There has been an increase in demand from Buy to Let property investors for tenanted properties. Tenants are increasingly renting for the longer term and regarding properties as their home rather than a stop gap or short-term arrangement. Buying a property with a tenant in situ or sitting tenant has a number of benefits to investors.
There has been an increase in all areas across the UK with some areas showing as much as a 55% rise in demand.
If you are purchasing a property with sitting tenants, it will be different to the usual sales process so you will need to employ the services of a conveyancer with commercial experience. You’ll need to carry out additional enquiries in all conveyancing transactions, especially with regards to the tenants. The seller will need to disclose all information about the tenants, including the Tenancy Agreement, to establish when the tenancy was created, the status of the tenants and how they may be regulated by legislation.
You will also need to ensure that the property meets safety regulations and all the necessary certificates are in place, such as energy performance, gas and electrical. You will also need to inform the sitting tenants by law, and provide them with your details.
When buying a property with a sitting tenant, there’s no void period or advertising costs to find a new tenant. You’ll have a trustworthy tenant with a proven payment history as soon as the property is yours. This means you’re guaranteed rental income from day one so you can budget with confidence and rely on rental income. They will already have a contract in place, so their tenancy won’t be affected by new ownership.
On the flipside, when you buy a property with a sitting tenant they are entitled to continue to live in the property and this doesn’t affect their tenancy agreement or their rights. This means you can’t evict them or increase their rent until their fixed term tenancy ends.
Talk to us to find out more about taking on a Buy to Let property with tenants in situ.