First time landlord - help!

vbt

Hi,

I've just accepted a job abroad which will be for 1 to 3 years and which includes accommodation and bills, so I'm going to rent my flat out whilst we're away.

I'm a bit nervous because it will be the first time I've ever been a landlord. We've got a letting agent coming round to do a rental valuation next week and they charge £395 plus VAT as a tenant finders fee which includes all the credit checks and referencing etc, and then the same amount again if the tenants re-sign, or they find someone else to sign in the future.

They've offered us management fees of 10%, or 12.5% a month including a rent guarantee (I think I'd feel safer with this option). They also do a property check every 3 months, and said that they would happily email me a copy of this each time.

Do these fees seem fair? We've heard good things about the letting agent, who are an independent estate agent, and I got a better impression of them than a major high street agent who wanted £650 plus VAT as a letting fee, but only £120 for a re-sign/renewal fee. Their management fees were the same too. They just didn't come across well to me at all when I spoke to them.

Also, do I have to file a tax return for this? We go away in July - do I need to register to do this, and if so, when?

My mortgage company, Nationwide, said it wouldn't affect my mortgage, but that I have to fill in a form informing them, which they're sending me out today.

Lastly; is this likely to affect my contents insurance (we're renting the flat out furnished, but without the TV/stereo etc)?

Is there anything else I need to think about? Any advice gratefully received; it's all a bit overwhelming at the moment!

Thanks!

ET1976

1. The fees sound pretty standard.
2. You need to inform the tax office - just phone them up, do it ASAP. I don't know how it works if you are abroad - different rules to if you're a UK landlord - but your agent should know.
3. You need landlord's contents insurance. I use Endsleigh, but other people on this board don't recommend them, I don't know why (but I have never had to make a claim!)
4. As it's a flat, do you have consent to let from the freeholder (assuming it's leasehold)?
5. Even though you have an agent managing it, you would be well advised to read up on landlord responsibilities and legislation yourself. Check out landlordzone.co.uk. You might want to buy a book too. Give the agents a good grilling on how they deal with gas certificates, EPCs, maintenance etc to make sure they know what they are doing.

jenny74

vbt wrote: »

Hi,

I've just accepted a job abroad which will be for 1 to 3 years and which includes accommodation and bills, so I'm going to rent my flat out whilst we're away.

I'm a bit nervous because it will be the first time I've ever been a landlord. We've got a letting agent coming round to do a rental valuation next week and they charge £395 plus VAT as a tenant finders fee which includes all the credit checks and referencing etc, and then the same amount again if the tenants re-sign, There is no need for tenants to resign, they will automatically go onto a rolling contract after the initial 6 or 12 month period. This is just a money making scheme by the LA.or they find someone else to sign in the future. Fair enough

They've offered us management fees of 10%, or 12.5% a month including a rent guarantee (I think I'd feel safer with this option). They also do a property check every 3 months, This may not be legal, a tenant is entitled to the 'quiet enjoyment' of the property, after all it will be there homeand said that they would happily email me a copy of this each time.

Do these fees seem fair? We've heard good things about the letting agent, who are an independent estate agent, and I got a better impression of them than a major high street agent who wanted £650 plus VAT as a letting fee, but only £120 for a re-sign/renewal fee. Their management fees were the same too. They just didn't come across well to me at all when I spoke to them.

Also, do I have to file a tax return for this? We go away in July - do I need to register to do this, and if so, when?

My mortgage company, Nationwide, said it wouldn't affect my mortgage, but that I have to fill in a form informing them, which they're sending me out today.

Lastly; is this likely to affect my contents insurance (we're renting the flat out furnished, but without the TV/stereo etc)? You need to inform your insurer, they may impose terms, or refuse cover.

Is there anything else I need to think about? Any advice gratefully received; it's all a bit overwhelming at the moment!

Thanks!

Hope this helps

Gorgeous_George

The fees sound like a rip-off but in line with most other agents. They make far more from your property than you will - how can that be fair?

How much do you expect to make from this deal? If it is less than 5% net I'd sell up.

GG

ET1976

They also do a property check every 3 months, This may not be legal, a tenant is entitled to the 'quiet enjoyment' of the property, after all it will be there home

This is true, however I think it would be fair to say most agents do these checks as standard (maybe not as often as every 3 months). They are either not aware that they have no right to do it, or just hope the tenant is not aware and doesn't refuse. Either way, your tenants can read up on their own rights and refuse the inspections.

missile

Gorgeous_George wrote: »

The fees sound like a rip-off but in line with most other agents. They make far more from your property than you will - how can that be fair?

How much do you expect to make from this deal? If it is less than 5% net I'd sell up.

GG

Sound advice. IMHO, if less than 7% it is not worth the hassle. However you may wish to keep your flat or a foot on the property ladder?

Have you thought about if and when you visit UK, where you would stay?

Jowo_2

This is what you should look for in an agent

http://www.landlordzone.co.uk/agents.htm

missile

Even with a good agent, most tennants will not look after your property as you might expect, prepare yourself for the inevitable heartache.

Jac_Raven

ET1976 wrote: »

They also do a property check every 3 months, This may not be legal, a tenant is entitled to the 'quiet enjoyment' of the property, after all it will be there home

This is true, however I think it would be fair to say most agents do these checks as standard (maybe not as often as every 3 months). They are either not aware that they have no right to do it, or just hope the tenant is not aware and doesn't refuse. Either way, your tenants can read up on their own rights and refuse the inspections.

If you are a landlord and a tenant refused either yourself or your agent access for inspection purposes, having been given reasonable notice would you not worry about the state of the flat and probably look to serve notice to vacate as soon as possible?

quiet enjoyment is one thing, but surely once every quarter would not count as breaching that?

ET1976

Yes I would feel exactly as you described. Even if there was nothing wrong with the state of the place I would feel the LL-T relationship was not what it should be. But it doesn't change the law.

If I were a tenant, I would find once a quarter intrusive. Once a year would be OK I think.

00ec25

vbt wrote: »

Also, do I have to file a tax return for this? We go away in July - do I need to register to do this, and if so, when?

you need to sort out your tax position with HMRC in more ways than just the rent, read the guidance below
1. are you going to be fully non residence status for tax purposes (how does your employer pay your salary: still within the UK or from local within country?)
2. subject to 1 above, you need to agree with HMRC if you want a dispensation from the Non Resident Landlords Scheme or if your agent is going to make the tax deductions for you http://www.hmrc.gov.uk/CNR/nr_landlords.htm