Letting house out..(long)

80schild

After being dead against it at first-having talked about it with family and the mortgage advisor my husband and I are now seriously considering remortgaging on a BTL mortgage and letting the house to enable us to relocate.
We have 58k left on the current mortgage and the mortgage advisor said that she has two valuations on our house at 90k(she was acting for our BTL buyer who has gone AWOL). She said we could borrrow 65k on the house and use the 7k for emergencies and paying the mortgage when its empty. I think I would prefer to remortgage at 60k and borrow 7k from parents though.
We are in an area with high rental demand (hence the amount of BTL buyers around waiting to swoop and buy BMV houses). The house is in good condition but obviously I am aware we need stuff like safety checks done and boiler servicing and a few odd jobs doing!
So a few questions:
1.firstly do the above figures look do-able-looking at our income and outgoings we could manage the mortgage payments when its empty without dipping into the emergency fund.
2. Presumably we pay council tax when there is no tennent but how does it work when someone rents it off us.
3. What about the water bill?
4.Gas and Elec-presuming we would get these disconnected when we move out and reconnected when someone moves in but I would probably want a meter installing as this is what most of the landlords around here do!

poppysarah

80schild wrote: »

mortgage advisor said that she has two valuations on our house at 90k(she was acting for our BTL buyer who has gone AWOL)!

Eh?

If you want to sell (Much less stress in the long run,) then get 3 EA to view and give you a price to sell.

People acting for other people are NOT doing anything good for you.

anselld

Have you enquired about getting permission to let from your current mortgage co. This will probably significantly cheaper than remortgage?

1. Depends what rental income you could get.
2. Most councils allow exemption up to 6 months if empty and unfurnished
3. If empty unfurnished no need to pay. If tenanted tenant will pay.
4. Move onto no-standing charge tarrif - only pay what you use. If tenanted tenant will pay.

The_Drama_Llama

Definitely avoid moving onto a meter for gas/electricity. I'm assuming here you mean a key meter? The cost of fuel is much higher this way, and getting a key meter removed is a nightmare so will affect the value when you do want to sell.

Also bear in mind that this course of action actually increases your debt massively. As PoppySarah says, you may well be better off in the long run trying harder to sell now. There are enough threads on here detailing nightmare situations for both landlords and tenants to make people realise that letting out property isn't as simple as it may first appear.

BitterAndTwisted

80schild wrote: »

1.firstly do the above figures look do-able-looking at our income and outgoings we could manage the mortgage payments when its empty without dipping into the emergency fund. Only you know what your incomes can support. You would be advsied to have a decent sum set aside for the unthinkable. Like tenants in situ who stop paying the rent, it takes you six months to evict and meanwhile they trash the place.
2. Presumably we pay council tax when there is no tenant but how does it work when someone rents it off us. You inform the Local Authority when a tenant moves in and they will open anew account for your tenants, which they should pay themselves.
3. What about the water bill? Take a meter reading when your tenants move in. You should also take meter-readings whenever you have a tenant move out as well.
4.Gas and Elec-presuming we would get these disconnected when we move out and reconnected when someone moves in but I would probably want a meter installing as this is what most of the landlords around here do!

There is no necessity to have the supplies disconnected. You just need to take a meter-reading and phone that through to the supplier and ask them for a final bill. Your tenants should arrange for a new account to be set up. Having pre-pay meters (which I think is what you're referring to) can discourage a lot of tenants as this is the most expensive way to pay for utilities. I wouldn't want them. If your prospective new tenants have poor credit or have left unpaid bills behind the utility companies could insist on taking a deposit but that's not your problem. You are not liable for any utility or CTax bills which a tenant runs up in your property as long as the accounts are not in your names.

Don't forget to acquire proper landlords insurance and please, please please join a landlords association.

80schild

poppysarah wrote: »

Eh?

If you want to sell (Much less stress in the long run,) then get 3 EA to view and give you a price to sell.

People acting for other people are NOT doing anything good for you.

The mortgage advisor was doing the buy to let mortgage application for our previous buyer. She also did the mortgage application on our purchase house. She gave us this information about the house being valued at 90k as we were considering selling for 50k to a cash for property company!

80schild

The_Drama_Llama wrote: »

Definitely avoid moving onto a meter for gas/electricity. I'm assuming here you mean a key meter? The cost of fuel is much higher this way, and getting a key meter removed is a nightmare so will affect the value when you do want to sell..

I would rather not have a meter put in but thought it was what you had to do as a landlord! Most of my friends are in rental properties and complain how expensive meters are-I think this is very unfair and would rather avoid this route if possible!

The_Drama_Llama

I haven't had metered utilities since my student bedsit days (20 years ago now). Really, it isn't necessary.

I second B&Ts recommendation to join a Landlord's Association - letting out property is a minefield and you need to be well versed in the law and your obligations to your tenant. Whatever you do, don't rely on a Letting Agent to know anything - anyone can set themselves up as an LA, there is absolutely no regulation, and many are less than clueless.

80schild

The_Drama_Llama wrote: »

I haven't had metered utilities since my student bedsit days (20 years ago now). Really, it isn't necessary.

I second B&Ts recommendation to join a Landlord's Association - letting out property is a minefield and you need to be well versed in the law and your obligations to your tenant. Whatever you do, don't rely on a Letting Agent to know anything - anyone can set themselves up as an LA, there is absolutely no regulation, and many are less than clueless.

If we go ahead will defintely be joining an association and also taking out good insurance! We will be using a letting agency but will make sure we are well informed-been reading up on laws and requirements already.

G_M

80schild wrote: »

If we go ahead will defintely be joining an association and also taking out good insurance! We will be using a letting agency but will make sure we are well informed-been reading up on laws and requirements already.

Don't select an agent on price, research them carefully.
Choose one that's a member of ARLA or similar, and has a clear complaints process/code of practice.
Read their terms and conditions, including how to end the arrangement, carefully.
Ensure you undertstand what you expect them to do, and what the limits of their responsibility is.
Get opinion from existing landlords on their books - if they won't give you names, be careful!
Find out how they threat tenants too - tenants who are p*ssed off by the agent will take it out on the property/landlord, so send a friend in posing as a prospective tenant.

edit: just seen my typo above: yes some agents do that to tenants too!

sequence

G_M wrote: »

Find out how they threat tenants too - tenants who are p*ssed off by the agent will take it out on the property/landlord, so send a friend in posing as a prospective tenant.

Very fitting :cool: