Rent to Buy houses > find your perfect home

If you're looking for a Rent to Buy house then you'll probably be wondering which houses actually make the best Rent to Buy ​opportunities - and why?

So here's a comprehensive guide for you - based on our years of experience - as to which houses make the best Rent to Buy houses.

And the good news is that there's lots of choice for you. I mean there's literally thousands of houses ​available that can all make perfect Rent to Buy houses.

Rent to Buy itself is a relatively simple concept when you break it down to its 2 core parts - which are:

  1. You rent a house first and then
  2. You buy the same house later with a mortgage (or could be for cash)

Yes there's other things to consider of course. But at a basic level the 2 things listed above are what Rent to Buy Houses are all about.

So let's get into this post right away and tell you all you need to know about finding your perfect property. A property that you can Rent and then Buy (Rent to Buy Houses).

​all you need to know about finding your perfect property. A property that you can Rent and then Buy

And please also take a look at our comprehensive Rent to Buy guide which explains how the entire process works - FREE Rent to Buy training course.

​rent to buy houses > where to find them?

rent to buy houses

Let's start by ​beginning to think about the sort of house you want to live in?

​Consider that when ​you rent a house it's not essential to ​find the "the perfect home" right away. That's because you're ​not going to ​buy and own this property. So if it turns out this isn't the perfect property for you then you can move elsewhere.

However a Rent to Buy home needs a lot more thinking about. Because you'll also be buying this house at a later time. So of course you'll want to tick as many boxes as you possibly can.

You need to be looking at prospective houses with a home-owner mentality.

​Availability ​of Rent to Buy Houses

Your Rent to Buy house can come from one of 2 main sources.

  • Houses currently advertised "For Rent"
  • Houses currently advertised "For Sale"

And your Rent to Buy house can be in any area of the country, for example London, Manchester, Liverpool, Oldham, Blackpool. In fact any area ​of the country where there is housing available.

So let's take a look at each of these 2 categories and talk about the merits of each.

​houses currently advertised for rent

rent to buy houses

Rented houses make amazing Rent to Buy houses. That's because very often landlords who are renting out their houses are actually also considering selling them.

However selling a rental house is a huge hassle for a landlord because they'll be unsure on the best way to go about it.

And they'll be wondering which of the following options might work best for them. There's pitfalls to options 1 - 3 below. And then there's option 4 ​that they might not have heard of before - yet it represents a huge opportunity for you.

Here's those options:

  1. Sell the tenanted property as an investment property?
  2. Wait until the current tenants move on and then sell as an empty property?
  3. Evict the tenants and then sell it as an empty property
  4. Sell as a Rent to Buy property - which many landlords won't have heard ​of. This gives you you a great opportunity to suggest it - ​and it ​could be a perfect fit.

​Sell the tenanted property as an investment property

Selling the tenanted property as an investment property severely restricts the potential buyers that the landlord can sell to. Because people looking for a place to live in themselves won't be interested in buying this property.

And so the pool of potential buyers is restricted to other investors and landlords. And investors are notorious for wanting a bargain and putting in low offers which all = hassle for the landlord.

​investors are notorious for wanting a bargain and putting in low offers

​Wait until the current tenants move on and then sell as an empty house

The problem with waiting until the current tenants move on before selling is that the landlord doesn't know how long the tenants will stay for.

So let's imagine that the landlord wants to retire to the coast or has ill health - both of which are very common reasons to sell.

Simply waiting for the tenants to move out means the landlord's future plans are on hold until the tenants decide to move out.

So from a landlord's point of view this all = hassle.

​Evict tenants and sell as an empty property

The problem with doing this is that any ethical landlord doesn't want to make their ​tenants homeless. And right now the rental money is covering the mortgage payments.

So taking this course of action means the landlord will lose rent for an undetermined period of time until the house sells. And they'll still need to make the mortgage payments.

So despite the landlord having a strong desire to sell - they probably like the certainty of the rental money coming in - which covers the mortgage costs. And there's also the danger that the property might not sell.

Which from the landlord's point of view = hassle.

​Selling as a Rent to buy property

Selling as a Rent to Buy property is a great option for the landlord because it means they can rent out the property with no voids. And then they can sell the property later on - which is what they're actually wanting to do.

So unless they have a burning need to sell the property immediately this can work very well.

Quite often rented properties will have a Buy to Let mortgage on them. Which means that even if the landlord sells the property immediately - they won't get to keep any of the money.

So selling over a number of years (via Rent to Buy) will be an attractive option to landlords. Because it gives them a hassle free rental - until they sell.

So all you need to do now is to look for properties advertised for rent - and suggest Rent to Buy to the owners / landlords.

​all you need to do now is to look for properties advertised for rent

Because a number of them will be actually wanting to sell - and so a hassle free sale via Rent to Buy will be music to their ears.

Here's why rental properties make such good Rent to Buy opportunities 

There's 2 main reasons why rental properties make such good Rent to Buy opportunities. And that's because they already have 2 key ingredients in place that are essential for Rent to Buy.

  1. The rental property will already have the necessary Buy to Let mortgage in place to allow it to be rented out - which Rent to Buy needs.
  2. The owner / landlord of the property will already be very used to renting out their property. And so the Rent to Buy model (renting and then buying) won't be a concept too far removed from what they're already comfortable with. So not much explaining needed for the landlord to understand and get involved.

​Houses currently advertised for sale

rent to buy houses

Houses currently advertised for sale can also make amazing Rent to Buy opportunities. There are however a few things you need to consider so here's a comprehensive breakdown for you:

  1. Does the property have a mortgage on it?
  2. Does the seller need the money from the sale right away?
  3. How long has the house been up for sale?
  4. If mortgaged - does the mortgage already have consent to let?
  5. If needed - can the owner obtain consent to let from the mortgage company?

​Does the property have a mortgage on it?

The question of whether or not the property has a mortgage on it will probably determine the need for the seller to sell quickly or not.

  1. Imagine that SELLER A is selling their house which is worth £100K and it has no mortgage. If they sell for £100K they walk away with £100K in their wallet. Making £100K is quite an incentive to sell right away so Rent to Buy may not work for this seller.
  2. Now imagine that SELLER B is selling the house next door for £100K and it has a mortgage on it for £95K. If they sell then after solicitors fees, estate agent fees etc they'll end up with exactly NOTHING in their wallet. So Rent to Buy might work well for them because they don't have the same incentive to sell quickly and make money.

Does the seller need the money from the sale right away?

This is similar to the scenario above, but with slight differences.

Let's revisit SELLER A above who has no mortgage on a house that's worth £100K. And if they sell they will immediately have £100K in their wallet. So the question then is what are they going to do with the £100K?

Ok imagine they're not planning to blow it on a Tesla or take a round the world cruise on the QE2 - then what exactly will they do with the money.

Let's say they put the £100K in the bank and earn 1% interest then that means they'll earn around £1,000 a year before tax.

Imagine if instead of selling the house (to earn £1,000 a year interest) they agreed to do a Rent to Buy with you instead. Let's say the rent is £650/month then over a year that's 12 x £650 = £7,800 a year before tax.

So you could suggest to the owner that if they did a 5 year Rent to Buy with you, they'll earn 5 x £7,800 = £39,000. Which is a lot more than 5 x £1,000 = £5,000 if they sell immediately and put the money in the bank.

So can you see now why a Rent to Buy proposal can still be attractive to a house seller who has no mortgage on their property?

How long has the house been up for sale?

You can tell how long a house has been up for sale on the popular online portals such as Rightmove & Zoopla. And knowing how long a property has been on the market is an important piece of information you need to know - HERE'S WHY.

It's all about the motivation of the house seller really and where their mind is with regards to their property.

Because an unsold property has multiple costs associated with it. For example there's the mortgage that needs to be paid every month. And there's also the council tax, the water rates, the electric and gas standing charges etc etc. This all adds up to a large amount of money.

Scenario A - house just gone up for sale

Let's imagine this house has only been on the market for 7 days. In this scenario the owner will be "convinced" that their property will sell quickly. And that they'll sell for the full asking price. That's because this is what their estate agent has told them. And of course their estate agent is the best estate agent in the world at selling houses quickly and achieving the full asking price - or so they say.

Scenario B - house up for sale for 4 months

Let's now imagine that this house has been on the market for 4 months already. The owner is now "far less convinced" that their property will sell. But around this time their estate agent will start "suggesting" that they drop the asking price a little which the owner duly does. So right now this owner is still clinging to hope that their super estate agent will get them a sale.

Scenario C - house up for sale for 10 months

Fast forward another 6 months with 3 price drops, 10 viewings and no (sensible) offers. The owner is now tearing their hair out and possibly thinking of switching estate agents. And their monthly costs (mortgage etc) are killing them.

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So the point being made here is that the more time that passes with a house remaining unsold - the more motivated the seller will be to "do something" apart from waiting for their "waste of space" estate agent to deliver the goods.

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​Now imagine you show up after 12 months of the house being up for sale and you mention Rent to Buy to the owner. Do you think the owner might be interested in listening to what you have to say? Renting and then Buying their house may now be very appealing to the owner and exactly what they need?

Yet rewind 11 months. If you were to suggest Rent to Buy when the property has only been up for sale for maybe 28 days or so - can you see that rent to Buy won't be as appealing to them?

It's simply a matter of timing here. Look for properties that have been up for sale for at least 3 months and you'll find a number of house owners who will be very interested in your proposal of Rent to Buy.

​It's simply a matter of timing here. Look for properties that have been up for sale for at least 3 months and you'll find a number of house owners who will be very interested in your proposal of Rent to Buy

​Does ​any mortgage already have consent to let?

If the property owner has a mortgage on the property then the question here is what sort of mortgage is it? Because there needs to be something called "consent to let" in the mortgage conditions. Consent to let means that the mortgage company have given approval for this property to be rented out.

In general if the property is a former rental property - for example it's been rented out in the past via Buy to Let - then the mortgage conditions will contain "consent to let" already within them.

However if the property is someone's former home then the mortgage is likely to be a "residential mortgage" (owner occupier). So consent to let is less likely to exist.

In the case of the latter "residential mortgage" however all is not lost - see below

​Can the owner obtain consent to let?

It is possible for the house seller to obtain consent to let on a residential mortgage by writing to their mortgage company and giving reasons why consent to let is being sought.

For example the reason might be that a change of circumstances means that the owner can no longer live in the house - and instead now needs to rent it out. This situation is more normal than you might think.

For example it could be that a couple have got together and now have two houses - so one can be rented out. Or possibly both parents have died. So the former family home is no longer needed as a residence - but can be a good rental property.

Or any one of a thousand other quite normal reasons.

​Rent to buy houses > conclusion

rent to buy houses

The good news is that there’s literally thousands of houses to select from that can all make perfect Rent to Buy houses.

Rent to Buy itself is a relatively simple concept when you break it down to its 2 core parts – which are:

  1. You rent a house first and then:
  2. You buy the same house later with a mortgage

A Rent to Buy home needs more thinking about than a regular rental. That's because you’ll also be buying this house at a later time.

Your Rent to Buy house can come from one of 2 main sources.

  • Houses currently advertised “For Rent”
  • Houses currently advertised “For Sale”

Rented houses make amazing Rent to Buy houses. That’s because very often landlords who are renting out their houses are actually also considering selling them.

There's 2 main reasons why rental properties make such good Rent to Buy opportunities. And that's because they already have 2 key ingredients in place that are essential for Rent to Buy.

  1. The rental property will already have the necessary Buy to Let mortgage in place to allow it to be rented out.
  2. The owner / landlord of the property will already be very used to renting out their property.

Houses currently advertised for sale can also make amazing Rent to Buy opportunities. There are of course a few things you need to consider:

  1. Does the property have a mortgage on it?
  2. Does the seller need the money from the sale right away?
  3. How long has the house been up for sale?
  4. If mortgaged – does the mortgage already have consent to let?
  5. If needed – can the owner obtain consent to let from the mortgage company?

I hope you enjoyed reading this post.

Please take a look at the FREE Rent to Buy training course.

Regards

Phil

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Phil Calladine
 

"Hi there - I'm Phil Calladine - living in Lymm, Cheshire, UK. My wife Karen and I have a wealth of property knowledge - and we're sharing it all with you - here on this website"

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