Penny DJ

Registered with Property118.com
Sunday 23rd February 2020


Latest Comments

Total Number of Property118 Comments: 19

Penny DJ

1:01 AM, 4th October 2020
About 5 months ago

Do Housing Associations take a cut somewhere?

Reply to the comment left by WP at 12/08/2020 - 17:03
Sue Sims does social housing in Birmingham and is usually looking for property. Her company has Genie in the title. You will find her on Facebook either via her page or Partners in Property group.... Read More

Penny DJ

13:59 PM, 5th September 2020
About 6 months ago

Can one buy a property for a friend and charge him rent?

Reply to the comment left by Mike at 05/09/2020 - 03:30
You’re certainly not going to loose - you have the full rent value(no maintenance costs) plus up to 32% uplift on your investment if you wish to add it to the purchase price. I have 3 lined up for this, and they can choose what house/area they want as it will be their house after all.... Read More

Penny DJ

19:47 PM, 4th September 2020
About 6 months ago

Can one buy a property for a friend and charge him rent?

Yes, this is called Rent to buy. Your friend would be the tenant buyer. You buy the property under your name and he rents it from you over a pre-dertermined period of between 1-10 years. You use a modified AST tenancy contract and a lease option contract to purchase the property. The modified AST says that he will pay all maintenance and other issues. You will just pay buildings insurance and make sure the gas/EICR certs are done. The purchase option usually adds 4% inflation to the property cost, but it is fine to have no uplift. In the case of a 7 year lease option with compound interest that equates to 32% of the purchase price so £132,000, but it is equally legal to do 0% which is what savy buyers usually do with a £1 lease cost added. So that’s the purchase and rent, and the lease covers his purchase from you in X years. He will pay a rent top up which is 10% of the future price of either £100k/£132k, and that is kept in a separate client account so neither of you can spend it. He also has the option to buy before the X years at the SAME price, so if he inherited money etc. 7 years is incidentally the magic figure for writing poor credit history and creates good credit by paying regular rent. At the end of the agreed X years, he has 3 options - buy in full as agreed, don’t buy so walk away and loose the top up already paid, renegotiate for example if X years was now and he was furloughed and unable to pay rent for the last 4 months, the obvious option would be to delay for 6 months or a year to allow him to pay the rent arrears and top up. You would have already taken the arrears from the top up, so that needs to be paid back by him and when your straight it’s back to the buy option. Walk away is unlikely as they have 10% invested, and you’re looking at 0% uplift, so unless housing halved in value, he wouldn’t make a loss. For the tenant buyer, their mentality is that it’s their house from day 1, but effectively on a 32 year mortgage. They can do what they like with the property in terms of decoration, add conservatory, make repairs at their own cost. You don’t get the usual landlord headaches of damage and non-payment as NP invalidates the option and you keep the top up, or use the top up to repair damage and tenant needs to have paid it back or again the purchase option is not complied with.
I have done the training on this one, and have the contracts for the AST and purchase options if you would like me to help at all.... Read More

Penny DJ

12:13 PM, 3rd July 2020
About 8 months ago

2nd BTL 2 bed Vs 3 bed?

The service charge for the 2 bed will include a fee for the lift maintenance, which can considerably increase the cost going on.... Read More

Penny DJ

18:08 PM, 19th June 2020
About 9 months ago

Increase rent - Increase Bond?

My last tenant had a 12 month bond (supposed to save to replace it in 12 months). She left at 11 months with lots of damage and I called the bond in.
I would be tempted to leave the arrangement as is currently, but start your tenant thinking about adding a rent top up to exchange bond for deposit ready for when the bond runs out.... Read More