Would this make me a landlord?

Fireflyaway

I recently posted explaining that we need to move from our flat ( its too small for our needs now) but would like to keep it as an investment. However we can't get a buy to let mortgage at the moment so I'm thinking of alternatives.

So...if I let someone stay in the flat for free instead of just leaving it empty would I still be classed as a landlord? Any other suggestions?

Fireflyaway

No I am not trying to break the rules - opposite in fact. I can't get a buy to let or I would. Bad credit and also rent would not cover the repayments.

Rather than just leave the place empty I thought it would be nice to give someone somewhere to live. If that still makes me a landlord I obviously can't as I would be breaching my mortgage terms.

lovinituk

If rent wouldn't cover repayments, how is someone staying there for free going to cover the repayments on the residential mortgage you have?

Ozzuk

As above, I assume you are looking to rent somewhere new, so you'd have to cover rent and mortgage. Or if you are buying somewhere new then it makes no sense why you can't just change your existing mortgage. Also keep in mind if you are buying a second property without a BTL, you won't get a very good mortgage rate and you'll have to pay more deposit. Actually thinking about it, unless you have a very good income or your mortgage needs are very low you don't stand a chance of buying 2 properties, its hard enough getting mortgage for one at the moment!

Talk to a broker for options.

Pixie5740

You seem hell-bent on keeping this property as an investment. Is it really an investment though if it's going to cost you money (mortgage repayments, maintenance, etc) every month? What sort of return do you think this property is going to give you?


If you don't want to be a landlord you could explore property guardianship as an alternative.


Edit: Although I think the most sensible courses of action are to either continue living in the property and just make the best of it, or sell it and move somewhere else.

Foxy-Stoat_3

Letting someone live in your flat for free while you rent/buy somewhere else to live would be the opposite of an investment. Just sell it and live somewhere else.

Your lender will not allow you to let someone live there for free, they will also not let you leave it empty for a long period of time, read the terms and conditions.

Fireflyaway

Thanks everyone. lovinituk - I would continue paying the mortgage ( an alternative to saving if you like)
Ozzuk - yes we would rent somewhere new and pay the rent and mortgage.
Just thought it would be nice to have someone stay in the house rather than leave it empty - no ulterior motives!

Pixie5740

You can't just leave the property empty anyway. It will invalidate your insurance.

The_Earl_of_Streatham

It sounds like you've got a residential mortgage, I suspect that anything you do that involves your not living there for a period of time will put you in breach of your agreement.

Likewise insurance, the place is presumably insured if it's mortgaged, there's usually a stipulation that the place not be left unoccupied. If pipes burst or the roof blows off you may find yourself without cover.

Hanging on to the place may present more problems than it solves.

lovinituk

I guess the lucky person who gets to stay there for free would be giving you a totally unconnected monetary gift every month

Fireflyaway

OK thanks - I had not thought of the insurance - makes sense. Maybe we are better off selling and taking the equity. I guess I have just become very attached to this little place:)