Looking into renting out my home - advice please

granny-mo

A little information first - I bought my first house just before the housing market crashed. I live on my own and it is looking like I might be getting made redundant. The housing market being as it is I don't believe that I would be able to sell my house and get my money back to pay off the mortgage.

I am attempting to obtain a positive spin on the situation and have looked into going back to University to gain a masters. If I do this my parents have kindly said that I can move back in with them for the 2 years.

So this brings me to my question... Can anyone please advise me on the information I need to know, and the actions I need to take to rent out my house?

What taxes and other payments do I need to look into?
I wouldn't mind tenants having animals living in my house but what provisions could I make to protect my house from damage?
I understand a gas certificate is required, any other certificates needed?
1 wall has rising damp in it, does this have to be fixed prior to me being able to rent out?
What happens to bills? And what if the tenant leaves without paying them?

Many thanks in advance for replies

MissMoneypenny

The first thing you will have to do is to ask your mortgage lender for their permission to let the house.

granny-mo

Can my mortgage lender refuse to give me permission? It's not up for renewal till December.

2912pwil

What taxes and other payments do I need to look into?
- Income tax on any PROFIT you make renting. So you'll need to keep accounts and list EVERYTHING relating to the tenancy - Insurance (oh yes, you must have landlord's insurance, mortgage interest (try & get to an interest only mortgage), fees etc. etc.. Make sure you use a reputable letting agency or at the very least a solicitor to draw up etc. the tenancy agreement. NB Tenancy Deposit regulations are very specific.

I wouldn't mind tenants having animals living in my house but what provisions could I make to protect my house from damage?
- Depends on the animal: A small pet hamster is one thing, 3 ill-behaved Rotweilers another. All the standard tenancy agreements say no pets without Landlord's written agreement.
I understand a gas certificate is required, any other certificates needed?
- Just Gas. However are you happy the electrics are up-to-date and safe for everyone (eg small children visiting..). Stick in a/some smoke alarms.
1 wall has rising damp in it, does this have to be fixed prior to me being able to rent out?
- I'd fix it: Otherwise tenanct may invite round environmental health to get you, the Landlord, to sort it out. Treat the tenant fairly and there's just a chance they may treat you OK. Treat them badly (eg rising damp) and what do you think they will do...
What happens to bills? And what if the tenant leaves without paying them?
- Tenancy agrrements make it clear bills (council tax, gas, elect, water, TV licence, 'phone) are his responsibilty. But read meters at handover & make sure you write to the gas/elect/council, copying tenant saying what is happening. I THINK if tenant disappears in less than 6 months you may be liable to council tax but you should check..

- Join a Landlord's association - eg
http://www.rla.org.uk/
- they have a wealth of advice, 'phone help & are somewhere to go if & when things go wrong.

DON'T think just exchanging keys for money with no paperwork protects you - the tenant would have more rights if you did that than with a normal tenancy...

Oh, yes, check with you mortgage lender & expect the interest rate to go up.

Good luck!

MissMoneypenny

granny-mo wrote: »

Can my mortgage lender refuse to give me permission? It's not up for renewal till December.

Some people on these boards say they got permission to let without any extra charge, others have to pay a fixed fee and some have been refused permission to let.

If you don't get permission to let from your mortgage lender then your buildings insurance will be invalid, even if you get a landlords insurance.

tbs624

Is the property big enough for you to remain there & let out a couple of rooms under the Rent a Room Scheme? See here for basic info on any sort of property rental.

On pets, you can stipulate that there are to be no pets kept at the property without your written consent, which will not be unreasonably withheld, and that such consent may be revoked if there are reasonable grounds for you to do so. Some LLs ask for a higher deposit for pets other than the small caged variety.

You'll need to get an Energy Performance Certifcate done (EPC) or you can be fined 200 quid - if you have one from your HIP you can use that. You'll need to read up on things like the deposit regulations (link above) gas safety, electrical safety,fire safety, so have a look here on LLzone.You'll also need to allow a contingency fund for repairs etc.

Don't think of including bills in the rent - Ts who are not responsible for their own utility bills will leave lights & heating on 24 hours a day. As the others have said, you just have to check meter readings on the Ts- way in and out of the contract: at the start of the tenancy you write to the utility company saying who the tenants are and give them the dates of the tenancy, telling them that the Ts will be reposnsible for all bills. Rising damp - yes of course you must get it sorted out prior to letting: have a look at what are classed as hazards under the HHSRS (housing health and safety rating system) under which the local council can assess your property.

granny-mo

My concern with the damp is that its on 1 of the kitchen walls, and to get it treated would mean that my kitchen tiles would all have to come up,and new skirting etc would be required. A cost that I can't meet at the moment, I do know that at present it poses no health risks - my dad's a damp proofer.

Am I able to say animals allowed but if someone applies with the 3 unruly rottweilers refuse the let? I don't know much about the rules of letting I'm afraid.

clutton_2

""A cost that I can't meet at the moment""

so how will you cope if the tenants stop paying the rent, or wreck the house, or the boiler breaks down ? you cannot go into business with no money

granny-mo

It's not so much a business as a way to make ends meet for a couple of years. Obviously once someone else is paying the mortgage i'll have alot more money to put aside for any emergencies, etc.

Thanks so much for your replies people, renting out is a very daunting prospect when you have no knowledge. You hear alot about tenants destroying houses and not paying rent or bills and leaving the landlord well out of pocket. Then again I don't suppose people write about the worthy tenants who pay all monies on time and have respect for the property.

MissMoneypenny

granny-mo wrote: »

Then again I don't suppose people write about the worthy tenants who pay all monies on time and have respect for the property.

If you rent out your house with it's damp problems because you can't afford to fix it, then you will get bad tenants. People tend to treat others the same way that they are be treated by them.

MX5huggy

While looking for your SVR I found Ambers (the OP's lender) charges.

Lettings £100.00
This fee is payable when you make an application to AHL for consent to let the mortgaged
property on a short term basis. The fee is paid directly to AHL for obtaining and consideration
of the ‘Application for Consent to Let’ form and any subsequent administration. Should it be
necessary to refer any tenancy documentation to AHL’s solicitors, you will be responsible for
payment of any legal fees incurred. To reflect the additional risk of having tenants in occupation
of the mortgaged property, AHL will also increase the rate(s) of interest payable on your mortgage
account(s). The rate of interest will be increased from the date the tenancy starts,
depending on the percentage of the loan to current valuation. For authorised lettings, if the percentage
of loan to valuation is 85% or less, the increase will be 0.50%; if it is above 85% the
increase will be 1%. If an unauthorised tenancy is created, the interest rate will increase by
1.5% for loans of 85% of the current valuation or less, and 2% for loans above 85% until the
breach of your mortgage conditions is rectified.