Renting out in order to buy!

[St_Jacques]

We have found a new property we would like to buy in France but need to sell our existing house first. However as we need to move quite fast to be able to put in an offer for the new house the estate agent in france has said we could rent out our existing property which would then cover our mortgage payment and enable us to purchase the new house with Credit Agricoles agreement and then hope someone would buy are existing house during the rental period.

Has anyone else been in such a situation?

Dale

[Owens88]

Nope, not been there but many have ! It is increasingly a logical option if moving within the UK.

Depends on how much equity you need from the first place.

BUT I may have missed a nuance or two about doing it in France, so wait for the next two busses before boarding.

Good luck

John

[Tresco]

Is your UK property on the market now, Dale? 

If it is, and it hasn't sold, my understanding is that it is even harder to sell with a 'sitting' tenant. People looking for a private home are wary in that situation.

I have no personal experience, but have good friends who have rented out as many as 5 houses at a time in UK, some privately, some through agencies. Going on what they have told me over the years, (with regard to the whole shebang) I can think of quite a few further reasons to be sceptical about the 'cunning plan' the estate agent has come up with.

Non paying tenants.

Increased Insurance costs.

Possible damage repair costs.

Improvements to comply with Health and Safety Legislation. (particularly if you intend to rent your house out furnished.

Increased maintenance costs for general repairs etc  - as you will not be there to oversee things.

Agency fees and/or solicitors fees.

I would be very, very wary but then I'm cautious anyway.[;-)] This is just my personal view (obviously) but I wouldn't want to purchase under the circumstances you describe. I'd want one house sold, before buying another, particularly if I wasn't even going to be in the country any more.

I'm sorry if this sounds very negative. It's not meant to be. I know how it feels to 'lose' a house. Then again, I know how it feels to be told by an estate agent, I'd more than likely 'lost' a house, and come back 3 months later to find it reduced in price.

 

 

 

[P]

Dale

Put yourself in the position of prospective buyer. You view the house to be told that there is a tenant who has just signed a 6 month tenancy agreement so completion cannot take place for 6 months. As has been mentioned what about damage by the tenant (also might have problems with viewings with a tenant there - they may wish to stay and will do things to put off buyers).

I was in the same position in the UK last time I moved - found the right house but needed to sell mine quickly. Said to the agent what do I need to do? Drop the price by £10k - this was on a Thursday. By Saturday I had a buyer that had just lost the house they were buying but did not want to break the chain. Result could buy the house we wanted.

Having said dropped £10k it was sold for £10k less than the advertised price. Asuming that we would have had to accept at minimum £3k less and probably more (who pays the asking price) we probably did not lose too much.

So my advice, drop the price and tell the agent they need to find a buyer quickly otherwise you might take it off the market.

Best of luck

Paul

[Lou]

Hi

You might also (if you haven't done so already) want to check exactly

what Credit Agricole's position would be - I work for an estate agents

and have had clients doing similar things, but the bank may still take the

UK mortgage into account on the debit side and not be keen to take a temporary rent into

account on the credit side, if you see what I mean.  Though this might

be academic depending on your general income anyway.

Have you also considered a bridging loan ("pret relais" in French)? 

Our local CA offers a 2 year deal which is not bad as far as I can tell.

Lou

[levisiteur]

There are LOTS of properties for sale in France. Is this house so unique like - on the beach own mooring etc., - that you think it is a ‘once in a lifetime opportunity.’ Post your requirements to this forum and you may be surprised how many people want to sell you their house. (I have a small farm for sale in the [:D]Vendée, house large barn land, lots of potential!!!)

 Especially if you rent your house out, ask the Bank if they are happy to continue the loan at a good rate - even after 2 years? I believe interest rates will increase very slightly, another factor to consider. I know of someone who had a house built on a plot next to their home, (deal with a new homes builder) and had a loan from CA for 12 mths, but their old house took almost 2 yrs to sell, they did not think that the Bank after 12 mths, would automatically start charging their standard rate-expensive!  

I agree with the other writers, especially wait for 2 buses! Look on the internet to see if you can find more similar dwellings.

I am trying to buy a property in England. The interest on the loan is high! You are not alone taking chances.

I wish you lots of luck,

Levisiteur.

[Debra]

What IS Credit Agricole's agreement?  Have they just introduced a special buy to let deal or something?  It's just that everyone seems to know what this is......except me!!

[St_Jacques]

How sorry all but I seemed to have misled you!! I am talking about renting out our current property in FRANCE - not the uk. So we would rent it out but at the same time still have it up for sale, so our french mortgage on it will be paid  which will enable us to take on a new mortgage for the new property we intend to make an offer on. Hope that is a bit clearer??

Sorry about that!

Dale

[Tresco]

You're saying you have a property with a mortgage on it, in France, and propose renting it out while it's for sale, so you can buy another house?

If I was cautious before, I'm even more so now.

How do you feel about what the agent has proposed. What's your gut instinct?

[Debra]

[quote user="St_Jacques"]How sorry all but I seemed to have misled you!! I am talking about renting out our current property in FRANCE - not the uk. So we would rent it out but at the same time still have it up for sale, so our french mortgage on it will be paid  which will enable us to take on a new mortgage for the new property we intend to make an offer on.[/quote]That's what I understood, Dale, so are you saying that CA would convert your existing mortgage to a 'buy-to-let' and not consider it in your outgoings when considering the mortgage on the new property?

I would be interested to know about that for my own purposes, but must add that renting sounds pretty dodgy in France.  For instance, what if you had a buyer come along in the winter months and your tenant decided not to leave?  (ie Doesn't the 'not allowed to evict in winter' rule stand on short term lease property?)  Is it possible to rent a property which is also for sale - ie are there cast iron guarantees that the tenant could be forced to leave if the property is sold?

[Kitty]

I've been in the property business for more years than I would care to admit.  Rented houses are hard to sell - they are not looked after properly (untidy & smelly) and arrangements for viewing can go awry.

[Kitty]

A further thought.  What is the rented property market like in your department?  Are you sure that you can let the house easily?  Do some investigations beforehand.