If you’re currently renting a property and you’re tempted to buy it, then you are not alone. It is important to remember that just because you want to buy the property you are renting doesn’t automatically mean you can buy it. There are always other things to consider, such as if your landlord wants to sell, are you able to raise the required deposit and can you secure a mortgage in principle.
Do your homework
Before you do anything, it’s important to know just how much owning a property could cost. Regardless of whether this is your first property purchase or not, you should do your research on what you can expect to shell out and how to do the calculations. Knowing that you can really afford to become a homeowner is essential, so make sure the figures add up.
Working out whether buying your rental property is financially viable is unfortunately not the end of the research and calculation process. The good news is that you can get a rough idea of what the local market is like and how your prospective purchase sits within it. You should look at similar property sizes, location etc, to get an idea on what price to negotiate with your landlord. Websites such as Zoopla and Rightmove are great for this type of research. Although you can complete the purchase without the help of an estate agent, getting a few independent valuations is highly recommended.
Let’s talk Mortgages
Once you have a good idea of what the property is worth, it’s time to find out about getting a mortgage and haw much it will potentially cost you each month.
The easy way to do this would be to make use of a comparison website as you’ll get a broader picture of the deals that are out there. Another alternative is to find a reputable mortgage broker to do the hard work for you. Although most mortgage brokers require a fee, the money a broker can save you makes it something worth paying for and you could almost see it as an investment in this scenario.
Talk to your landlord
Once you’ve established your landlord’s willingness to sell, you should then go into making an offer. The best way to do this would be by a written offer handed to them in person or you could do this via your estate agent. You should make your offer clear with what you consider to be fair market value for the property. From there, things can go three ways: Yes, a straight no, or let’s negotiate. If your landlord wants to negotiation your offer, remember everything you’ve found out about the property price and your own finances before committing.
Remember renting and owning a property are two very different things. Buying a property you’re renting can be a great way to get yourself onto the property ladder, but as with every property purchase, there will be ups and downs along the way which require a lot of commitment from yourself to get through the hurdles.
