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Tomas

Am Considering Offering 1-years Rent Up Front To Get Discount

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what would be the pitfalls of doing this?

The landlord would be an owner occupier who cannot sell but has bought elsewhere.

Here are the thoughts going through my head...

1. How do you guarantee that they wont go bust along with your cash?

2. We would be kicked out and out of pocket.

3. I know of several people that have done it but surely the contracts are arranged differently?

Any thoughts would be gratefully received.

P.S. It would be a 20% discount on the advertised rental price.

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1. You don't. However, if you ascertain the level of mortgage on the house, and firstly make sure your rental payments cover it; and secondly ensure that they have a sensible LTV, you should be able to conclude that you are reasonably safe. However, I wouldn't imagine that anybody who is prepared to give you a 20% discount is anything other than short on cash.

2. You would indeed. You need to ensure that the mortgage company is aware of your and the landlord's situations. Provided it is set up correctly, you might end up with a different landlord, but you wouldn't be kicked out.

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what would be the pitfalls of doing this?

The landlord would be an owner occupier who cannot sell but has bought elsewhere.

Here are the thoughts going through my head...

1. How do you guarantee that they wont go bust along with your cash?

2. We would be kicked out and out of pocket.

3. I know of several people that have done it but surely the contracts are arranged differently?

Any thoughts would be gratefully received.

P.S. It would be a 20% discount on the advertised rental price.

I don't see the point, that kind of money in an ISA would earn you 5% pa so your discount is know only 15% which you can get by negociation anyway.

Risk = too high, Value = too low... don't do it

A one year contract is good value for an LL anyway, perhaps offer two month upfront for a bigger discount, it would give the LL something to pay the LA finder fee with

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Firstly if your circumstances changed or you decided you did not like living there you would be disadvantaged.

Secondly i have been told that offering a large amount of rent upfront is sometimes considered suspicious (ie cannabis factory behaviour)

Thirdly if the rental market goes down, you will be losing an opportunity to reduce your rent in six months time.

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Might have considered it a few years ago but not now.

The risk in my opinion is too great, while the market might be suppressed the ball is still in the landlords court IMO.

What you would need would be assurances from the Landlord, his mortgage company and then a great deal of faith, the only sort of landlord I can imagine wanting such a deal would be one desperate for cash who would be exactly the sort who would be the most risky doing it with. If you don't pay up front you will be signing an AST and giving a deposit so the landlord can be pretty sure he will be getting the money anyway.

The only time I would advise doing it is if you had a poor credit history or other problems which might show up on checks, and even then I'd only do it on a 6 months at a time basis.

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Might have considered it a few years ago but not now.

The risk in my opinion is too great, while the market might be suppressed the ball is still in the landlords court IMO.

What you would need would be assurances from the Landlord, his mortgage company and then a great deal of faith, the only sort of landlord I can imagine wanting such a deal would be one desperate for cash who would be exactly the sort who would be the most risky doing it with. If you don't pay up front you will be signing an AST and giving a deposit so the landlord can be pretty sure he will be getting the money anyway.

The only time I would advise doing it is if you had a poor credit history or other problems which might show up on checks, and even then I'd only do it on a 6 months at a time basis.

My boyfriend and I tried offering rent upfront as we'd both sold houses and were sitting on a lot of cash. No one was interested at all (much to the surprise of my boyfriend, who is an accountant and couldn't conceive of anyone not wanting to have all the money upfront and be able to invest it, as it was clearly a much better deal for them) and we were told it was generally only done if there was a question-mark over the tenant's ability to pay (bad credit rating or some such problem, as gilf says above).

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My boyfriend and I tried offering rent upfront as we'd both sold houses and were sitting on a lot of cash. No one was interested at all (much to the surprise of my boyfriend, who is an accountant and couldn't conceive of anyone not wanting to have all the money upfront and be able to invest it, as it was clearly a much better deal for them).

Interesting that.

I can't really see what it offers the landlord, you would sign an AST anyway which would mean you were committed to paying the rent for the full year so why would the landlord take less money up front in bulk.

It doesn't work on an investment front as the point of the OP was that they were using it as a tool to pay less over all, I would imagine they were looking for a decent reduction for the risk, 5-10% and any landlord, even if they owned the property outright, wouldn't be able to make up that amount of short full via a year long investment.

All I can see it as, especially in the current climate, is a risky strategy from the tenant.

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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