House for sale with tenant in it for 25 years

C

Clonback

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I am considering purchasing a property with tenant there for 25 years and paying approximately 25% under current market rental.
In the current climate what are the main issues to consider?
 
1 - are you happy to buy with tenant in situ?
2 - are you happy with return given purchase price (plus ancillary costs) and current rent?
3 - is tenant 'hassle free' to landlord?

If you are happy with both, then what's the problem?

On the other hand, would you rather
1 - buy with no tenant
2 - buy with tenant and increase rent, complying with all legislation re proper notice
3 - redecorate and upgrade
 
What is the purpose of buying the house ? Is it investment or for moving into in the future ? In my limited experience of sitting tenants years ago, they tend to stay there till they die or are incapable of living there. So the age of the tenant is important (and health if you can get a glimpse and make a call on that).
 
You need to check the lease with a solicitor. For example, if the tenant marries, can the spouse remain in the property, if the tenant were to pop his clogs.
 
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not necessarily so, if he/she has loads of money!!!!

If tenant is 75 and you are happy with the return, and the tenant is not a bothersome tenant, then take a chance.
 
if he is still there, he has rights. Your decision is are you happy with the yield? if so, then buy, if not, then don't. It's better, in my opinion to have a happy tenant, than having to try to evict, renovate and re let.
 
Thanks Ravima.My main issue is how to increase the rent as its currently 25% underrented.
 
Surely if the property is in the RPZ then you’re capped at the 4%?
Had friends that bought years ago with sitting tenants in part of the property. Was a bit of a nightmare esp when he went into a home and his nephew (power of attorney) wouldn’t relinquish rights while he was alive. Took a long time. Even with the reduction in purchase price I don’t think it was worth it.
 
You have not mentioned the most important issue. What are you paying for this property.

If its at full market price, then you would be crazy to go near it.

A reduction of 1/4 would not satisfy me, there are a lot of potential pitfalls. At a 1/3 discount to market price I would be tempted.
 
Mrs Vimes said:
Completely off-topic but reminds me of Irene Triplett, bet no-one thought they'd be paying a pension for 165 years!
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It's not off topic. It is a risk. I mentioned it because I have a friend who was in this situation. He bought a house priced below market rate because it had a sitting tenant (who was of advanced years). The tenant passed away soon after they had purchased it, but it was only this point they discovered the tenant was in the process of getting married.
 
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