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What to do

Hi there

I'm after some thoughts/advice if anybody can help. I have a small house up north, but have sadly had to leave it. I now live in the south east for work. The house has no mortgage on it anymore and is empty as it is not in a fit state to rent out. I've been deliberating what to do with it - I had been wondering if I could get the work done, but I've decided it is too much to manage a project like that whilst living so far away. Therefore I'm looking at selling it as it is - most likely to a developer. Although it has no mortgage on it anymore, it's costing me money in bills every month and leaving it empty is obviously not a long term solution.

I've been looking at the possibility of buying something down here and the mortgage I would have to take out makes me very uncomfortable. If rates rose, I'd be in big trouble.

Obviously I want to use the money from the house in the best possible way and grow it as best I can. I've been wondering about buying a rental property up north and then trying to overpay it as quickly as I can - I'm about to start a job with an amazing bonus scheme so if I work hard and do well, I could be receiving several decent bonuses a year which I could throw at the BTL mortgage. I'd also try to save a little money from my salary, whilst also trying to have a life, to get the mortgage down.

Having said that I have no experience of renting property out. I know some people who have done it and they've been ok, but I've also heard the nightmare stories of tenants.

Any advice/ideas about how I can best look after the money from my house would be appreciated. Also if anybody can offer any advice on buying a rental property or point me in the direction of a good source of information, I'd be very grateful.

Gwen
Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending

Comments

  • Bill23h
    Bill23h Posts: 68 Forumite
    Fifth Anniversary 10 Posts Combo Breaker
    My thoughts, FWIW:
    If you're in a demanding job down south, you won't want the distractions of tenants hundreds of miles away. To avoid running back and forth for every trivial detail, you'll need to use an agent who will take 20% or so of your rent (and still bother you with issues, probably). Sounds like too much trouble to me, if I was trying to cope with a new job and new living arrangements. Sell the dump and put the money towards your own mortgage, and forget BTL.
  • gwen80
    gwen80 Posts: 2,255 Forumite
    Part of the Furniture Combo Breaker
    Bill23h wrote: »
    My thoughts, FWIW:
    If you're in a demanding job down south, you won't want the distractions of tenants hundreds of miles away. To avoid running back and forth for every trivial detail, you'll need to use an agent who will take 20% or so of your rent (and still bother you with issues, probably). Sounds like too much trouble to me, if I was trying to cope with a new job and new living arrangements. Sell the dump and put the money towards your own mortgage, and forget BTL.

    I hear what you're saying, but I'd be taking out a mortgage of over 4x my salary to buy down here and I'm not even sure I want to stay. I know some would feel ok with this level of debt, but I really don't.

    Of course, I'd have to use an agent to manage the property.
    Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    What sort of support/network do you have up north?

    if you have friends/family, especially practical people, and /or if you know trusted local contractors (odd job man, electrician etc) then managing a letting yourself becomes feasible.

    You'd have to go up to select tenants & set up the tenancy, but then get them to pay you by Standing Order, and any repairs etc can be handled by the people you know.

    There is a risk of the tenancy going pear-shaped (arrears etc) but to be honest agents aren't a lot of help with legal action, evictions etc anyway......

    As Bill says, this may be too much given your job and distance, but you can minimise the risks by vetting tenants carefully and having good local support in place.


    * New landlords: advice, information & links

    * Letting agents: how should a landlord select or sack?
  • gwen80
    gwen80 Posts: 2,255 Forumite
    Part of the Furniture Combo Breaker
    G_M wrote: »
    What sort of support/network do you have up north?

    if you have friends/family, especially practical people, and /or if you know trusted local contractors (odd job man, electrician etc) then managing a letting yourself becomes feasible.

    You'd have to go up to select tenants & set up the tenancy, but then get them to pay you by Standing Order, and any repairs etc can be handled by the people you know.

    There is a risk of the tenancy going pear-shaped (arrears etc) but to be honest agents aren't a lot of help with legal action, evictions etc anyway......

    As Bill says, this may be too much given your job and distance, but you can minimise the risks by vetting tenants carefully and having good local support in place.


    * New landlords: advice, information & links

    * Letting agents: how should a landlord select or sack?

    I know a good plumber, but that's about it. I'd not be wanting to manage it myself - I'm sure that would be too much. It would be a means of using my money from the house to grow, but by taking on a level of debt that I feel more comfortable with. Being a landlord is not ideal, that's for sure, but I don't want to sell the house, bank the money and watch it depreciate next to property values. I'm trying to get hold of my friend who emigrated to Aus about the same time as I moved down south, they have rented their house out in the same town and it is managed by the letting agents. I just wondered if anybody here had any advice/tips for me?

    Thanks for the links, I'll have a look.

    Gwen
    Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    gwen80 wrote: »
    I know a good plumber, but that's about it.
    Well, you're half-way home then.

    Talk to him. He will know a good carpenter, and plasterer, and roofer, and gas engineer etc who he works with. all contractors do.

    Get their phone numbers and chat to them.

    When your tenant tells you a roof tile has fallen, or the boiler stopped working, you ring the relavant chap, who fixes, and sends you the bill.

    While you sit pretty down south.
  • Hoploz
    Hoploz Posts: 3,888 Forumite
    edited 21 March 2015 at 8:32PM
    I have had properties let near to where I live and it has worked fine. I have one property let 2 hours drive away and although 'managed' by the agents it is still causing us headaches. It was a holiday home for ourselves but we recently let it to raise money for our new home.

    We lived there part time totally trouble free for 3 years. The tenants moved in 5 months ago and have done nothing but complain. We have had tradesmen in almost every month for one thing or another, I am already sick to death of their complaints. Nothing in the property is over 3 years old as it was newly refurbished when we bought but we have had plumbers, handymen and electricians, complaints about BT line, boiler they couldn't operate, broken light switches, you name it. It is purely financial and luckily we are doing ok from the rent to just about cover it, but it has really put me off letting property further afield. I cannot pop in when they complain about something to check they are using it properly etc, and I have no knowledge of local tradesmen.

    Last week the agent's plumber couldn't fix the shower and said it needed replacing. It is all built in concealed with tiles so he was going to knock a hole in kitchen wall to get to bathroom wall without disturbing tiles, which would have caused a complete mess in the kitchen ... And the quote came to almost £600. After some sleepless nights I felt all I could do was ask the agent to find another contractor to get a second opinion, and this plumber fixed it himself on the spot for £50 call out charge. Such a headache! We can't wait to get back on our feet and chuck these tenants out and get back our lovely cherished holiday home!

    That is my experience, anyway.
  • ultrafox
    ultrafox Posts: 29 Forumite
    Your in the buy to let business. Maintainance happens. It's always something you should cater for.

    Complaining about having to do a few repairs when some people can't afford to buy there own house seems very bad form.
  • gwen80
    gwen80 Posts: 2,255 Forumite
    Part of the Furniture Combo Breaker
    I've been starting to have a look at what sort of property I might want/be able to get to rent out up north. I could get a two bedroom, two bathroom flat around 10 years old with a 60k mortgage. This would have a parking space and be 5 mins away from the train station with a journey into Manchester taking half an hour and a journey to London in less than 2 hours.

    I'd hope that by buying a newer property, that maintenance might be less of a problem. It'd also be something that I'd be happy to live in should I need to relocate again.

    It looks like the mortgage payments could be around 400/month. There isn't anything directly comparable to rent on rightmove, but I'd guess it could rent for at least 700/month. I'd need to factor in maintenance charges for the block, agents fees and insurance. I'd also need to build up a fund for repairs and any time the property was left empty, but I'd hope that I could start overpaying within a reasonable period of time. Thoughts?
    Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending
  • gwen80
    gwen80 Posts: 2,255 Forumite
    Part of the Furniture Combo Breaker
    G_M wrote: »
    Well, you're half-way home then.

    Talk to him. He will know a good carpenter, and plasterer, and roofer, and gas engineer etc who he works with. all contractors do.

    Get their phone numbers and chat to them.

    When your tenant tells you a roof tile has fallen, or the boiler stopped working, you ring the relavant chap, who fixes, and sends you the bill.

    While you sit pretty down south.

    Hmm, well the plumber recommended a joiner to me who I've used a couple of times recently. I don't have any problem with the quality of his work, but he is completely disorganised so you never know when/if he will turn up to do any work.
    Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending
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