Can I rent out my home?

One_Day_Rodney

You've really got to think long and hard about this..........

■ Will the expected rental money cover the cost of the monthly mortgage and buildings insurance?
■ Have you factored in the monthly agency cost if you do go down that route?
■ What happens if you can't get a tenant - can you afford to have the place empty?
■ Can you afford it if a tenant does a bunk or damages the house?
■ Have you allowed for running costs ? - remember, you are still liable for the cost of building, appliance and central heating repairs etc. even with a tenant
■ Will you pay your mother anything towards your keep while staying there? (Don't forget, if your mother lives on her own at the moment, she will lose her 25% discount on the council tax too......)

Personally, if you can afford it, I would stick it out for a few years and hopefully the negative equity will clear. You are still quite young, plenty of time for the next move.

There are costs you can save on e.g. 25% council tax discount for single living, low user rate for water metering, you will have lower utilities bills because the house is empty during the day etc.etc.

Chinkle

Speak to a lettings agent to find out potential rental rates and check if this will cover the mortgage and other associated outgoings, plus allowing for void periods. If all is fine, speak to your lender and ask there permission to switch.

I think it makes perfect sense to move back in with your parents and kids get to see their grandparents too when they visit.

You can then review things in a year or two and see if you want to sell up, move back in etc.

Thrugelmir

Chinkle wrote: »

Speak to a lettings agent to find out potential rental rates and check if this will cover the mortgage and other associated outgoings, plus allowing for void periods. If all is fine, speak to your lender and ask there permission to switch.

I think it makes perfect sense to move back in with your parents and kids get to see their grandparents too when they visit.

You can then review things in a year or two and see if you want to sell up, move back in etc.

and don't forget that any net rental income after deduction of allowable expenses is taxable. Only the interest element of your mortgage is allowable not the capital.

Jed_Bartlett

Should be fairly straight forward - we did this with Northern Rock at the end of last year.

Give them a call - they will send you a consent to let application form - fill it in (we wrote a covering letter explaining a bit more about why we wanted to rent the house out & our financial situation), and they will then consider the application and hopefully grant you a 12 month consent to let on your current mortgage deal.

We emphasised the fact that we were moving in with parents for 12 months to save money to start a family and as such we were living rent free so our mortgage payments were more than covered in the eventuality that our tenants failed to pay etc.

jayss

Can you look into a monday to friday lodger?

Could you sleep on the sofa when the kids stay?

Could you go to your mums when you have the kids?

Fly_Baby

Presumably, the OP has a job i.e regular income? If so, then I would agree with those suggesting to hold on to the house and rent it out. Providing you get tenants of course - this could be a matter of time. Then whatever is not covered by their rent payments can be topped up from OP's wages - he will no longer have the mortgage expenditure so it should be easily affordable. Some money will go to Mum for the board and the rest can be saved for the deposit for a new place.

How does that sound?

Ed_S

Fly_Baby wrote: »

Presumably, the OP has a job i.e regular income? If so, then I would agree with those suggesting to hold on to the house and rent it out. Providing you get tenants of course - this could be a matter of time. Then whatever is not covered by their rent payments can be topped up from OP's wages - he will no longer have the mortgage expenditure so it should be easily affordable. Some money will go to Mum for the board and the rest can be saved for the deposit for a new place.

How does that sound?

Yes, that's what i'm thinking. Even if the rental payments dont meet the mortgage payments, it doesn't really matter, i'll still have more spare cash than I have now.

Could you go to your mums when you have the kids?

Yes, I suppose I could - didn't think of that....thanks.

■ Will the expected rental money cover the cost of the monthly mortgage and buildings insurance? - No, but that doesn't really matter
■ Have you factored in the monthly agency cost if you do go down that route? - Yes
■ What happens if you can't get a tenant - can you afford to have the place empty? - Yes, but it would defeat the object a bit, obviously
■ Can you afford it if a tenant does a bunk or damages the house? - Probably not! I'd defo go through an agency if that helps
■ Have you allowed for running costs ? - remember, you are still liable for the cost of building, appliance and central heating repairs etc. even with a tenant - I would be anyway, if I lived there.
■ Will you pay your mother anything towards your keep while staying there? (Don't forget, if your mother lives on her own at the moment, she will lose her 25% discount on the council tax too......) - Yes, i've taken this into account also


Thanks for the replies all, i'll have a think and see what NR say.

alexlyne

our lender said they wouldn't consider giving us consent to let unless we had 85% LTV or better.

Thrugelmir

Fly_Baby wrote: »

Presumably, the OP has a job i.e regular income? If so, then I would agree with those suggesting to hold on to the house and rent it out. Providing you get tenants of course - this could be a matter of time. Then whatever is not covered by their rent payments can be topped up from OP's wages - he will no longer have the mortgage expenditure so it should be easily affordable. Some money will go to Mum for the board and the rest can be saved for the deposit for a new place.

How does that sound?

Renting out sounds such an easy option. But it has a huge number of pitfalls and isnt neccessarily cost effective.

As the OP appears to be in negative equity. I would personally take the view that gambling on an upturn in the property market isnt worth it.

Move in with your Mother, clear your debts then start afresh.

Ed_S

Jed_Bartlett wrote: »

Should be fairly straight forward - we did this with Northern Rock at the end of last year.

Give them a call - they will send you a consent to let application form - fill it in (we wrote a covering letter explaining a bit more about why we wanted to rent the house out & our financial situation), and they will then consider the application and hopefully grant you a 12 month consent to let on your current mortgage deal.

We emphasised the fact that we were moving in with parents for 12 months to save money to start a family and as such we were living rent free so our mortgage payments were more than covered in the eventuality that our tenants failed to pay etc.

Jed, what was your LTV when you switched to a buy to let, if you dont mind me asking?