Travelling for a Year and renting out our Flat. Checking I've got this right?

niceguyed

Hi All,

Going off travelling for a year in NZ in Nov and I just want to check over what I've found so far. I want to make sure I do everything above board! We will rent out our flat which alas (and as antipated) will yield a shortfall on our capital repayment mortgage - fixed until Nov 08. Shortfall will be approx £200 pcm. We have budgeted for this. In terms of tax status I think we will be classed under the non - resident landlord scheme. As we have paid all taxes to date under PAYE I'm hoping we should be able to get an exemption from having tax deducted up front. Although the predicted rent we would receive is more than the interest on the mortgage the reminder of our personal allowance should cover the difference so hopefully although a tax return will have to be filed we shouldn't be liable. OK, so with that in mind this is what I believe myself and GF need to cover in no particular order.

1) - Sort out tax liability (see above)
2) - Get Mortgage company approval.
3) - Get a managing agent (done this already, also paying for the rental guarantee and legal cover insurance)
4) - Our flat is leasehold so do I need to get management company approval?? (they cover the buildings insurance).
5) - Flat will be furnished so pay for landlords contents cover.

Is there a glaring omission? Thanks in advance.

Niceguyed

horace_2

Travelling for a Year and renting out our Flat. Checking I've got this right?

You are incorrect. Landlords do not `rent out` they let.
Have you ever seen a mortgage provider advertising `Buy to rent out mortgages`?

h

franklee

4. Yes.

Other points. Remove all valuables, personal items and paperwork from the property. Do not store locked in loft in case they get nicked.

Ensure all soft furniture meets the fire safety regs. Get gas appliances checked. Check the tenants deposit will be protected. The agent should tell you about these.

olly300

niceguyed wrote: »

4) - Our flat is leasehold so do I need to get management company approval?? (they cover the buildings insurance).
.

Niceguyed

No.

You need to make sure you are contactable during the year to pay the service charge (you can do this online or via direct debit but you need to know the amount) , to sort out any issues involving the tenants i.e. permission to do repairs, and anything that may cause you to claim on the building insurance.

So make sure you have given everyone concerned a mobile phone number (make sure they can access your voicemail box) and an email address.

Oh and it may be worth giving a relative in this country permission to sort out some of your affairs while you are away i.e. dealing with the managing agent if the tenants decide not to pay rent, the address for letters to be forwarded to. You should inform each company that you want them to do this for in writing due to the Data Protection Act.

Curious_Moose

You should check the terms of your lease regarding renting out the flat. In practice there should not be a problem, but there may be something in there which says you need permission from the freeholder.

I lived in a block of flats and at one of the residents meetings, one of the flat owners (who like you lived there but then rented out when they went away for a year or so) mentioned that the freehold company (who knew every trick in the book) had charged her about £100 as she hadn't got their approval before hand. Somehow, they had found out she was renting out her flat. They had a list of extortionate charges for every such contingency (including trying it on when you remortgaged, but that's another story).

Hopefully, you will be ok.

How about getting one of those forms from the post office which re-directs your mail for 6 months to a trusted address.

franklee

Arrange to redirect your mail to a trusted address like parents. You cannot reply on the tenant to forward it on to you and you do not want their reading it.

Check if the agent notifies the council for council tax and the utility companies, if not do it yourself.

niceguyed

Thankyou for the replies so far, some excellent suggestions.

Franklee - All personal items will be coming out. Furniture is OK. The flat is all electric. I'll be putting a mail re-direct on the property for 12 months and sorting the utility companies myself.

Olly300 - A good point. We pay the service charge by DD, I'll be taking my mobile away with a world sim as well as having a landline message box.

Curious Moose - No permission needed on the lease, checked this before signing.

Horice - Thanks for your contribution.