Want to rent my flat, but no buy-to-let mortgage...?

2912pwil

You MUST take out Landlords insurance. If there were a problem (eg fire) and you had no valid insurance then you (and the severley damaged tenant being interviewed in hospital by the Police) will sue you.. and you'd have no payment for the burnt down property...

Don't forget that when you report the income to the tax man (I know you will.. they have ways of finding out who rents and who is a landlord..) you can offset the interest on the mortgage against the income, thereby paying little (or no) tax on the rent.

Also, I strongly suggest you join a Landlords association (eg RLA see,..

http://www.rla.org.uk/
- if Scotland the law & association is differnet
)
as it sound like you'll need their advice...

Further, make sure you have the right tenancy agreements and form (eg deposit - which must be placed with a deposit organization) .. If you don't do these things right you'll have no / very difficult right to get the tenants out.

Good luck!

sarah_elton

If the flat is leasehold, the council will have buildings insurance. You shouldn't have buildings insurance of your own now, and you don't need it as a landlord. The building isn't yours, therefore it's not yours to insure. If something happens to the building, the council will claim on their buildings insurance.

Tenants will be responsible for insuring their own contents.

sarah_elton

2912pwil wrote: »

You MUST take out Landlords insurance. If there were a problem (eg fire) and you had no valid insurance then you (and the severley damaged tenant being interviewed in hospital by the Police) will sue you.. and you'd have no payment for the burnt down property...

The property is leasehold.

Is Landlord's Insurance something different to Buildings Insurance? Is it something that covers tenants for alternative accommodation in the event of fire etc? If so then it makes sense that OP needs that. She seemed to be talking about pure Buildings Insurance which is not her responsibility.

sarah_elton

Lou - another thought. You don't say if you're going away overseas. If you are, you should seriously consider using a managing agent to manage the rental property. If you're going to manage it yourself, you need to be contactable during UK business hours at least in case there are any urgent repairs needed by the tenants.

A managing agent will take a fee (about 10% of the rent I believe?) but if you're going to be out of touch then as a former private tenant I'd say please do it!

LouC

Thanks again - all this information is increadibly helpful.

f the flat is leasehold, the council will have buildings insurance. You shouldn't have buildings insurance of your own now, and you don't need it as a landlord. The building isn't yours, therefore it's not yours to insure. If something happens to the building, the council will claim on their buildings insurance.

Tenants will be responsible for insuring their own contents.

Yes the flat is leasehold - the lease is owned by the council. I have building's insurance through the council

Do i still need landlords insurance?

If, for example, the house burns down, will my insurance be invalided because i'm renting it out without telling the mortgage broker?

silvercar

You need permission of the managing agents or freeholder. They will need to confirm with the insurer whether the block insurance policy would cover tenant damage.

There would be nothing to stop you taking your own insurance out, but it would be difficult to find cover for part of a building.

LouC

Just to let you know, I spoke to the council involved and they said all they need for me to sublet is 30 quid and a letter with my contact details, and then the insurance isn't a problem...

carolt

I pity your poor tenants.

Is there anything else you're planning to not do by the book? Gas safety certificates, perhaps? Protecting the deposit? Energy certificates?

You do know about all of these don't you?

Not to say maintaining the property adequately when the central heting/cooker/etc suddenly stops working...

I do hate amateur landlords.

If you can't afford to rent, don't. Sell.

silvercar

Carolt, if you read #11 you will see that changing mortgages will cost £5-7k so OP would have less money available to cover repairs etc.

In an ideal world of course everyone should get the lender's consent.

In an ideal world the lender wouldn't try to rip people off when they have difficult financial decisions to make.

Lou isi going away according to his first post. What is better an empty property or one that provides a home for someone not in a position to buy?

(BTW I agree deposit protection and certificates are essential, as is declaring the rental income to HMRC.)

lic

Is there anything else you're planning to not do by the book? Gas safety certificates, perhaps? Protecting the deposit? Energy certificates?

Get a gas safety certificate, you canbe sent to prison if there is a deathand you do not have one.
Protecting the deposit is a must, only because if you don't you cannot evict the tennant legally.
As for the Energy Cert. I think it is a complete waste of time and money. Just another way to to create employment and make money from LL
Reading one of these reports would never influence my decision to buy or rent. That includes washing machines aswell. Complete and utter B******s.
Hope you get a renter soon, and enjoy your trip!