Buy to Let or not Buy to Let..?

J_and_A

Hi

We are currently in the position of having a house for sale but lack of viewings means selling is unlikely in the near future. We don't live in the house and are considering renting it so that we can continue to make the mortgage payments on it.

The mortgage on the property is currently interest only. Do we have to change this to a Buy to Let mortgage or can we carry on with the existing arrangement?

Also, are we obliged to inform the mortgage company that we no longer reside in the property and that we are considering renting it out?

All advice gratefully received.

Many thanks.

harpoboy

Who is your mortgage with?

You may just need a Consent to Let from the lender, which might only be a few hundred pounds.

Why not ring them to discuss your options?

somethingcorporate

You will need permission of the lender to rent out the property or you will be in breach of your mortgage conditions. Depending on the lender they may allow consent to let for a limited period (2-3 years) and may charge a fee or increase your rate as a result.

You need to check that your home insurance is still valid with you not being in the property, many buildings / contents policies require you to have someone being in the property regularly otherwise you will not be covered.

Are you sure you want to be a landlord? it's a lot of work, stressful and is not a quick fix to what is a long term problem. You may be better off knocking some money off your house for a quicker sale. Talk to a number of estate agents and see what they think you can do to shift your house quicker, it may be a preferable route than becoming a professional landlord which has a number of financial and legal ramifications associated with it so needs lots of research before being entered in to.

J_and_A

Thanks. The mortgage is with the Halifax. We'd much rather sell but may have to rent. Thought we'd gather some advice before tackling the lender...

harpoboy

somethingcorporate wrote: »

Are you sure you want to be a landlord? it's a lot of work, stressful and is not a quick fix to what is a long term problem.

Not in my experience. If you treat tenants with respect, this will usually be reciprocated.

Yes, you need to obtain Consent to Let and Landlords insurance but that should be fairly easy to do.

G_M has posted a number of threads about Landlord's responsibilities. It is worth reading this and doing a bit of research before taking the plunge.

Good luck, and post here again if you have any more questions

Thrugelmir

J_and_A wrote: »

We'd much rather sell but may have to rent.

Do you want the responsibility of being a landlord?

What are your longer term plans for the property?

Will reducing the price of the property induce more viewings?

What are your plans for repaying the mortgage?

Worth weighing up when coming to your decision.

kidmugsy

You may have to spend a bit of money getting the gas and electrics up to snuff. At the least, you'll have to pay to have them inspected.

smerch1468

harpoboy wrote: »

Not in my experience. If you treat tenants with respect, this will usually be reciprocated.

Yes, you need to obtain Consent to Let and Landlords insurance but that should be fairly easy to do.

G_M has posted a number of threads about Landlord's responsibilities. It is worth reading this and doing a bit of research before taking the plunge.

Good luck, and post here again if you have any more questions

Totally agree. Its financial and tenant specific. If you can get a bit of income from the tenancy then that will help cover your rental costs. I had a consent to let from BOI and they kept the same rate. There was a charge but it was only a few hundred pounds.

Now I am planning to buy my ex out and get a buy to let mortgage the figs are soo good that I will clear quite a few hundred quid after expenses/tax.

I have a lettings agent, landlords house insurance, boiler cover and tax liabilities to deal with. Not a difficult job. My tenants will be paying my mortgage off which isn't a bad thing.

Thrugelmir

harpoboy wrote: »

Not in my experience. If you treat tenants with respect, this will usually be reciprocated.

Letting property is a business. Bad debts, bad customers are very much part of running any business. There are some clever rogues out there. Who will have no hesitation in exploiting a weakness or lack of knowledge. So one should always be prepared.

marathonic

smerch1468 wrote: »

I have a lettings agent, landlords house insurance, boiler cover and tax liabilities to deal with. Not a difficult job. My tenants will be paying my mortgage off which isn't a bad thing.

When a boiler breaks down, a lot of times, it can be sub-£150 fixes required. A lot of the boiler insurance companies charge £10 per month and a £50 excess.

If you have your own property and a rental property, you are paying towards this for two houses. You'd need your £50 excess as well as £240 per year towards the cover.

In my opinion, you are much better to open up a regular savings account and self-insure.

For example, if you opened a First Direct bank account and avail of their £100 sign-up bonus, you could put this, together with your £50 excess money and £20 per month insurance cost into their regular savings account.

By doing the above, you don't need to worry about any of the nasty terms and conditions that may exist on a boiler insurance policy - such as the inability to insure the boiler when it exceeds a certain number of years age.

Yorkie1

marathonic wrote: »

For example, if you opened a First Direct bank account and avail of their £100 sign-up bonus, you could put this, together with your £50 excess money and £20 per month insurance cost into their regular savings account.

Specifically relating to this account, be aware that no withdrawals are permitted during the 12 month term, unless the account is closed - you won't get the higher rate of interest either if you close early.