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Renting at a loss (future gains in mind)

245

Comments

  • mstr
    mstr Posts: 10 Forumite
    Hoploz wrote: »
    What makes you think you would prefer to rent to the council than private tenants? You'd probably get the higher rent to cover your costs and the letting agent can manage it. You'll have more control over what goes on.

    I've had several rental properties over the past 16 years and have had long term tenants in situ for 2-3 years at a time quite often, it's quite normal for people to rent for the long term if it's a half decent property. We have hardly had any dead periods in between, and have only ever had one problem tenant who stopped paying, but even then I sent one solicitor's letter and he moved out. A lick of paint a weekend later and it was ready to go again good as new.

    My mate is in the building trade and does work for a couple of guys that basically let to the council, I've also set meetings up the some EA's, so just pursuing all avenues and the advice from this good forum.

    Cheers
  • mstr
    mstr Posts: 10 Forumite
    Thanks for the link!, these are all valid points I'm guessing not many people rent to the council here? maybe that is for a good reasons ( such as these )

    thanks!
    G_M wrote: »
    A commercial tenancy?

    Even if your mortgage lender permits this (unlikley) you'd be mad.

    Maintain control and let he property via an AST to tenants you choose yourself, and can evict yourself if need be.

    yes, there may be voids; Yes there is always a risk (as any business vnture) but your rent will be higher to compensate and you'll maintain control.
  • Don't do it.

    Get nice, boring, working tenants that pass credit & reference checks on 6 month AST then rolling periodic.
  • Cakeguts
    Cakeguts Posts: 7,627
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    Check what sort of property rents well in your area. There is no point in even considering this if you have the wrong type of property. Many people assume that the kind of house they buy to live in will also make a good rental. In many cases they do but on the other hand in many cases they are not the sort of property that tenants are really looking for. You have to check the market.
  • Crashy_Time
    Crashy_Time Posts: 13,386
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    mstr wrote: »
    Hi,

    I looking at moving after buying my house for the wrong reasons, I have the deposit and funds to buy another house so don't need to sell this house for that.

    I was looking at renting it out quite a while back ( I guess like many people think about ) but the rental ( I'm looking at the council as they are quite keen and offer a 3 year contract ) is going to be about 50 - 70 quid lower than the mortgage ( not final figures but close ).

    I really want to be hands off as possible and they offered a tempting idea.

    The shortfall is a problem and my thinking is as they pay the bulk of the mortgage i should not be to long before it equalizes. Also they are effectively the landlord as they explained they have all the insurances so I save a little on that. I would still be liable for boiler or shower breakdown etc ( if by the tenants they would do the repair).

    Is this a crazy idea, has anyone rented on a loss for a couple of years with hope that it worked out ? I called the mortgage company and just need to fill out a consent form for renting but I cant applies for a fixed rate mortgage if they give consent just tracker so if rates sharply increase in the next 3 years.......

    Crazy as a fox?

    Thanks :-)


    Have you tried approaching University/colleges and offering it as a rental to visiting staff/mature students? Most private tenants will move as soon as they find a cheaper rent, unless the house is really exceptional, so you would need to be competitive on price there anyway, and the council will be dealing with any problems and I presume fixing any damage....? If rates start to rise there will be plenty of BTL`ers in the doo doo, so I would take what I can get and pay the mortgage down fast.
  • Grenage
    Grenage Posts: 2,897
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    Most private tenants will move as soon as they find a cheaper rent

    That is so clearly not true.
  • Crashy_Time
    Crashy_Time Posts: 13,386
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    Grenage wrote: »
    That is so clearly not true.


    Evidence please.....
  • Grenage
    Grenage Posts: 2,897
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    Why one way and not the other? Where's your evidence?

    Most renters I know are exactly the same with their house rent as they are with their energy supplier or media package - not bothered and happy to let it keep rolling over.
  • Grenage wrote: »
    Why one way and not the other? Where's your evidence?

    Most renters I know are exactly the same with their house rent as they are with their energy supplier or media package - not bothered and happy to let it keep rolling over.

    There can be more reason to stick with a landlord then with an energy supplier, too. There's costs and hassle involved in moving for the tenant, people may like neighbours, community etc, and the insecurity of renting privately means many may stick with a landlord they know to be decent (or at least not bad) rather than move. People will be drawn more to cheaper places, but it's not the most fluid market...
  • Crashy_Time
    Crashy_Time Posts: 13,386
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    Grenage wrote: »
    Why one way and not the other? Where's your evidence?

    Most renters I know are exactly the same with their house rent as they are with their energy supplier or media package - not bothered and happy to let it keep rolling over.


    How many renters do you know?
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