If you’re currently renting a property and love the home so much you’re tempted to buy it outright, you are not alone. Although it’s far from the norm, tenants do, from time to time, come to us with the question, ‘Can I buy my rental property from my landlord?’.
It’s a good question, and it’s also a relatively straightforward one to answer. That being said, before we get to the answer (spoiler alert...it’s good news!), we often fire straight back with another question, namely...
What really suits you best? Owning or renting?
This may seem like an odd question to pose to someone who is enquiring about buying their rental, but it’s a vitally important one for the tenant to answer honestly. Home ownership is a very British thing, seen almost as a badge of honour to many, but that doesn’t automatically mean that it’s right for you, right now.
As you can probably imagine, there are plenty of variables to consider when pondering this poser. Luckily, we’ve already written an entire article on the subject, so you might want to open up Which Is Better: Renting Or Buying? in a new tab to double check whether or not buying is the right thing to do.
Don’t worry, we’ll wait patiently here for you while you weigh up the pros and cons 🧐
So, can you buy the property you rent privately?
All done? As you’ve returned to this post we’re going to make an assumption that buying is indeed still something you’d like to consider. Excellent choice!
As we alluded to in our intro, you’ll be pleased to hear that the answer to the question, ‘Can you buy the property you rent privately?’, is a resounding - ‘Yes’.
Before we get too carried away, though, it’s important to remember that just because you want to buy the property you rent doesn’t automatically mean you can buy it. There are, as always, other factors at play, such as:
- Will your landlord want to sell?
- Are you able to raise the required deposit?
- Can you secure a mortgage in principle?
We’ll run through these in greater detail below in the ‘How to buy a privately rented property’ section. Before we do, though, let’s look at some of the reasons why buying the property you already rent can be beneficial.
The benefits of buying a home you’re already renting
Providing your landlord agrees to sell, there are quite a few advantages to buying a home you’re already renting:
- It can result in a cheaper move, thanks to a reduction in fees paid
- No need to pack all your stuff...you’ve already moved in!
- Long term tenants may be able to negotiate a reduction in the asking price
- You know you already love the property and the area it’s situated in
- Pets and children, if you have them, will already be settled
- You’ll only have to deal with the landlord, so there’ll be zero competition
- Time saved can be significant when compared to buying from the open market
Sounds good, doesn’t it? Let’s get down to the nitty-gritty of how to go about buying that rental, then!
The process: How to buy a privately rented property
Now you know that you can potentially buy the property you rent, and have some solid reasons to do so, the next step would be to work out how to best go about it. Don’t worry, we’re not going to leave the working out to you. We’ve got the four steps you need to take to give yourself the best shot at a successful purchase all laid out below:
Step one: Run the numbers
Before you do anything else, it’s really important to know just how much buying, and then owning, a property costs. Regardless of whether this is your first property purchase or not, give our First-Time Buyer’s Guide a read to get the lowdown on what you can expect to shell out and how to calculate it all correctly.
It sounds almost silly to say, but knowing that you can really afford to become a homeowner is essential, so make sure the figures add up before moving on to step two.
Step two: Do your homework
Yep, sorry about this, but working out whether or not buying your rental is financially viable isn’t the end of the research and calculation process, unfortunately. In this instance, though, we’re talking about property market homework, and it’s well worth the time you’ll invest in it.
The good news is that it shouldn’t take too long to get a rough idea of what the local market is like and how your prospective purchase sits within it. You’ll need to look at similar properties (size, type, location, etc) to get a handle on how easily they are selling and at what price in order to negotiate competently with your landlord.
Both Zoopla and Rightmove are great for this kind or research, but don’t forget the local experts on your High Street. Although you can complete the purchase without the help of an estate agent, obtaining a few independent valuations is highly advisable at this stage.
Ask the agents you choose to provide a realistic figure on what the property should sell for, as opposed to what they think it should be marketed at.
Step three: Make some mortgage enquiries
Now that you have a fairly good idea of what the property in question is worth, it’s time to find out about getting a mortgage and what that will potentially cost you each month.
The easy way to do this would be to make use of the many comparison websites out there. There are loads to choose from these days, including:
While it may be a little tiresome to repeatedly enter your details into these sites, it’s worth taking the time to go through a few to get a broad picture of the deals that are out there. Many of these comparison sites will only show results from a select range of lenders, so you could be missing out on a good deal if you only use one.
Another alternative, of course, is to find a reliable and reputable mortgage broker to do the leg work for you. Although mortgage brokers will command a fee, the money a good broker can save you makes the additional outlay something well worth paying. In fact, you could almost see it as an investment rather than a cost.
Do bear in mind, however, that you are only at the preliminary stages, so don’t commit to anything just yet. The biggest step is yet to come...
Step four: Speak to your landlord
With all of your ducks in a row, it’s time to ask your landlord the big question, ‘Would you be willing to sell?’ You can ask this quite informally, but hold back on actually making an offer just yet. You’re simply enquiring about potentially buying at this stage and expressing an interest should selling up be something your landlord would consider.
Once you’ve established your landlord’s willingness to sell, it’s offer making time. The best way to do this would be by way of a written offer handed to them in person. You should make your offer clear and concise, with what you consider to be fair market value for the home forming the basis of your correspondence.
From there, things can go three ways: A yes, an outright no, or let’s negotiate. If your landlord wants to enter into negotiation over your initial offer, remember everything you’ve found out about the property price and your own finances before committing to anything. Do not get carried away!
As with every property purchase, there will be ups and downs along the way and you’ll need a little luck on your side. Buying a property you’re renting can be a great way to get yourself onto the property ladder, but you will need some fair winds to make it happen.
If you’re looking to buy, sell, rent, or let in Wanstead or E11’s surrounding areas, come and speak to Petty’s. We’ve been helping people just like you get moving for over 100 years, making us one of the oldest estate agents in East London.
Our friendly team of experts are always on hand with friendly, practical advice, so why not give them a call to find out exactly how we can help you make your property dreams a reality.