Thinking of renting out house.

Cece

Hi,

Nearly 6 years ago my fella and I bought our first house together, at the time it was brilliant, we were on the property ladder and had our own independence which was fantastic. However we would now like to move to a bigger house so that we can start a family.

We decided to get our house valued and was deeply disappointed that it is now worth less than what we owe on the mortgage.

We are therefore thinking of renting out our property and going to rent another property for ourselves (because we can't afford a new deposit on a house and to pay off what we will owe on the current house).

Do you think this is a good plan? If so any advice on where to start would be brilliant.

We don't want to get stuck in our current house as it is tiny and really we want to be moving forward in our lives.

Beckyy

Do you have a few details that you might be able to say... How much house is worth, how much outstanding mortgage is and it's interest rate, how much your monthly repayment is, how much your rent would be and your income(s).

Being a landlord isn't cheap and it's not just a case of finding someone who likes the house and getting money everything month. You will need permission from your mortgage company ('consent to let'). Insurance, Gas and energy Certificates, Agent fees if you use one, tax on the rent etc.

G_M

New Landlords (information for new or prospective landlords)

19lottie82

cece, it may seem like simple solution BUT it is likely to far from that, have you considered the following?

1) You will require consent to let from you lender. many require that you have 25% equity in your home AND that your rental income every month will exceed 125% of your mortgage payments.

2) you will have to pay tax on your rental income

3) what if your house lays empty for a month or two, your tennents don't pay rent (it can take 2 months before you can even APPLY for an eviciton notice), or they damage it..... can you afford to cover these costs on top of renting another property?

You are only just "thinking" of stating a family, so my advice to you would start throwing everything you can in to over paying your mortgage so you can build up some equity ASAP and hopefully, in a few years, be able to afford to sell and buy a family home.

Sadly, lots of people are in the same position as you and have no choice but to make do. You say you have a house, so I'm presuming at least 2 bedrooms? Even if it was a one bed, a baby doesn't need their own room to start with, or you and your OH could sleep in the lounge if it got to the point where you didn't want to share?

A baby won't remember anything for the first couple of years, let alone be traumatised at not having a big house.

Get over to the debt free wannabe board and complete a statement of affairs (SOA), the other posters over there are very helpfull and will advise how you can make cut backs so you ahve more £££ to throw at paying off your mortgage.

xtinataguba

hi cece, i agree with the three of them, i think you should better think about their advises to you. and besides you have your own house already, can't you just renovate it to make it more spacious for you and your family? make a garage sale, sell those things that are no longer in use. there's still a lot of things you can do to make your house more spacious, for me it is not a solution to leave your house just to rent for more spacious house.

Kynthia

Think seriously before doing this as being a LL can be a nightmare. You can't rely on a letting agent to handle everything as they aren't great and legally the buck stops with you. You'll needs consent to let, landlord insurance (your normal building insurance may be invalidated), gas safety cert, EPC, etc. You'll need to pay tax and your own rent won't be deductible. You'll need to maintain the property and pay for repairs. If you get an agent to find tenants and manage it they can cost a fortune. Then it can take up to 7 months to get rid of a non-paying tenant, could you afford this?

geoffky

What if your property falls even more? We have long long road to recovery..maybe decades ..

Cece

Thank you all for your replies, you have given me a lot to think about.