Council Tenants or Letting Agency

yasmin2

I am looking to rent my property out and have been doing some reading about it but would be interested in other people's points of view/experiences.

Should I go through a letting agency with no guarantee of tenants and therefore income, who charge a nice hefty start-up fee and then a management charge OR do I sign with an agency who act on behalf of the local council and lease it for three years. Leasing it for three years means that I am guaranteed rent regardless of whether its occupied or not. I don't have to look after it and it is returned to me in the same condition that I hand it over in. A couple of things concern me here though. What happens if the tenants refuse to move out after the three years - whose responsibilty is it to evict them? will it be mine or the letting agency that I have leased it to?
Also do mortgage companies allow leases for that long?

Any help/info/pointers gratefully received...

mickmg

Hi sorry i have no advice for you but i'm interested in doing the same sort of thing, i've never heard of an agency that acts on behalf of the council. Where did you hear about this option ? have you any info or web addresses on this. Thanks in advance

yasmin2 wrote:

I am looking to rent my property out and have been doing some reading about it but would be interested in other people's points of view/experiences.

Should I go through a letting agency with no guarantee of tenants and therefore income, who charge a nice hefty start-up fee and then a management charge OR do I sign with an agency who act on behalf of the local council and lease it for three years. Leasing it for three years means that I am guaranteed rent regardless of whether its occupied or not. I don't have to look after it and it is returned to me in the same condition that I hand it over in. A couple of things concern me here though. What happens if the tenants refuse to move out after the three years - whose responsibilty is it to evict them? will it be mine or the letting agency that I have leased it to?
Also do mortgage companies allow leases for that long?

Any help/info/pointers gratefully received...

david29dpo

my agent simply charges 75% of the first months rent with no management fee OR 10% per month. no bad.

silvercar

I wanted to lease it to a housing association but the local one isn't doing it at the moment. For those that are interested, they visit the property and agree the rent with you and also any actions they require prior to taking it over and then they do all repairs and rent it from you. Any hassles with tenants is their responsibility and they will give the property back to you at the end of the time, clean tidy and vacant. I would guess their rent would be slightly lower than the open market but I think you ar more than compensated. I know of one developer who only rents to councils.

If anyone is trying to find people to do this, you need to speak to council housing or housing associations and ask about "private sector leasing" schemes.

They are usually for 3-5 years so you need to be able to commit for that length of time.

lowis

my mortgage advisor rents her flat out to the council - and she gets just above market rate for it too. she said that the council are responsible for all repairs and upkeep too.

yasmin2

Do you think the mortgage company need to be told as I have taken a buy-to-let mortgage out on it. I just don't want them putting a spanner in the works as I am becoming a student in september and this will be one less thing to worry about.. As long as the mortgage is paid when its due, it shouldn't really be a problem with them as I will be getting council tenants in if I lease it to an agency.

how much info do mortgage companies require on a buy-to-let mortgage.

thank you for your responses

yasmin2

mickmg wrote:

Hi sorry i have no advice for you but i'm interested in doing the same sort of thing, i've never heard of an agency that acts on behalf of the council. Where did you hear about this option ? have you any info or web addresses on this. Thanks in advance

Hi, i just called the housing department of my local council and they were helpful. Gave me the contact numbers for the letting agencies who deal with them. Good luck

MiserlyMartin

Well technically you are supposed to inform your mortgage company if you are going to rent it out and seek permission, otherwise they are legally entitled to repossess the house when they find out. In practice they probably wouldn't repossess. They won't be happy though.

Tell them before you do it. They'll either give (temporary) permission or insist you remortgage to a buy to let one.

aloiseb

Years ago we had a flat to let out, and were advised against council tenants becasue (the theory went) they weren't paying the rent themselves, so they were less likely to take a pride in keeping the place looking nice - so the property value was likely to fall.

I suspect the person who advised this may have been just a bit of a snob:we lived there ourselves long enough to know that tenants of any sort can be inconsiderate about things like noise, tidiness and parking......! i think on balance if I was doing it again, I'd go with the council 3 year lease.

yasmin2

Tell them before you do it. They'll either give (temporary) permission or insist you remortgage to a buy to let one.[/QUOTE]

The mortgage is a buy to let one. The only concern is that it does specify that the rental agreement should only be for a year or less whereas the council (via the lettings agency) want a three year lease. I thought I might just be able to get away with it if I didn't inform my mortgage lender. Surely they would just be interested in me meeting my mortgage payments. Would I have to inform them if I was leasing it out?

MiserlyMartin

That changes things. You should really be able to do what you want if its a BTL mortgage. I wonder why they have the 1 year max rule here. They ought to be pleased if you have effectively let it for 3 years with no voids as it guarantees their mortgage payments.

Perhaps have a word with somebody on the quiet about the theory of a 3 year tenant.