Taking the family travelling for a year. What about the house?

Shaff

Have taken the bold decision to take a 1 year career break and will take my family, (girlfriend, 3 and 1 yr old daughters) travelling for a a year starting with India and then venturing further east to Thailand and Indonesia while the kids are pre school age.(yikes!)

I want to rent out our family London home and live off what remains left (hence going to cheap countries). It will be a very tight budget of only £60 a day. But could do with some advice?

• Is it easy to rent out my home only for a year - ideally to a family - it's fully stocked as we wont need anything (kitchen equipment, bedding, books, stereo, TV etc etc) Should I leave all this to the tenants - it would be a nightmare and additional cost to move this into storage?
  
  • Are there schemes for people needing a home only for a year - like visiting foreign academics etc
• Do I switch my insurance from household insurance to a landlord insurance? Or can I keep it as just buildings insurance and not contents?
  
• Generally are mortgage companies OK with this or do they tend to get a bit fussy when people leave for a year. Should I even tell them or is this asking for trouble?
  
• What should I do with the car? I cant afford to carry on paying for it if not using it?
  
• Finally £60 a day for a a family of 4? Is this madness or can I budget to live OK and risk free.(we are travelling not holidaying). Are there any ways I can earn a bit on the go to supplement my income?

Anything I haven't thought of that I need to sort out?

Grateful for any advice!

Werdnal

There are many laws and regulations to abide by when becoming a landlord. Read this for starters:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

Being overseas, you will need someone in the UK to handle the let, manage repairs and maintenance, problems and deal with your tax liability on the rental income.

You need to ask your mortgage for consent to let - some agree, some add extra costs and clauses, some refuse.

You must change your insurance as they will only pay out of the place burns down if you are resident - not 1000's of miles away!

You will also need to ensure you have a good contingency of cash incase tenants stop paying and you still have to meet the mortgage payments. You cannot evict without a court order, even if tenant falls into arrears, and you will still have to pay the bills for several months whilst the court wheels grind slowly to get the tenant out.

Also, when the 12 months is up, the tenancy does not automatically end, and you will need to apply for court possession order if the tenants don't leave (they are quite legally able to stay on after the 12 month term until you formally evict them - maybe another 6 months on top). Where will you stay int he meantime?

gayleanne

I really think that you will need to do a lot more research, you obviously haven't a clue of the implications. The tenant can move in who will deal with the situation if they do not pay any rent after the first month? when you come back how can you guarantee that they will give back possession of the house? Is the £60.00 a day what you will be left with if the tenant pays the rent? If the tenant does not pay the rent will you still have £60.00 a day? As for the car if you are still paying for that, you cant just forget about it. I would sit down, and do a hell of a lot more research, if I was you, you can not swan off for a year, and expect everything to tick along behind you.

Shaff

Thank you Werdnal. That's all very scary!

Will Landlords insurance then cover these eventualities. If I go through a lettings agent presumably this is better than advertising privately?

Shaff

Thanks. I will be doing a lot more research and thought I would start with my learned peers on here a great source of both information and inspiration. I'm not going anywhere until i'm 100% certain its the right thing to do. The £60 is after rent is paid. If I thought about the absolute worst case scenario then, really what's the point of going, there will be some risk as there always is when renting, so it's a question of how I best mitigate.

Werdnal

Using a letting agent local to the property if you are overseas is a good start, and they can handle the tax on your rental income and be a contact for the tenants to report issues to. However, agents need no minimum qualfications to set up, and can be as ignorant of the rules and regs as you are - there is no governing body to cover them unless they choose to join one!

The agents cannot represent your legally, so any eviction through the courts in your absence, must be handles by an appointed legal representative or solicitor. Insurance and mortgage consent is down to you. You will need an EPC for the property (agents will arrange this at cost) and annual gas safety cert (again agents will charge you for this).

Then you need to agree how to handle repairs - will you allow agents to appoint someone, check with you beforehand, get your own tradespeople involved - all costs money and you are out of the country with no direct control!

Even with an agent, helping (or hindering) the landlord is ultimately responsible for the safety, finances and legal side of the letting arrangements, and if you do not feel confident or competent to take this responsibility, letting may not be for you.


The £60 is after rent is paid on the "current" mortgage payments. It is not unheard of for the mortgage lender to put up the premium, add admin and set-up costs etc to the existing deal to allow you to let it. If you are only going to come out with £60, what are you going to do if the heating packs up and tenant is on the phone to Environmental Health to get an enforcement order to make you repair it - you cannot ignore repairs and maintenance, and if you are only going to have £60 in your pocket every month (less what the tax man will take too - only mortgage interest is an allowance expense against your tax on rental income), you cannot afford to do this IMO!

Shaff

Sorry, to clarify I will have £60 per day to spend on travelling and will have up to £5000 savings left for house contingency ie repairs, things going wrong etc (but I presume Landlords insurance will cover rent not being paid etc??

My father, although retired will be OK to deal with any issues in my absence and I have a couple of trusted traders to deal with gas, electrics and maintenance..

agrinnall

Werndal, it's £60 a day, not a month. To be honest that sounds like pretty high net amount, even for London, that's £1800 a month after payment of the mortgage, agents fees, tax and miscellaneous expenses. Obviously we don't know what either current mortgage payments or future ones after obtaining CTL are, but it probably means a rental value in excess of £3000 per month, and possibly a lot more than that. While I know there are lots of places in London where rentals are that high, it sounds pretty risky.

googler

Why on earth would you want to take two pre-school children to the other side of the world for a year?

They won't appreciate it, they won't remember it. Why not wait until they're of an age when they'll appreciate it, and are at least old enough to take their own pictures of what they see?

When you can't get clean water or suitable baby food for younger one, what will you do then?

What if one of them falls ill? India isn't exactly renowned for having the cleanest water supply and sanitary system on earth... it's bad enough being on holiday with an adult with a dose of the runs, having a babe-in-arms in that state doesn't bear thinking about.

Werdnal

googler wrote: »

Why on earth would you want to take two pre-school children to the other side of the world for a year?

TBH I did wonder this too!


Sorry about my confusion over the £60 earlier, shouldn't speed read, although OP did reply in post 5 that "£60 is after rent" which confused me!

Shaff

I can get £2200 rent for my house, £1000 mortgage, plus I have another source of income amount to £600 a month = £60 a day travel money.

Reasons for going...
We have small holiday flat in Goa that we rent out, its safe and sanitary, has fresh filter water and a/c and is rent free so will start there for a couple of months. See what you think http://www.ownersdirect.co.uk/india/in327.htm It wont be a risky.

We will then then choose to stay in a few safe similar places for a few months at a time and day trip from there so wont be back packing in the bush so to speak. My children are half Indian (half Danish) so it will be their first trip of hopefully many as they discover and understand part of their heritage.

The reasons for going are mainly to spend quality time with the children, currently for me It's 12 hour working days (2 jobs) and a lot of stress, and they are growing up so quick and without as much time from their busy daddy as I would like. Our 3 year old is in nursery (a crippling cost, and the other one will be soon unless we go abroad) Quality time riding elephants and being outdoors will help strengthen the bond, plus I don't agree with taking them out of school once their formal education kicks in. It's a once in a life time opportunity, that I would like to take even if the children don't remember it, we as a family will benefit from it and they will have had more quality time from us.

The question is how do I make the changes for the better, when I return!