Am i Naive? Rentings easy isn't it!

riverboat2001

I have a flat that i plan to sell to clear off my mortgage (on my current home) and leave me/us mortgage free.

Long story but Mum currently lives there rent free, but will be leaving there in about 18months.

All my friends reckon i'm mad as i could easily rent it out for about £1000 per month.
They all seem to think you just find a tenant and plonk them in, and you're done!
Or you just "rent it to a Housing Association" who guarentee your income for up to two years and then deal with any "problems" that pop up and redecorate it all at the end, (before they hand it back to you)

Having read these fourms a bit i think my friends are very ill-informed. surely it can't be that easy?

The flat is about an hours drive from where i live and i have no DIY skills to repair or fix anything that gets broken.

I had made the decision to sell up and be done with it, but the thought has been planted, i don't think for a second that managing it myself would be easy in the slightest, am i right?

sharpy2010

riverboat2001 wrote: »

i don't think for a second that managing it myself would be easy in the slightest, am i right?

I think this is one of those things that SHOULD be easy, but thanks to all the red tape that landlords have to go through in the UK, basically jumping through MANY hoops, it appears that its very difficult to get into the renting game.

My mate lives in a rented flat, a self contained room within a house. He said that his landlord (who owns 7 or 8 rentable properties) said that if he was to start over his landlording career now, he wouldn't bother.

Too difficult, too much trouble, too much red tape.

I think it says a lot that an experienced landlord says that.

J_i_m

Sounds to me that you already don't have the time, and don't want the hassle.

Stick to your selling plan.

corbyboy

sharpy2010 wrote: »

I think this is one of those things that SHOULD be easy, but thanks to all the red tape that landlords have to go through in the UK, basically jumping through MANY hoops, it appears that its very difficult to get into the renting game.

My mate lives in a rented flat, a self contained room within a house. He said that his landlord (who owns 7 or 8 rentable properties) said that if he was to start over his landlording career now, he wouldn't bother.

Too difficult, too much trouble, too much red tape.

I think it says a lot that an experienced landlord says that.

What red tape are you talking about? You need a gas safety certificate, a contract and preferably a signed inventory. Then you need to submit a tax return each year. Where's the difficulty in that?

How much work do you think you should have to put in to get somebody else to pay your mortgage?

Thrugelmir

riverboat2001 wrote: »

They all seem to think you just find a tenant and plonk them in, and you're done!

Property letting is a business like any other.

With huge reward comes the downside of risk.

Are your friends ones that compare the return on savings accounts to property rental yields?

discplayer

corbyboy wrote: »

What red tape are you talking about? You need a gas safety certificate, a contract and preferably a signed inventory. Then you need to submit a tax return each year. Where's the difficulty in that?

How much work do you think you should have to put in to get somebody else to pay your mortgage?

I agree.

Finding and checking tenants then dealing with any problems (upstairs neighbour's leaks every few months) are far more of a pain than the gas safety check (I'd get a boiler serviced anyway), a contract and an inventory (despite what agents charge).

I actually think the deposit rules are more hassle for good tenants than good landlords - if they need their money back quickly they're stuffed all because too many landlords messed with too many tenants.

HAMISH_MCTAVISH

riverboat2001 wrote: »

Having read these fourms a bit i think my friends are very ill-informed. surely it can't be that easy?

These forums by definition attract people looking for advice because things have gone wrong.

If you read the bankruptcy board, and assumed that the posters there were an accurate representation of the whole of society, you'd have an incredibly warped and twisted view of things.

The same thing applies here.

This is not an accurate view of the whole of the rental market, it's an accurate view of the tiny minority who have problems.

The vast majority of renters and landlords are decent people, and the vast majority of transactions in the rental market proceed smoothly.

That is reality.

Sure, you can have an occasional bad tenant, and most landlords will have to deal with a maintenance issue in the middle of the night at some point in their career, but a good lettings agency can handle maintenance and tenant recruitment, and careful tenant vetting will greatly reduce the chances of a problem.

Nothing in life is risk free, but you'd have to be very unlucky or a bit negligent to run into problems on a regular basis.

And good insurance will cover most of the ones that do occur.

Being a landlord isn't for everyone, but it isn't nearly as hard as some on here like to portray either....

jungle_jane

being a landlord is a bit of a hassle when you need new tenants or when maintenance is required. We live 45 mins from our rental property and at times we grumble and say we should sell it. But its paying itself off nicely, the market isn't strong enough now to sell and for the vast majority of the time its something we forget about because we don't hear much from the tenant.

Getting the landlord insurance / certificates / boiler service etc is a small price to pay for someone else paying the mortgage.

The key has been finding good tenants, which is quite hard. I tend to only take people that come across well, that seem to have similar values to myself and who really love the place when they see it. So far it's been a bit of a hassle but totally worth it....

Thrugelmir

HAMISH_MCTAVISH wrote: »

This is not an accurate view of the whole of the rental market, it's an accurate view of the tiny minority who have problems.

The vast majority of renters and landlords are decent people, and the vast majority of transactions in the rental market proceed smoothly.

That is reality.

Though recent reports have highlighted a noticable trend.

The number of tenants in England and Wales in severe rental arrears rose 13% in Q2 2011 to 74,492, as evictions increased 9% over the same period.

Research from Templeton LPA has shown that the numbers of tenants facing eviction notices increased to 24,170 in the second quarter, as most landlords are acting quicker. This coincides with rents hitting record heights recently.

Whilst tenant arrears were up 4% on Q1, tenancies in severe arrears represent just 2.1% of all properties in the private rental sector in England and Wales.

However, the arrears have not yet filtered through to buy-to-let mortgage arrears, partly because of landlords acting quicker to take action against non-paying tenants. Figures showed that buy-to-let mortgages which are in more than three months in arrears fell 8% to 29,400 in Q2 compared to the previous quarter and were 12% down over the past year.

Nevertheless, it is noticed that there are nearly three times as many buy-to-let mortgages in severe arrears compared to three years ago.

http://www.helpland.co.uk/blog/91/Landlords-Act-Quicker-as-Rent-Arrears-Rise.--/

Werdnal

There are Lanlords and there are GOOD Landlords! Read some of the threads here by desperate tenants who have been royally sh**fted by dodgy landlords and you will see how many of them are just like your friends who advise you to find a tenant, plonk them in and rake in the rent - WRONG!

Seriously, it can be relatively easy and trouble free, but you must do your homework first.

To start with, you have a mortgage? Is this BTL or residential? If the latter, you will need to apply to the lender for Consent to let (CTL), and if they refuse, you will then need to change to a BTL agreement, which will cost you more. Is it Leasehold? If so, letting your mum live there may have been acceptable, but you need to check your lease to see if you can actually let it - some leases specifically prohibit letting and there is little you can do to change that.

Then insurance will need to be changed to Landlord cover, at the very least buildings insurance, but you may need more cover if you are letting it furnished.

Gas safety certificate is an annual requirement for any gas appliances, and if you are leaving electrical items, a PAT test annually, although no compulsory, is wise.

Then you advertise for your tenants, credit check and reference them, draw up a thorough and legally binding tenancy agreement for them to sign, and make a full inventory of everything in the property, including the carpets, curtains etc, and the decore and condition of each room, for the tenants to accept the condition of the property at the start of their tenancy. You then take a deposit and protect it in a government scheme.

You will also need to keep a contingency fund for repairs and other unforeseen problems (gaps in letting when you need to cover the mortgage, missing rent etc), and complete an annual tax return for your rental income. Also remember that managing it yourself means you could get a phone call at 2.00am saying tenant has a burst pipe - this sort of hassle goes with the territory so you need to take the rough with the smooth!

Probably the most important aspect to learn is how to issue notice to your tenants. This must be done legally to be valid, and even then, they may choose to ignore it and force you to take court action for eviction.

I would advise you to read, learn and inwardly digest everything you can about letting and your legal obligations as a landlord. This forum is a good start point, but there are others like Landlordzone, which is specifically for landlords and has some very good legally qualified members who can advise on specific problems.

It can be easy, if you do your homework and take it seriously.

HAMISH_MCTAVISH

Thrugelmir wrote: »

Though recent reports have highlighted a noticable trend.

Yes, good to see that exactly as I mentioned, the numbers involved are incredibly tiny.

That article doesn't specify whether those arrears are total rental market, or private tenants only.

But either way it's between just 1% and 3% of all tenants in arrears.

Which leaves between 97% and 99% of all transactions in the rental market going along just fine.