If you’re looking to start or expand your rental portfolio, buying a tenanted home can be an attractive, smooth and chain-free proposition.

As some private landlords sell up, others with newer business models are taking advantage of the shortage of rental homes and the constant high demand from tenants.

Buying a tenanted home means immediate income from the day you complete, and bypassing the time-consuming tasks of renovating, marketing, and finding new tenants from scratch.

At the same time, inheriting a tenancy also means inheriting the outstanding responsibilities of the previous landlord, including any mistakes they may have made around legal compliance.

This makes due diligence essential, and we’ve created this checklist for buying a tenanted home so you can:

Analyse the property’s performance

Review the management history

Quiz the current tenants

Check for compliant paperwork

Secure the appropriate finance

By asking all the right questions before making an offer, you can ensure your new acquisition is a worthwhile beginning or addition to your portfolio.

ANALYSE THE PROPERTY’S PERFORMANCE

To make a confident choice around the suitability and sustainability of a potential rental investment, it's all about doing your homework, from location, to physical condition, to the strength of local demand.

Talk to local agents about current rental values and the appetite for similar homes to see if the current rent aligns with the market, and whether there's further income potential.

Make your own thorough physical inspection to check that the heating, hot water, and any appliances work properly, as they won't be tested during a standard mortgage valuation.

Explore the immediate neighbourhood in the day and evening to see how it feels and assess the proximity of amenities for your target market, from transport, shops, to schools.

A property that stacks up on paper must also stack up in person to ensure your long-term returns are protected, and that no immediate maintenance surprises are waiting for you when you complete.

QUIZ THE CURRENT TENANTS

An advantage of buying a tenanted home is gaining valuable insight into its character and quirks from people who already live there and have no agenda around the price it sells for.

So it’s really worth asking to speak with the existing tenants to get a clear idea around things like:

Their experience of living there, any niggles or annoyances, whether they want to stay for the long term, or if they’re planning to move in the near future.
Their communication and character, helping you decide if they’re the kind of tenants you want to manage.
Any repairs or improvements that remain outstanding. You might be able to get the current landlord to complete them, or to negotiate on the price.

As well as giving you some clarity and peace of mind, meeting the tenants can also give them comfort in their future landlord and avoid them looking elsewhere and leaving - good ones are worth keeping.

REVIEW THE MANAGEMENT HISTORY

After buying a tenanted home, you step into a pre-existing legal relationship, so you need to know the calibre of the tenancy you’re inheriting as well as how well the property has been maintained.

Request a schedule of rent payments to confirm that the tenants always pay in full and on time, and whether they report problems promptly and act responsibly.

Ask for written details of any maintenance issues reported during the tenancy and verify whether all necessary works were completed to a professional standard.

Enquire whether the current landlord has made any other improvements - from decorating, to replacing appliances, to any repairs and upgrades - so you can gauge their level of care.

Understanding the history of the tenancy allows you to spot potential red flags early, ensuring you don't inherit unresolved disputes or a backlog of expensive repairs.

CHECK FOR COMPLIANT PAPERWORK

Compliance is a large and complex area of the rental market, so before offering on a tenanted property, check whether the current landlord has got things right to avoid being held liable for their mistakes.

Review the tenancy agreement to ensure the terms are fair and that a comprehensive inventory with photographic evidence was signed at the start of the tenancy.

Verify that the security deposit was protected in a government-approved scheme within the legal timeframe, and that the tenants were notified correctly.

Ensure certificates for energy performance, gas, and electrical safety are valid, that smoke and carbon monoxide alarms were tested at check-in, and that any required licences are up-to-date.

Making these checks before going ahead can save wasted legal fees if you choose not to proceed, and, if you decide to buy, protects you from later fines and confirms your legal right to regain possession.

SECURE THE APPROPRIATE FINANCE

Getting a mortgage for buying a tenanted home requires a specialist approach, as lenders can view these purchases through a different lens than homes with vacant possession. So:

Consult an experienced independent broker who understands mortgage products for buying a tenanted home - this will help you avoid wasted conversations with unsuitable lenders.

Ensure the current rent meets modern stress-testing requirements, which typically require income to cover at least 125% to 145% of the mortgage payments.

If the purchase price reflects today’s rents rather than the rent currently being paid, and you need the maximum loan-to-value ratio, you’ll need to show that a rent review is due.

Many buy-to-let mortgages simply aren't available on the high street, and a lot of specialist lenders only operate through brokers, so exploring the full picture will ensure you get the very best deal.

Thinking of buying a tenanted home?

We’d love to show you how we help landlords navigate these purchases safely so your new investment is compliant, profitable, and professionally managed from the moment you complete.

To enjoy total peace of mind when buying a tenanted home in the Wilton and Salisbury area, call us on 01722 580059 or email us at info@piccoloproperty.co.uk for all the local support, security and expertise you need.