viewed a property (2 bed, decent area, links and fundementals) which has a tenanted owner.  Owner is moving and wants to sell up for £160K.  The tenant may not be staying and may move back to Poland soon due to brexit but states he like the UK and wants to stay.  He has been in the house fo two years, always paid on time and is very tidy although not working at the moment.  Is this a good idea to go for?  The state of the property is good.  What do people think?

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  • 2 weeks later...

I think buying a property with a sitting tenant can be a good thing - assuming that the tenant is good and you have done your due diligence on this (sounds like you have)...Having a sitting tenant means that you should cash flow from day one...It does mean however that you have to delay any work that you would like to do to add value to the property until the tenant moves on...

I hope this helps x

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On 11/6/2020 at 10:41 AM, hmehta said:

Hi all - 40 year old here really hoping to get my first property this year.  Any advice on the below would be appreciated.

My personal circumstances are that im geting into this to increase income - I have a FS pension that i can get in 15 years time (aged 55) - this should cover my yearly expenses but want to increase that to get a better lifestyle.  I have loads invested in stocks and shares outside of my pension but want to use leverage to really take advantage of my savings.

I have around 60k to invest but would ideally like to be as hands off as i can.  Ideally 4 houses over 10 years would be great if i can get income of £2k coming in.  Is this reasonable?  Yesterday i viewed a property (2 bed, decent area, links and fundementals) which has a tenanted owner.  Owner is moving and wants to sell up for £160K.  The tenant may not be staying and may move back to Poland soon due to brexit but states he like the UK and wants to stay.  He has been in the house fo two years, always paid on time and is very tidy although not working at the moment.  Is this a good idea to go for?  The state of the property is good.  What do people think?

Happy to have a chat with you around the Huddersfield area. 4 houses will easy achieve you the 2k income per month. DM me if you'd like to have a chat. 

 

Cheers,

Adam.

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Hi I’ve just bought my first property with tenants in situ..June this year...it is a risk factor,, (risk of they aren’t actually keeping up rent and it’s in arrears), but tenants in situ can also be a great factor I think, (they’re paying religiously), instant rental return,  but how do you really find that out before buying ???... .I do have 2 other properties, but I lived in them over years, scaled up, moved myself to better properties,  rented them out and so I know those properties well.  My letting agent chose and referenced both older properties to let out and no problems so far. 

 Back to TIS.... Early June 2020 was My first time buying with tenants in situ, it’s not that straightforward, as sellers can lie about whether the rent is up to date etc... I’d say it’s a bit of a risk, especially if it the property seems cheap... its what you can either call a “complication” especially if you can’t get proof of rent being up to date, I was literally told it was up to date through the sellers enquiry form... or a “asset”, tenants ok paying etc .,  I’m fresh to this and luckily my tenant is paying from purchase and is still ongoing to this month... but I now realise my tenant in situ is paying well below market rent, as the dwelling needs loads of work (previous landlord neglected property somewhat), so I’m now in process of improving the property around the tenant and then hoping to increase rent accordingly as I slowly improve the property whilst she’s still there paying rent,.. I’m going to go in small increments so it’s not a total shock and I deffo can’t deal with bothering with any eviction right now ! Hope that helps !

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If possible, I would buy with vacant  possession. It is hard to see the condition of the fabric of the building with a tenant in situ and even harder to do something about it. If the current tenant is in 2 minds about staying I would encourage him to go. That way there are no unexpected problems with a tenant just around the corner.


Good luck:) 

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I've bought a number of tenanted properties. If the tenants have paid on time and the property is in a good condition, then that's always a positive.

It also makes it easier to get a mortgage. It won't matter what a surveyor thinks that market rate is. They will simply look at the rent that the tenant is paying.

On your broader strategy, I think it looks like a very good idea. 

vin@evolutionblogger.com, evolutionblogger.com/

 

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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