Leading lettings management platform, Howsy, has revealed that buy-to-let investments with a tenant already in situ are most in-demand across Glasgow, Leeds and Bristol, while Cardiff, Oxford and Leeds are home to the highest chance of buying a buy-to-let complete with a tenant.
Buying a property with a tenant in situ means there is already a tenant living in the property and depending on the terms of their letting agreement, they are legally allowed to see out their tenancy even if the property changes hands via a sale.
Providing the tenant is a good one, buying with a tenant in situ can bring a number of benefits.
Right off the bat, you’re receiving rental income so not only do you save money on agent finding fees but it also reduces any initial void periods where rental income is reduced while you try to find a tenant.
Not only can you access the tenant’s rental history when buying to ensure they are trustworthy, but you can also plan ahead knowing exactly how long they will be in the property. This allows you to budget effectively for the first few months at the very least, with a guaranteed level of income.
If the tenant decides to renew their agreement, even better, as you will have saved a considerable amount of time and money which all helps towards maximising profit margins in a tough sector.
So why don’t landlords always buy with a tenant in situ?
Well, Howsy’s research shows that across 23 major UK cities, just 0.8% of all properties currently listed for sale come with a tenant in situ. This means the chances of finding the right property to invest in, and it coming complete with a tenant, are slim.
Cardiff is home to the highest number of homes for sale with a tenant in situ, but they account for just 3.7% of all homes listed.
Oxford (3.1%), Leeds (2.9%), Newport (2.3%) and Portsmouth (2.1%) are also home to more than two per cent of available property stock with a tenant in situ.
When it comes to demand for these homes, Glasgow ranks top. Of all homes listed with a tenant in situ, 62% are already under offer or sold subject to contract.
Leeds (55%), Bristol (55%), Nottingham (52%) and Edinburgh (50%) are also home to high demand for homes for sale with a tenant in situ.
Founder and CEO of Howsy, Calum Brannan said, “Providing the tenant is the sort of person you want to rent to in the first place, purchasing a buy-to-let with a tenant in situ is the modern-day equivalent of the golden fleece for UK landlords.
“It can take a whole lot of the headache out of the initial start-up phase of your investment, reducing the initial rental void period usually suffered while finding a tenant, as well as saving on agent finding fees.
“Of course, you may want to revamp your buy-to-let to appeal to a certain market segment and so having a tenant in situ may not seem like a great idea. However, on the contrary, it can also provide a perfect platform for this work.
“Not only do you have time to plan your property overhaul while the tenancy runs down, but you’re also earning additional income while you do, which will help towards the costs. Unfortunately, buy-to-let properties for sale with a tenant in situ are few and far between, although there are certain pockets where you have a better chance than others.”
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