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How do you calculate the value of a property which has a sitting tenant in it?

Asked on Oct 2 2012, House Prices in Manchester | Report content

Answers (1)

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  • This can be difficult as it depends on the type of sitting tenant. Is it a long standing tenant who has a lifetime lease but is paying a rent? or Is it literally someone who just will not move out and pays no rent and there is no legal way of moving them out now or in the near future? The former some companies will buy property dependent on the age of the tennant ie how soon will it become vacant (sounds awful but how long may it be before the tenant passes away) and they will calculate their own risk assesment from there, also taking into account any income the property will provide and how likely they are to receive it. The latter, you might find no-one will buy the property as mortgage companies may not lend, which could still be the case on the first scenario too. If it is cash buyers only based on the type of sitting tenant and no clear picture as to when they move out your looking in my opinion at atleast 25% off market value (and possiblt higher for some) but again this is based on other factors which you would need to know to form an opinion as a buyer. The point being a property is worth what someone is prepared to pay, so all the facts of the sitting tenant would be required. Hope this helps a little bit.

    Answered on Oct 2 2012, Report content

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