Thinking about letting

Phils_debt

Hi all pretty new to this forum so please be patient .

Hi me and the wife currently have a mortgage albiet a small one on a council estate currently paying £240 a month,our neighbours rent and pay around £450-500 a month .
I cant really stand it here its a terraced house so we hear everything including music sometimes till late.
I thought about selling but need to clear some debts first then we have thought about letting as we have seen a 4 bed detached house in a new area either to buy or rent its £235k to buy way out of our league or £700 to rent which we could afford and be able to bring our two young children up in a decent area.
My question is i have never rented or let a house so is it easy to do and what do i do about my neighbours do i tell the new tenants they like to play loud music or like to argue also do i have to change my mortgage for letting

Many thanks
Also is it worth renting a place when i own my house(mortgage)

Yorkie1

There are lots of things you will need to get up to speed on but the first things you need to decide are whether you are prepared to detach yourself emotionally from the house (i.e. forget that it was your pride and joy), and whether you will have enough financial reserves if something unexpected happens e.g. tenant doesn't pay the rent and takes 6 months to evict, or the boiler breaks and needs replacing at a cost of £3K.

You will need to ask your lender for consent to let on your mortgage, as it's a breach of your mortgage conditions to let someone else live there without this. Your lender may give consent for a small fee, or raise the interest rates, or refuse and make you take out a buy to let mortgage. That will depend on your individual lender, and how much loan to value you have (how much is owing compared to the valuation of the house).

Then there are lots of legal things like gas safety certificates, being satisfied that the electrics are safe, an Energy Performance Certificate, just for starters.

Another poster on here provides a link to a really useful thread but I can't put my fingers on it right now. Hopefully someone else will.

Finally, join a landlords association. They will provide individual advice and hopefully prevent you getting yourself into trouble with an experienced tenant who sees you coming from a long way off (no insult intended).

Phils_debt

Thanks sounds quite complicated and time consuming getting the house ready before tenants

Werdnal

Ask your lender first, as if they refuse permission, you are scuppered before you start. You will also need insurance specifically for a letting property as normal household insurance will not apply.

You will then need to advertise, find your tenant, credit check/reference them, take and secure a deposit in a govenment scheme, draw up a legally binding tenancy agreement and inventory for the property, ensure your are up to date with Gas Safety Regs. All this is do-able on a DIY basis, or you can employ an agent to do it for you - for a fee of course.

Then remember that rental income is taxable, so not pure profit. You will also need a contingency for repairs to the property you let, and to cover lost rent and damage if your tenant does a flit - it happens.

I often feel using rental income to secure another home for you to live in is a big risk, as if the income dries up, how will you cover the costs on your home. So long as you feel the figures add up, then its your risk to take.

You will also obviously have to find and rent a place for yourself - probably paying fees for referencing/credit checks for yourself, a month's rent in advance and a hefty deposit, possibly before you have a tenant for the place you are letting - so you could be out of pocket before you start getting any rent!

G_M

This is what you need....

woodsey2002

With regards to the property you are looking to rent, are they advertising the property to rent as they haven't been able to sell it?
Having had terrible luck with the properties we have rented, 3 in 2 years I would advise caution in renting from an accidental landlord.
By the sound of things you'd like to move to this property as it gives you the opportunity to raise your kids in a nicer area so I'm guessing you'd be looking at staying there for quite some time but how secure would you be? There would be nothing stopping your landlord deciding in 6 months time to try and sell the property again and you will be left with the prospect of having to move again.
Just something to think about.

Yorkie1

G_M wrote: »

This is what you need....

That's what I was thinking of / referring to!

Phils_debt

woodsey2002 wrote: »

With regards to the property you are looking to rent, are they advertising the property to rent as they haven't been able to sell it?
Having had terrible luck with the properties we have rented, 3 in 2 years I would advise caution in renting from an accidental landlord.
By the sound of things you'd like to move to this property as it gives you the opportunity to raise your kids in a nicer area so I'm guessing you'd be looking at staying there for quite some time but how secure would you be? There would be nothing stopping your landlord deciding in 6 months time to try and sell the property again and you will be left with the prospect of having to move again.
Just something to think about.

When i first rang the estate agent i asked this very question stating i am interested in renting it but was concerned if they was to sell it within the 6 months and have people looking while we were living there and were they just letting it while they got potential buyers while we pay the mortgage for them .
The estate agent listened to my concerns and said they would ring them to see if they were happy to rent it for possibly a 12 month contract but she didnt ring them cause i rang her the next day and said she hadnt spoke to them

G_M

Phils_debt wrote: »

When i first rang the estate agent i asked this very question stating i am interested in renting it but was concerned if they was to sell it within the 6 months and have people looking while we were living there and were they just letting it while they got potential buyers while we pay the mortgage for them .
The estate agent listened to my concerns and said they would ring them to see if they were happy to rent it for possibly a 12 month contract but she didnt ring them cause i rang her the next day and said she hadnt spoke to them

1) You can't rely on what the agent or LL tells you. The LL may lie to get the property rented out, or may change his mind. A 12 month contract gives you security for that period (but also ties you in which could be bad if you want to leave).

2) the agent/LL cannot insist on showing epople round during your tenancy, either potential buyers or new prospective tenants. It is your home for the duration of the contract, and YOU decide who can come in and when.

If you are considering becoming a landlord yourself, you must get an understanding of tenancy law before you start.