Good questions to ask when buying a tenanted propertyMake Text Bigger
Buying a tenanted property can have many advantages, immediate cashflow being an obvious one. However, you need to be sure that you are not taking on another persons problems so below are some of the questions we recommend you to ask the seller.
1) How many tenant changeovers have there been in the last 5 years? If the answer is three or more try to establish why people don’t stay very long.
2) How long has the existing tenant been in situ?
3) Has the tenant always paid rent on time? Can that be evidenced with statements?
4) Which scheme is the tenants deposit protected in? Answer should be DPS, TDS or MyDeposits – you will need a copy of the deposit protection certificate if you intend to proceed with the purchase. You will also need a copy of the tenancy agreement.
5) What are the current management arrangements? You may wish to obtain a copy of the existing management contract but you are under no obligation whatsoever to stay with the same agent. Compare what they are providing/charging to THIS. If there are any termination fees these are between the contracted parties, i.e. the agent and the existing landlord, not you.
6) What if any insurance claims have you had on the property? By all means seek to obtain a copy of the current insurance documentation and compare the premium/cover HERE – our insurance partners GUARANTEE to beat any like for like quote.
7) Is the property subject to HMO licensing, Selective Licensing or Additional Licensing? If so, what are the fees and is it licensed now?
8) Is the property freehold or leasehold? Note that you will have to pay ground rent and service charges on leasehold properties so remember to ask how much they are, if they are applicable.
ADDITIONAL TIP 1 – To calculate figures such as net cashflow, return on capital invested and mortgage interest break-even points (if you plan to have a mortgage) see our Landlords Calculator which also includes another list of useful questions.
ADDITIONAL TIP 2 – Don’t just proceed with your regular solicitor, there is much more advice required when buying a tenanted property and not all conveyancing solicitors have a good understanding of landlord & tenant law, never mind the experience and knowledge required to fully protect your interests. At Property118 we recommend http://buytoletconveyancing.co.uk/buying-a-tenanted-property/
ADDITIONAL TIP 3 – check out our online buy to let mortgage quotation system. It will help you to identify; the best deals for you, maximum loan, monthly payments and more. LINK HERE
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Good questions to ask when buying a tenanted property – http://t.co/AJ3DZiotwi
— Mark Alexander (@iAmALandlord) March 20, 2015
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