Buying your rental property from the owner?

Hi All,

We recently moved into lovely new rental in a great area. This was the only rental in this particular area, which im told are very hard to come by. Most of the people living in the area have been here for over 20 years!

We going to be in a position to buy towards the end of this current lease (1 year) and would really like speak to the owners about buying their property..

What I do know (from chatting to the neighbors) is..

The owners bought the property in 2011 for about $500k. The location is great, but the house (old Queenslander) is very basic (inside) and has been semi-renovated. The owners were actually going to knock it down and build a new double story home on the block (which was going to upset their neighbors), but decided it was easier, more cost effective and practical to just buy something else in the area more suited to their needs, which they did.

Now.. my situation is as follows.. I am VERY happy renting this property and will be happy to rent for as long as possible (currently own 2x investment properties and in the process of selling one of them). To be honest, I would rather rent this property ($470 per week) than have to buy outside this area to because i want to own the home i live in.

I guess I would like to make it known to the owner that we will happily live in their property for as long as we can (and be excellent tenants, which we area), but at the same time, would love the property to buy the property should they think about selling.

Not sure how I would give them the message… i.e. through the agent or try get hold of them directly?

Anyone else been in this situation before?

Cheers,
Robbie

 

Just employ a Solicitor to find the title --holder ..Have the property valued as depending on the location size and zoning the ucv and present value will be very different from 2011 prices..
Have a Solicitor draw up a letter with a offer and see what happens,I get letters like that every now and again
..

 

Thats a great idea, what would a solicitor charge for something like this?

 

That would depend if you intend to employ the Solicitor through too settlement ..

The cost of the letter with title and various other searches will vary,one of the several Legal people within this site would have a better idea..good luck..

 

I've had a tenant make me an offer. They did it through the property manager. Had they gone through a solicitor it would have been a bit of waste of money because I've got no real interest in selling.

The result of the offer is that the property is probably worth about $750k. I told the property manager to let them make an offer, but as I'd never be able to buy into that neighbourhood again and have no desire to sell, I expected it to be a very generous offer. They offered $600k. It will increase in value in the future and the rent easily covers the mortgage at this point ($250k). I'm okay with the outcome.

My point is, if the property isn't on the market, don't expect that a low ball offer is going to motivate the owner. I'd be tempted to sell that property for $900k. I know that's unrealistic, but I really don't have any incentive to sell at this point.

 

Agree with @Peter_Tersteeg on this one simpler just to ask the PM to have a conversation and no cost to just find out if it is even on their radar. The only reason to bypass them is to try and avoid the sales commission which is a small incentive for most vendors, either they are open to selling or they aren't. 2% savings in a transaction like that is something but isn't normally enough to make a deal that much sweeter (I speak as a landlord who has sold 2 properties to my tenants before)

 

The PM route makes sense if the owner doesn't want to sell.

However, if they do want to sell, you don't know what agreement or relationship the owner has with the PM. I certainly wouldn't want to pay my agent the full 2% in a non competitive single buyer situation. Try to go direct.

 

I would try direct. You'll be able to find them possibly through the neighbours - sounds like they will be keen to help you.
I sold a property once to someone who hand wrote me a letter and mailed it. He knew what I had bought it for and made me an offer based on some comparable recent local sales.
Going through the agent could complicate things.

 

If you do want to go direct your lease should have enough info to get you started finding your vendor. I have located many a tenant and vendor via lease names even if phone number or address are deleted. Depends how much of a detective you want to be!

 

I agree any tenant that would make us an offer on a property not on the market by us would at least need to be at market rent.

Rental agreement as said by @BuyersAgent should proved enough details.

You never know it may trigger them to at least engage in conversation.

 

I have a property where the tenant has on numerous occasions offered to buy the home during routine inspections.

The property was purchased as part of my portfolio, plays a clear role, and would need to be replaced.

The costs that I see:
- legals to sell and buy
- stamp duty to repurchase
- CGT
- Agents commission .... check agency agreement, the agent may be due a commission if the tenant they introduced purchases.

Just to break even - the sale price would need to be market value plus the costs above. To say nothing of the hassle of selling and buying.

Therefore I’m not interested in selling ... the offer would need to be crazy to make it worthwhile.