Renting my house out to move in with partner

captainmesh

Hi,
I'm new to MSE. Its taken me a while to even find out how to posta new thread....

Me and my partner are looking to buy a house together.
Her home has decent equity, which we will use as a deposit on the new home.
My property has zero equity.

Rather than simply selling my home and being no better off, I would like to rent it out (its in a prime DSS location).

Does anyone have any advice?

I figure, if I have nothing to gain adn nothign to lose, I may as well have a go at renting.....

Thansk in advance

marliepanda

You will need at least 25% equity no doubt to convert it to a BTL. You could ask for consent to let but that may incur a fee hike.

It also may not allow you to rent to tenants on housing benefits (which can cause it's own issues besides)

Make sure you are away of legal issues regarding tax and deposits. You are starting a business, not just getting your mortgage paid.

BitterAndTwisted

So, what you are bringing into the new purchase is not any actual assets to speak of but an ongoing liability plus a business risk as well?

Have you discussed a Deed of Trust between the two of you? In your partner's position I'd be demanding one.

captainmesh

Thanks for the feedback.
For the new purchase, although I'm bringing no equity, I'm committing to 75% of the new mortgage.
I clearly need some advise from a mortgage advisor before I go any further, I just wanted some outsider opinion first.

Thanks again.

captainmesh

I suppose the house to be rented (if approved), would be more fairly taken as a joint venture between my partner and I....I hadn't considered this..... "blinkered" i think is the phrase!

BitterAndTwisted

I won't be a "joint-venture" for tax-purposes as it's not in both of your names.

With an already existing mortgage, with no equity in the property, will you be accepted for a second one? A mortgage which you appear to be taking on 75% of the payments. Presumably as tenants-in-common rather than joint-tenants? If so, what happens to the equity as deposit your partner is bringing into this arrangement?

BigAunty

DSS (or more strictly speaking) Housing Benefit claimants are considered risky tenants from the perspective that their low incomes and payment of HB directly to themselves rather than the landlord makes it more likely that they go into arrears than other groups and also extremely unlikely for a landlord to be able to recover arrears from them, even if they gain a court decision in their favour.

How much contingency do you have to cover arrears, void periods and repairs? It can take up to 6 months to get a non-paying tenant out of a property though some landlords can manage this much quicker, say 2 months.

captainmesh

Crikey!
Lots to think and talk about here.
Thanks a lot. I can see this MSE being a useful tool