Renting our House Short Term

Doozergirl

socrates wrote: »

I would agree with you in general but not where the rent is lower than the mortgage - but as they are moving back in shortly its making the best of a bad situation.

Subsidising a tenant's rent is different when you're a landlord - you're supposed to make a profit, not rely on capital increases.

Ultimately, it shouldn't matter what house prices do if the house isn't supposed to be for sale. They're just trying to keep their home for when they can afford it properly again. You got that.

Charlie007_2

Again thanks for the info & advice, this is kind of helping.

If we could sell, we would, lets be honest things will not get better for would be house-sellers for at least 12 months yet. Just trying to get by and keep paying those mortgage payments, not missed a payment yet.

Anymore info & or advice greatly appreciated.

regards

franklee

Charlie007 wrote: »

Anymore info & or advice greatly appreciated.

Here's a discussion on this to give you an idea how tenants may view it:

http://forums.moneysavingexpert.com/showthread.html?t=1377883

I was pretty unimpressed when I found out my old landlord didn't have consent to let as you can see from the thread.

nrsql

I rented out my house when I worked abroad for a year. The mortgage company said it was fine as long as I returned then but if it went on for longer than a year they might want to transfer to a btl.
But I had a lot of equity in the property and there weren't issues about the market.

I also know someone (lets just say I've known him all his life) who had a residential mortgage on a flat he rented out but never got round to informing the mortgage company - even changed the correspondence address. Went on for six or seven years without problems until a re-mortgage as btl with another company.

If nothing brings you to their attention of the mortgage company then there's no reason for them to be concerned.
If you had contacted them before renting out it probably wouldn't have been a problem - given that you can't stop renting it out at the moment I would keep quiet. If you tell them you are having problems paying the mortgage and need to rent it out for that purpose they might see you as a higher risk and act accordingly.
Given your actions I would say that you should be classified as lower risk but they probably won't.

Good luck.

franklee

Charlie007 wrote: »

We have been doing this since Nov '08, and until now the Mortgage & Insurance has all been paid in full on time. We anticipate that all being well we should be okay to move back into the property May/June '09, but I am worried that I am deceiving my mortgage company.

I know I am not breaking the law!! , but that I maybe in breach of my mortgage terms & conditions. We make no profit from the tenants, in fact there is still a shortfall of around £150 a month which we pay.

Yes we though we could cope with the mortgage etc, credit & bills etc, but like most people found it all too much. We are seeing the light at the end of the tunnel now and cannot wait to move back into our house.

Also did you let your tenant know the property was only to be available for six months before they comitted? Only moving costs a tenant time and money. Fair enough if they were warned of your hoped for move back in date. If you want to move back in May you will need to be serving notice next month

Your thread illustrates why, as a tenant, I'd be wary of an "accidental" landlord, even less security of tenure than the little a tenant normally gets should the landlord get behind with his mortgage payments and the hassle of having to move when the landlord wishes to move back in or sell.

RainMaker_2

Charlie007 wrote: »

What are the consequences if they found out ??

Please, we are desperate for some sensible advice.

As has already been mentioned above, your biggest worry is one of insurance. If you had to make a claim they wouldn't pay out if the property was occupied by paying Tenants that weren't supposed to be there.

There are other worries, but insurance (or lack of it) is the biggest. Good luck.

tbs624

Agree with Rainmaker & Beingjdc on the insurance issue and it's not just about covering damage to your property. If one of your tenants was injured in the property, made a claim against you, and you don't have appropriate insurance in place.......................

Given that you omitted to get consent to let & proper LL insurances have you complied with things like gas safety certs, deposit regs compliance etc?

Whilst acknowledging the pressure of the financial strains you have been under, you do also have to consider the position for the tenants - especially given that their tenancy agreement would not be acknowledged by the lender should you default, as Franklee and Miss Moneypenny have rightly pointed out (here & in linked thread from Franklee's post))

Socrates has mentioned in several threads his desire for there to be newbie LL checklist on this board (yet won't start it off himself) however, anyone with a Mortgage can check the terms & conditions of that Mortgage for themselves before doing *anything* with their property and just speak to the lender at the start.

garetham

I am in the same position as charlie.

We have had our house for 6 years and decided to emigrate 2 years ago, the visa has finally come through and we leave next week.

I have a mortgage with IF and they do not do BTL....

We tried to sell the house for 9 months, but no joy, the house is now in neg equity and as we leave next week i have let the property out through an agent.

I have changed the insurance to BTL, but have not told IF.

The way i see this is i have no other options, its trying to do the right thing by getting the mortgage paid.

I know that i took the mortgage out for a residential but if i do not get some rent from this the mortgage company will have a repossessed property on there hands that is worth less than they lent me or i can continue to pay the rent in full for the next few years and then sell.

G

neas

Whats your contingency if... say for example house prices fall 40% from peak as suggested today?

Surely taking a 5-10k loss at the start would've been better than taking a 30k debt after being repossessed? oO.

Guess hindsight is wonderful though, i mean all the way through this crash.. for the last 10-12 months actually people started with:

1. Houses won't increase this year - We said they'd fall 25-30%
2. Houses will recover in a 'few' months - We said it would be at least 2 years of falls... probably 4 if last crash is anything to go by
3. I'll rent out my house because 'soon' it will increase again to the incredible levels it was at...
4. No... 6x average earnings is not excessive value for my house, no i dont believe I overpaid, over-mortgaged my house

We would have people who bought for 110k in 2006 try to sell for 130k in 2008.... who refused to drop the price down.... who are still trying to sell now. (If they hadn't been greedy and dropped it to 115k or 120k it prob haev sold)


Unfortunately... as time passes by these opinions appear to be merely there to convince themselves... it will be alright... when really the sensible thing to do was to cut your losses early.

Our economy is fubared, our pound has tanked incredibly over the last few months... please ohhh please tell me how things can get better anytime soon?

Why do people delude themselves? Wake up and smell the coffee... we are in a recession... people dont buy in a recession... and if we are in a depression... things are even worse. Nobody will pay 2007 prices for your house for many many years to come.

RainMaker_2

neas wrote: »

Why do people delude themselves? Wake up and smell the coffee... we are in a recession... people dont buy in a recession... and if we are in a depression... things are even worse.

But we will not ALWAYS be in a recession / depression. We will return to growth. The best time to buy anything is when nobody else want's it.