Mortgage folk and landlords, some help please...

[Mr Jack]

So ideally what i'm after is a way of selling it where by it's only available to other prospective landlords, this way i keep my tenant and he keeps his home.

There's no reason you can't do this. Just sell it as a going concern with the tenant in place. If they have a tenancy agreement which covers the time when it's sold they can't be booted without eviction proceedings anyway.

It'll make it harder to sell, of course, but - on the other hand - there's plenty of potential landlords who'll be happy to buy a property with a reliable sitting tenant.

Is it furnished? What are you planning to do with the furniture?

Also, tell your tenant, you'll need to have them on board to arrange viewings anyway. When I was renting, the house we were renting was sold, and we made an effort to make it look nice so that we could get a new landlord who wanted to continue renting to us.

 

[mrbios]

Cheers, the only furniture in it that belongs to me is the sofa, mainly because it took about 3 hours to get in and we didn't think we'd get it out again without removing the window.

Beyond that though it's unfurnished, i had an answer on the landlord forums as well that it can be marketed to buy to let buyers only which is good. Thanks Mr Jack

 

[Bes]

I simply don't want to lose £100s over having an empty flat for the duration of sale. Perfectly reasonable.

Well that's one of the pitfalls of BTL I am afraid. The tenant will find out you're selling anyway, as the agents will come around to do photographing, viewings, valuations, etc.... so why not just tell him ASAP?

What do i lose? £100s, unlike the pompus conservative party of the overclockers GD i don't have £1000s in savings, i don't have the spare cash to freely pay for a mortgage and rent at the same time for an extended period of time (for a while yes, but no more than the maximum time it usually takes to find a tenant when one leaves, then i slip in to debt)

Perhaps becoming BTL investor was not such a smart move for yourself then. I don't think it's fair to inflict your financial problems on your tenant though.

OP this is not aimed specifically at you but I have to vent: I wish the government would properly regulate this sector to prevent 'amateur' (and I mean that in the nicest possible way) landlords from selling up on whim and pulling out the rug from beneath private tenant's feet like this. It seems like wanna- be property magnates who are under capitalised and don't really know what they are doing are playing havoc with people's lives.

 

[mrbios]

Perhaps becoming BTL investor was not such a smart move for yourself then. I don't think it's fair to inflict your financial problems on your tenant though.

OP this is not aimed specifically at you but I have to vent: I wish the government would properly regulate this sector to prevent 'amateur' (and I mean that in the nicest possible way) landlords from selling up on whim and pulling out the rug from beneath private tenant's feet like this. It seems like wanna- be property magnates who are under capitalised and don't really know what they are doing are playing havoc with people's lives.

It wasn't a smart move to have bought the place in the first place, i was young and excited about getting my first place so i fell into the trap of bad mortgages with no experience or proper guidance.

I never wanted to be a landlord, but 2.5 years ago it was my only option, i had ages left on my fixed rate and the place wasn't big enough for our needs, the only option was to let it out. Up until now I've managed the place perfectly well and got on with all the tenants i've had but situations change.

 

[Bes]

It wasn't a smart move to have bought the place in the first place, i was young and excited about getting my first place so i fell into the trap of bad mortgages with no experience or proper guidance.

I never wanted to be a landlord, but 2.5 years ago it was my only option, i had ages left on my fixed rate and the place wasn't big enough for our needs, the only option was to let it out. Up until now I've managed the place perfectly well and got on with all the tenants i've had but situations change.

Fair enough. Like I said, wasn't specifically directed at you. Sounds like you are being more responsible than some LL's I have come across

As I said, your tenant will likely find out long before you sell the flat (esp as the market is very slow now), so I would tell them ASAP and then deal with whatever happens as a result. He will act more favourably than if he finds out when a surveyor comes banging on the door or whatever though. You might be able to shift it on to another BTL investor without too many issues though.

 

[edscdk]

Also early repayment charges, i need to look through my paperwork but do they go down as the fixed rate gets later in to its life? or are they always a fixed penalty? I have 1 year 6 months remaining on my fixed rate mortgage but the financial side of things is stressing me out and i just want rid of it no matter what the short term cost may be!
.

if tis fixed rate there is most likley a penalty and a BIG one....
mine was 10% of the principal in Y1 then 8% y2 and 5% in Y3 or something like that.

 

[franco_22]

Business is business at the end of the day. Don't know why you are all getting so worked up with the OP.

 

[mrbios]

if tis fixed rate there is most likley a penalty and a BIG one....
mine was 10% of the principal in Y1 then 8% y2 and 5% in Y3 or something like that.

I remember having a letter about my mortgage and payment information etc about 2 years ago and it had a figure around £3,600, hopefully this has gone down now, it may be worth me waiting 6 months so that i can sell it in the final year rather than selling it now in its second year.

10% is one hell of a repayment charge though!

 

[#Chri5#]

Is it 2.5 years since you started renting it?

If so, and IIRC, you have 36 months from moving out (ie it's no longer your primary residence) where you don't pay Capital Gains Tax. Don't ask me about allowances and the exact in's & out's but worth checking in to properly.

 

[SKILL]

Actually the lettings agent i deal with the landlord pays the admin fees out of the first months rent payment.

and most of the lettings agents around here it's a months deposit + first months rent, he'll get his deposit back from us, what does he have to save up bar maybe up to £100-200 depending on the cost of his new place? (if he has to pay his deposit prior to receiving the one back from us simply whack it on an overdraft until the other deposit comes back less than a month later to pay that off, it's not rocket science)

Admin fee's aren't always charged, but I've been looking on and off around the Bristol/Bath area and the general setup is:

£100-250 'referencing' rip-off,
Some (and this is the minority) put a further £50-150 on top of that as 'admin' fees
Then at least 1 months rent as deposit, more often it's 1.5-2 months.
And obviously the first months rent,

But he will lose the referencing fee's (and I haven't seen a single letting agency that doesn't rip people off with these), and potentially a further admin fee so could be anything from £100-400 down the drain,

And yes, he'll get the deposit back from your place but not till a week or two after he moves out (think they've got 28 days maximum), and he's likely going to end up having a week or so overlap to move/clean which will cost more as well.

So you are costing him money, now in principal this is fine, he's likely to have to move sooner or later and that's one of the risks of renting, but to specifically avoid telling him so that he ends up with a short period to find a reasonable sum of money just to serve your own needs is quite selfish. Better in my opinion, once you've decided you're definitely going to sell, to let him now informally but that no notice is served until you get a buyer, this way he gets some notice to start ensuring he has the money to move available to him.

This works both ways, a year or so ago my housemate and I were considering moving, we informed the landlady (non-managed, so direct contact) that we were thinking about it and she then knew that potentially she'd need to get things sorted with a letting agent again, in the end we didn't move but I'd much rather this than leaving her in the dark even though I'd be perfectly entitled to do so.

 

[batsy]

You could try here if you haven't already.

http://www.landlordzone.co.uk/forums/forum.php

 

[BDEE]

if tis fixed rate there is most likley a penalty and a BIG one....
mine was 10% of the principal in Y1 then 8% y2 and 5% in Y3 or something like that.

Those are not normal ERCs. Sounds like you had a sub-prime mortgage.