Renting Your House Out?

[Ladders]

Hello everyone!

 

Due to my life possibly taking a new direction, I may be relocating down south. I doubt that I'll be able to afford to buy anything straight away, and so am thinking of renting a place down there, and keeping my house in leicester and renting it out.

 

Whats the best way to get tennents in? Has anyone experience in this?

 

Is it better to Let a house out furnished or unfurnished?

 

How do I work out how much to rent it out at? (Ideally for the same amount as my monthly morgage payment).

 

And I presume that the house will get trashed a bit unless I'm lucky?

 

Cheers for any help!

 

Dave

[L7YSE]

Suggest you use a reputable agent if you're not used to it. If a local estate agent doesn't do it, they will probably point you in the right direction.

 

The agent will have all the tenancy agreement forms ready to go, will tell you the market-price per month for your property, AFAIK can do credit checks and know of local idiots to avoid, and will chase anyone that doesn't pay as required, and help extracate them if they become too naughty.

 

For a small slice of pie, thats not too bad in my opinion. I would be asking all those questions though, before going with one.

 

Oh, and I reckon, anyone wanting to look for a place to rent would look at estate agents fairly early on.

 

Hope that helps :-)

[Ladders]

Thanks Daniel, does help!

 

How much of a cut do they usually take?

[Jonathan E]

Mates of mine went to Australia for a couple of years and rented the house to some "good friends".

Needless to say when they returned the house was like a bomb had gone off inside, totally trashed and uncared for the whole time.

Rental agents will take around 10% of monthly rent, but will have only some control over what goes on with your property ie they tend to do 6 monthly checks but even then they haver to inform the tenants first.

Fwiw I'd be looking at selling the place and sitting the money somewhere until you can afford to buy down south.You'll miss out on any property rises but at least you won't be having to spend £££ on your place just to sell it.

Failing that ask around for names of reputable agents as some are really crap.Of course what you really need is a perfect couple like we've got next door(owner works in Dubai) they treat the place just like its thier own home,paint it and keep it looking great.....better than the bloke who owns it infact

Anyway,why on earth would you want to relocate to "down south" bunch of poofters

Hth

Regards

Jon

[GCCK]

Whatever you do, make sure that you get copies of reference letters forwarded to you before agreeing to tenants. Don't rely on Agent saying they'll look after that. My MiL got caught out with a rogue tenant and inept agent.

 

Agents can also field calls from tenants about maintenance issues - useful if you live a distance away.

[Whiz]

Hi there,

Have had quite a bit of experience with renting houses out and my advice is to get a reputable estate agent by recommendation if possible.

 

This will obviously lower your income as they have to have their percentage but they'll do all the hardwork. They will vet the possible tennants, take a deposit, from which the cost of any damage will be deducted, check your house periodically and keep you informed. They will discuss with you any work that may need doing during the tennancy period i.e if your boiler breaks down or your washing machine leaks etc.

 

If you do this you will remove most of the worries and place them with the estate agent as it's their job to keep their landlords happy.

 

As far as furnished or unfurnished goes; don't expect other people to have your high standards so if you cherish your furniture don't leave it...

 

Hope this helps and good luck

 

Alison

[Ladders]

Cheers for the help so far!

[kimbo]

Dave

 

I think you have been given enough advise to make a decision however bear in mind you will require CORGI and elec certificates. Best to arrange these yourself as you can shop around wheras the agent will just go to his pet tradesman. Likewise if you can arrange a cheap maintenance contract on the boiler etc this will save the agent getting a new boiler fitted when the pilot light blow out. Also worth taking a series of photographs of the condition of the place ... that way you can have a 'go at' your agent if things arn't kept up to standard.

 

I wouldn't sell if you can afford not to. Obviously going down south for the big pay rise ..... get another/increased mortgage .... go for it

 

Kim

[Ladders]

Dave

 

I think you have been given enough advise to make a decision however bear in mind you will require CORGI and elec certificates. Best to arrange these yourself as you can shop around wheras the agent will just go to his pet tradesman. Likewise if you can arrange a cheap maintenance contract on the boiler etc this will save the agent getting a new boiler fitted when the pilot light blow out. Also worth taking a series of photographs of the condition of the place ... that way you can have a 'go at' your agent if things arn't kept up to standard.

 

I wouldn't sell if you can afford not to. Obviously going down south for the big pay rise ..... get another/increased mortgage .... go for it

 

Kim

 

Cheers Kimbo, some more stuff I hadnt considered!

 

Suppose fire alarms all round as well etc etc!

[Steve J]

There's a lot you need to consider Dave. We rented ours out for 7 years. 1st was through an agent and I'd never do it again. They took a huge % for nothing. References were worth nothing with no come back.

 

You have to look at the likely renting potential and associated costs for your house vs selling up and banking the profits.

 

Would be happy to sit down with you over a beer to go through options and tax returns etc.

 

However, first things first...... get that bloody kitchen finished

[Ladders]

There's a lot you need to consider Dave. We rented ours out for 7 years. 1st was through an agent and I'd never do it again. They took a huge % for nothing. References were worth nothing with no come back.

 

You have to look at the likely renting potential and associated costs for your house vs selling up and banking the profits.

 

Would be happy to sit down with you over a beer to go through options and tax returns etc.

 

However, first things first...... get that bloody kitchen finished

 

Tax stuff! Bugger!

 

Yeah, prob take you up on that beer if/when things progress!

 

But overall, would you do it again?

[Fiona]

I would do it again if we were in it for the long term. We made a good amount as we owned the house for over 10 years.

 

If you are in it to make money quickly in 1-2 years I would no do it. Better to pay of your debts or stick it in shares and savings. We were making only about £70 a month after paying mortgage and tax, insurance, upkeep, etc which, in my opinion, isn't worth it as I could have that in a good savings account.

 

Keep it for a while and you make a good return on capital growth as the capital gains tax liability reduces over a 10 year period. You won't make anywhere near the same return in the short term.

 

The upkeep of the house must be kept up to get the standard of tenant you desire. Let the house get shabby and you get shabby tenants. We had to pay to get our house re double glazed when a tenant was in it. These things smart a bit as you are paying out a lot of money and you are getting no "instant" benefit.

 

All things to keep in mind.

[Ruxpin]

Maybe i was lucky? but i didn't have a problem renting my place out for 3 years. House was in good nick when i moved out and wasn't trashed by any of the 3 tenants - first chap to rent appeared to look after it better than me was unbelievably clean when he left!! Tenants were all professionals, no pets, no smokers etc.

 

I rented unfurnished through a local agent (Hetterleys) - price difference between furnished and unfurnished is small plus insurance is then less as you only need buildings (Endsleigh do a reasonable landlords policy - about £120 for 75k rebuild cost)

 

Gas cert is £50 to £100. Electric (optional) is similar.

 

I covered my mortgage but with rates rising i think you might struggle now (obviously depends what % of house is mortgage)

 

Agents fees were reasonable (and negotiable) considering it is fully managed and in the 3 years i received the money on time every month. They have arranged minor fixes at reasonable cost etc. I guess you need to find an agent you can trust - much like car servicing etc... Tenant introduction fees are on top of the 10% though (about £150).

 

Very much depends on your future plans - if you move south and come back are you going to move back in? Or will you have progressed up the ladder? Cost of selling/buying/selling/buying etc if you move south and buy and then come back is obviously going to be high - but depends on time scales.

 

House prices seems steady in Leics but are still rising in London etc etc.... Its a very difficult decision i'm afraid

 

If you do rent and decide to sell at a later date you won't pay capital gains tax on the house if its value increases if you sell within 3 years of it being your primary residance.

[Ladders]

Hi Fiona!No I'm not looking at it to make a profit, just so that I'm still on the property ladder while I rent. If I can just cover the Morgage I'd be happy!Ruxpin, didnt you live Loughborough way? Is that where the house you rented was? We've got a Hetterleys our way anyway!Yes, hoping to get profesionals in (not the ones who drive a Granada! ).

[Ruxpin]

Ladders, yeah my house was in Quorn

 

Hetterleys were fine with me. They're maybe not the most flashy with glossy brochures, big adverts etc but their costs were more reasonable than others and in the 3 years i didn't have any problems. The house was unoccupied for 1 month in 3 years after a tenant moved out over xmas - apart from that was rented continuously.

 

They were recommended to me by a friend who has several properties with them.