Nikephorus
Registered User
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Hi All, not sure if this situation has been discussed on AAM before, but I'd value people's opinions on the following...
I have received an interesting offer for a Belfast investment property I own. For ease of calculation I have rounded numbers off.
Belfast Residential Investment Property
Monthly costs (mortgage, insurance, rates, other costs) = £800
Current market rent for this type of house = £1000.
My house needs some refurbishment and so attracts approximately £900 per month. Once void periods are factored in, the rent averages out somewhere in the region of £800 per month.
A property company has offered to rent the house from me for 5 years for £700 per momth. They plan to sublet individual rooms and to make a profit in the difference between the rent paid to me and the amount received from each individual tenant. They would be responsible for finding said tenants and for collecting rent. I would be paid regardless of whether the company is getting rent each month.
This arrangement would save me considerable energy (both physical and emotional). It would also provide a stable income, allowing me to accurately predict how much I need to subsidise the investment property by each month.
Another plus for me would be that the sub-tenants' rent payments would include heating, meaning that the place will be kept warm and damp-free - not always the case with tenants.
It is an offer which I am seriously considering. I just wondered how the offer seems from a neutral perspective. Remember the £700 monthly rent will remain constant for the 5 years, even though market rates are likely to rise during that time.
Should I take up the offer? Do I have leeway for bargaining in your opinion. At the moment, the 5 year contract seems very attractive to me, £700 rate seems low. Should I aim for higher? I will be speaking to the company tomorrow and need to decide how ballsy to be with them....
I have received an interesting offer for a Belfast investment property I own. For ease of calculation I have rounded numbers off.
Belfast Residential Investment Property
Monthly costs (mortgage, insurance, rates, other costs) = £800
Current market rent for this type of house = £1000.
My house needs some refurbishment and so attracts approximately £900 per month. Once void periods are factored in, the rent averages out somewhere in the region of £800 per month.
A property company has offered to rent the house from me for 5 years for £700 per momth. They plan to sublet individual rooms and to make a profit in the difference between the rent paid to me and the amount received from each individual tenant. They would be responsible for finding said tenants and for collecting rent. I would be paid regardless of whether the company is getting rent each month.
This arrangement would save me considerable energy (both physical and emotional). It would also provide a stable income, allowing me to accurately predict how much I need to subsidise the investment property by each month.
Another plus for me would be that the sub-tenants' rent payments would include heating, meaning that the place will be kept warm and damp-free - not always the case with tenants.
It is an offer which I am seriously considering. I just wondered how the offer seems from a neutral perspective. Remember the £700 monthly rent will remain constant for the 5 years, even though market rates are likely to rise during that time.
Should I take up the offer? Do I have leeway for bargaining in your opinion. At the moment, the 5 year contract seems very attractive to me, £700 rate seems low. Should I aim for higher? I will be speaking to the company tomorrow and need to decide how ballsy to be with them....