Renting out - things to consider please

veryintrigued

Hi all

Some advice please.

Currently my partner and I tend to stop each night at each others houses. We have spent the last few months sorting stuff out for hopefully a move in together.

Hence we are considering renting out one the houses in the first instance to hopefully be certain that things work out.

Therefore we are in the first steps in researching this renting out option. One of the houses has a mortgage of circa £70k and the other has just of £100 remaining. Both houses are fully furnished (its just rubbish we have thrown out/ sold not duplicate items)

So where to start? Lots of reading on the internet and lots of 'tenants from Hell' and 'landlords from Hell' threads on here!!

Initially we're not in it to make money (although clearly that would be great) - more to make sure we can live together full time under the same roof.
So any advice, things to consider or articles at this initial stage would be much obliged - from the legalities, whether to do it directly, insurance cover etc etc.

I realise this is a little vague but thanks in advance.

BitterAndTwisted

If you commit to renting you absolutely must join a landlords association. The cost of membership can be offset against the rental-income for tax purposes and there are various benefits like lawful and sensible rental-agreements for download and legal advice available to members.

Do your research about what the market rents are for similar properties in your area so you know where to pitch your property's rent.

Be aware that the rental-income less certain allowable expenses need to be declared on your tax-return even if you're not making a profit every month.

Bear in mind that the minimum term for a rental is six months before you can legally evict, so should your circumstances change radically overnight you won't necessarily be able to move back into the property at a moment's notice.

You should be aware of the laws about tenant deposit-protection and the need to have a full and accurate inventory done at the beginning of each tenancy.

As there are some "professional tenants" out there who can spot a rookie at fifty paces you should seriously consider appointing a letting-agent to manage the property on your behalf until you know the ropes. Please note that should you appoint an agent they will be absolutely no protection should something go wrong with the tenancy. In law, the final responsibility always falls to the landlord. Insist on an agent taking out credit-checks on prospective tenants and ask to see them yourself. Friends of mine are renting their property through an extremely well-known agent and they didn't carry out any at all. The tenant is now in very serious rent-arrears.

Have a good, long read of the LandlordZone website and visit the forum. There's heaps of good advice and guidance to be had before you take the plunge should you decide to go ahead.

Once you have tenants in your property you should try and emotionally detach yourself from it: it is then your tenant's home and purely your investment thereafter.

veryintrigued

Bitter and twisted - some great information there. Thats us sorted for things to properly research for the next few weeks.

Thanks again for taking the time to reply

hollydays

I would like to add a note about agents.
I rent out a property.When the last tenant moved out,they gave me as a referee.
The agent or their representative, rang me for a quick reference,about rent payment etc,quite frankly,I could have been anyone,and they did not put anything in writing. If i ever use an agent,I will want to know exactly how they carry out their checks.

G_M

This post will give you a good source, and hours of useful research!

SuzieSue

You should rent out the property with the mortage so that you can get tax relief on the interest payments. However, you will either need to get permission from your lender (consent to let) or they might make you change to a buy to let mortgage which will usually be more expensive.

If they won't give you consent to let then the best thing to do would be to remortgage the property you are living in and pay off the mortgage on the other property you are letting. You will still be able to claim tax relief on the interest payments up to £70k eventhough the mortage is on the property you live in.

However, please note that I am not a tax expert and you should take legal and tax advice before doing anything.

tbs624

BitterAndTwisted wrote: »

If you commit to renting you absolutely must join a landlords association....

"absolutely must" is over-egging the pudding IMO. It can be useful to sign up to a local or national LL association but many LLs manage to be well-prepared and successful without ever joining up. The key thing is obviously to do your research well in advance. You may, as an alternative, wish to sign up to Tessa Shepperson's LL Law, and also go and trawl through Shelter's excellent webpages so that you have a clear picture of both LL& T rights and obligations. the local Council may run accreditation courses and training sessions for newbie LLs - check via the private sector housing officer.

BitterAndTwisted wrote: »

As there are some "professional tenants" out there who can spot a rookie at fifty paces you should seriously consider appointing a letting-agent to manage the property on your behalf until you know the ropes.

It has to be said - yet again- there is no requirement for anyone who sets themselves up in business as an LA to have had even a basic training for the role, to have attended any course or passed any exam or be in possession of a certain level of knowledge. Yet there they are, handling thousands of quids' worth of other folks' money and property. Many of them have a poor grasp of even the basics tenets of LL& T law and are unlikely to be able to show anyone "the ropes". It can be a case of the blind leading the blind and the LL gets to pay for the "privilege" of using the LA's "services".

veryintrigued

Some cracking advice here - appreciate you getting back to me.

Lots more digging now!!