Letting Property - No Idea What I'm Doing

C22DTJ

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Mr_Moo_2

Congratulations on the most honest thread title for a long time

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

G_M

New Landlords (information for new or prospective landlords)

Letting Agents (Tips for selecting, and tips for sacking them)

lvm

Tax is paid after mortgage INTEREST is deducted. Not the full amount.

Other costs will apply too - insurance, gas safety check to name a couple!

C22DTJ

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donfanatico

C22DTJ wrote: »

Ok thanks all.

I'm struggling to figure out whether we'll break even. Is there a calculator anywhere?

We pay 2.6% interest on a balance of about £120K. As I said, mortgage is 495, LA fees ~£100, B+C Insurance ~ £25, rental income = £700.

Do you have permission to let from your lender? Fees and/or higher interest apply.

dimbo61

" His suggestion was that as it's been immaculately furnished and decorated, we should let for 6-12 months and sell after that."

He would say that as he will get some nice fat fees from you and the tenants.
You could get your property back in 6/12 months with the place wrecked and all the furniture gone!
Do you really want to start up in business together ? with you living in London ( renting)
She cannot move on and buy a new place and neither can you!
The property will never look this good again because tenants know they will only live in the property for a short length of time and it is not there HOME.
Please SELL and move on with your lives ( Only my views)

C22DTJ

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G_M

Letting for 6 months is pointless. If you use an agent that will eat up 1.5 to 2 + months rent. Other overheads will eat another month or two.

It will also eat your time, and give stress (even using and agent, or perhaps because.... see my link above)

A year is the minimum, and even that is borderline. Esp if you are unlucky and tenant 1 leaves after 6 months and you have a 2 month void before tenant 2 moves in.

Your 'immaculate home' will not be immaculate after 12months either, which will distress you if you move back in, and will make selling harder if you don't.

But. If you let for the longer term, you may well find the perfect tenant and produce a long-term, trouble-free income.

No one can say which way it will go, but you must be realistic about the possibilities.

C22DTJ

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clark24

In the case of my current landlady she was going to sell the cottage (she moved away for work, it had been her home), but decided as she didn't have to, and as prices in this area are going up at a good pace, that she would rent it out for a while then sell.

Cue first lot of tenants, paid deposit and first months rent...... 6 months later she hadn't seen another penny from them and they caused many many thousands of pounds worth of damage to the property (and sadly she hadn't taken out LL insurance), which meant if she were to try to sell she would have to drop the price drastically, plus it being a 200 yr old cottage and many of the destroyed things were original.....

Now there are good tenants and there are really awful tenants and you don't know which ones will have been living in your home. Her previous tenants passed credit checks, passed references, had good jobs, seemed perfect and yet they wrecked the place. Funnily enough we don't look as good on paper as they did but we've worked our bums off getting the place back to a decent standard (although some things were damaged beyond what we can repair).

If you want to sell in 6-12 months, then sell it now. In 6-12 months you may be faced with a huge repair bill and something you can't sell for a long time.