Cutting off my nose?

by Readers Question

9:56 AM, 27th April 2015
About 4 years ago

Cutting off my nose?

Make Text Bigger
Cutting off my nose?

I have my eye on a prospective rental investment, a modern 2 bed town house which I know will rent quickly for £525. The guy who is selling bought it just last month but due to personal reasons is selling it straight away. He paid £80K and wants his £80K back. Cutting off my nose

Am I being stupid by not paying what he wants when I know I can let it quickly and mortgage/rental income sums stack up quite nicely?

I just feel like I should be trying to pay less for it but other places I’m looking at, though cheaper to buy, won’t give me the same % returns.

Thanks

Rob



Comments

Mark Alexander

10:05 AM, 27th April 2015
About 4 years ago

Hi Rob

Presumably you are in a position to proceed quickly, i.e. no chain, finance in place etc.?

Is the vendor aware of this?

You could try making an implied offer, e.g. if I was to make an offer it would have to be in the region of £75k, would you consider that to be really cheeky? If he says yes then put your case to him again re no chain and fast completion and say, OK so realistically we can't be too far apart so what is the best you can do to provide me with an incentive to do this deal? Then ask, how much is it costing you to hold onto this property every month in the hope of getting your money back.

Is he paying a mortgage, council tax etc.? Is he prepared to wait for several months to get the price he's quoted at the risk of a deal falling through due to a chain breaking or a mortgage being declined or would he rather take the bird in hand and proceed with you?

Only you know how much you want this property. If you feel it's too good a deal to miss then you need to make a commercial decision.

Good luck.
.

Florance Kennedy

13:23 PM, 27th April 2015
About 4 years ago

I'm buying a new house for myself and have just offered the full asking 'fixed' price for the property I want. I could have gone in lower - the house has been on the market for nearly a year - but it got me the deal immediately and I expect to get back in goodwill/ extras what I may have lost in hard cash.

If the property is worth £80k and will give you a return straight away, why make somebody else's life even more miserable? It's already costing him a fortune in legal fees.

Malcolm Norquoy

13:30 PM, 27th April 2015
About 4 years ago

At those figures, assuming limited additional costs beyond legal, you are approaching an 8% gross yield. If it will rent quickly for 525pcm then you may be able to achieve slightly more and achieve 8%.

Do you a proposition elsewhere that is better short to medium term?

P.S. I would double check the property by having a survey and check out the neighbours/neighbourhood at different times of day and days of the week given he is reselling it so quickly

Rob Clark

19:38 PM, 27th April 2015
About 4 years ago

Thanks for the feedback so far folks.
Mark- I did put in a cheeky offer of 75K giving all the info you mentioned- chain free, finance in place etc. He will not budge from his 80K. Perhaps finding out if he is mortgaged and putting in an offer of 78k may tempt him but having met the guy on the viewing- I doubt it. I am dealing with a "trainee letting agent" and wondered whether someone with more experience may be able to convince the vendor to reduce his bottom line.
Could I get access to the results of his very recent searches to save doing my own and save some costs there?

Florance- I'm starting to think that the haggling may not be worth it- we are talking just a few pounds difference on the mortgage each month.

Malcolm- I rent a similar property round the corner for a little more money so you could be right also- I used to live in the area so I'm confident I know what I would be buying.

Am I talking myself into paying the vendor what he wants here!?

Florance Kennedy

22:16 PM, 27th April 2015
About 4 years ago

Aha, pay him the money and get the surveys for free! I rest my case.

Colin Dartnell

7:54 AM, 28th April 2015
About 4 years ago

I would pay up, every month it takes you to agree a price you lose a months rent.

There is a chance he might sell elsewhere while you are thinking what to do and then you've lost a good investment.


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Change to Universal Credit rent arrears payments

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More