Renting out a property...

LisaLou1982

Im hoping that some of the professional landlords might be able to help me.....

We've had a really good offer accepted on a house but as yet have had no firm interest in mine so am thinking about renting it out for the time being.

No problems re consent to let etc, and theres room to manouvre with the cost of mortgage vs rent but ideally id like the peace of mind of guaranteed rent.

Has anyone used and claimed on rental insurance and can you give me an insight into how it works? Is it like mortgage protection where it doesnt pay out for X amount of weeks and you can only claim X amount of times within 12 months?

Ive seen the guaranteed rental scheme through Northwood lettings. Has anyone had any experience of them? The previous posts on this forum are 2yrs old so im hoping for something a little more upto date if possible.

Thanks in advance

HxBro

I've just had a meeting with a northwood letting agent, the guaranteed rental scheme works out like this, some numbers are rough, and the first lot of figures are amounts that I'd pay to a "generic" agent

Market property at £690/month
9% commission is £62 + VAT = £73

Which gives me £617 x 12 months = £7404

Now there's a setup fee with the agent each time someone lets, apparently the average is 9 months per tenant so you could be looking at 2 setup fees over 12 months, however he calculated it on 1 setup fee for that 12 months so:

Setup fee £180 + VAT = £211

Which leaves £7193 for me

Now assume there might be a "void" period where you have no tenant, lets assume 6 weeks, £1035 this would then leave

£6158 for me.

He then took an amount (I missed what he typed into his calculator) and came up with

£6325 - made up of 1 month @ £275, followed by 11 months at £550
£6325 - this would be the guaranteed rent for 12 months, tenant or no tenant.

So whilst you are getting less than you could get, you might be getting more, especially if you don't have a tenant, you also have the security of potential non-paying tenants that take months to get evicted (he did a time line between non-payment one month, to putting the case in front of a judge to finally getting them evicted - all this time with no rent, came out around 6 months) - These were his words - I expect this to be possibly a scare sell tactic, and it won't be quite that long ?

You get paid 14 days from when they get a tenant, or it starts on day 25 and you get paid on day 39. You can however start the contract quickly and move out without having to deal with waiting for a tenant to be found, knowing that you will get something at some point.

Veda

Be careful, they have so many get-out clauses, they make sure they never lose out. Also when you finally want to terminate your agreement with them, they deliberately delay serving notice on their tenant so they get an extra months rent and they calculate what they owe you on a daily basis so you get even less, thus increasing their proffit.
Also they tend to use cheap cowboy labour to fix things when they go wrong, leaving you with the mess to clear up when you want your property back.
Avoid if possible, better off losing a month or two's rent than leaving your property in Northwood's hands.

sharkie

How much would you get from a council/Housing association?

Be careful regarding boiler, electrics, dampness and plumbing problems that some houses acquire a few months of tenancy. Some LA's give jobs to their 'preferred' company (not always the cheapest) and then they may also take a commission too.

LeaseHold property? Some councils repossess if the tenant does not pay service changes.

I have thought never heard of Northwood lettings, just incse you think there are any implications.

mynameisdave

I've heard of Northwood but never had any dealings with them so can't help you on that. I looked at the schemes when I got my flat but decided against it in the end. If you can find a good agent and the property is competatively priced then that should minimise void periods anyway.

LisaLou1982

Thanks everyone - i had a meeting with Northwood and decided that it wasnt for me. The guaranteed rental scheme seemed, in my opinion, to only be worth it to someone who was completely scared about renting a property out and needed hand holding the entire way through. That, or it would be of benefit to someone that was out of the country for x amount of time and would benefit from having no worries whilst they were away.

Good news though, i had an offer accepted on my house last week so am now able to go ahead without the hassle of renting mine out

Thanks for everyones help x