New Landlord - Advice Please - Moving to Australia

movinghelp

Hello All,

I was advised to post a separate thread although if you want to read why I'm moving please see https://forums.moneysavingexpert.com/discussion/5452048

I've read GM's fantastic sticky and as a result have a few questions. My OH and I are planning to move to Melbourne in August (initial plan is to do so for 2 years) and would like to rent our 2 bed maisonette in North London. This is the list of things i've made which I think we need to consider:

1) Consent to let - I have spoken to Santander who have said I will need to pay £300 and answer a list of questions correctly (ie. agree not to have a HMO)

2) Letting agents - I have only ever rented directly from the LL but as we will be out the country we are considering using a LA. Marsh & Parsons who were recommended by my sister quoted a 10% + VAT finders fee and 6% + VAT management fee which can be paid quarterly. I don't know what's best here.

Personally I would like to try finding tenants initially myself as my OH and I live 20 min walking distance from our offices (Kings X) and is they are both global companies so that's about 2,000 people.

I would of course still do all checks (payslips, bank statements, landlord references, immigration status, credit search) but would want to oversee this anyway even with a LA.

I understand I would also need to provide a UK address for serving notice which would be my father's. My brother lives a 5 min walk from the property in case of emergency and our builder is also local who I would trust to do repairs over a LA contractor. So not sure whether we need/want either service.

3) Serve notice to utilities - do I just need to send a letter to Npower, Thames Water, TalkTalk to inform them of our moving out date / tenant move in date? What about TV license? As it's an ex LA property do I also just inform the council for tax and then continue paying service charge?

4) Legal requirements - I understand I would need to secure (or ensure LA secures) a deposit in an approved scheme within 30 days and provide the prescribed information. I would also need an EPC, gas safety certificate, smoke detectors on each floor. If I rent furnished I also need to ensure everything is certified fire resistant and the electrics are safe. Where do I get all this documentation from? Have I missed anything?

5) LL association and landlord insurance - anyone have any recommendations for these?

6) Writing an AST - I would like to do a 12 month AST with a 6 month break clause. Is there a template online I can use for this or do I need to visit my solicitor? I would of course do I full signed inventory with photos on move in date - I've seen inventory clerk mentioned but again is this recommended rather than doing it personally with the tenant?

7) Income tax on rent. I think this could be fairly substantial. Due to the deposit we placed our motgage payment is fairly low so there is potential to be a £6-700 profit per month (if rent is paid obviously on time and in full). I've never done self assessment, any advice?

What have I missed?!

theartfullodger

movinghelp wrote: »

.....
......
3) Serve notice to utilities - do I just need to send a letter to Npower, Thames Water, TalkTalk to inform them of our moving out date / tenant move in date? What about TV license? As it's an ex LA property do I also just inform the council for tax and then continue paying service charge? TV licence unless you provide TV is always - if not HMO(?) - tenant's problem: If providing TV simply include clause stating TV license their resp.
....

6) Writing an AST - I would like to do a 12 month AST with a 6 month break clause. Is there a template online I can use for this or do I need to visit my solicitor? I would of course do I full signed inventory with photos on move in date - I've seen inventory clerk mentioned but again is this recommended rather than doing it personally with the tenant?.....

3. You write (yes, WRITE! - or email - keep copies to all utilities & council tax people on ANY change of occupants or void, with meter readings etc...

6. 6 months only. You do not know if you are getting the tenant-from-hell & having a 12 months, even with break clause, is IMHO too risky. Break clauses are hard to get correct, easy to challenge...

https://www.gov.uk/government/publications/model-agreement-for-a-shorthold-assured-tenancy
- is free but you'll need other documents as things progress (eg evictions) suggest you get everything from a landlord association who also have training & a help-line

silvercar

a 10% + VAT finders fee and 6% + VAT management fee which can be paid quarterly.

Expensive. You are in a competitive area. I would be looking at 10% for finding and managing. I would also be paying from the rent monthly rather than quarterly.

G_M

a 10% + VAT finders fee and 6% + VAT management fee which can be paid quarterly.

silvercar wrote: »

Expensive. You are in a competitive area. I would be looking at 10% for finding and managing. I would also be paying from the rent monthly rather than quarterly.

If the tenants stay 6 months, it's expensive.

If they stay 3 years, it's not (since the ongoing magnmt fee is only 6%).

movinghelp

It is expensive I agree and just not sure it's worth it especially when looking at the list of 'other' fees http://www.marshandparsons.co.uk/services/lettings/landlord-fees

silvercar

G_M wrote: »

If the tenants stay 6 months, it's expensive.

If they stay 3 years, it's not (since the ongoing magnmt fee is only 6%).

It is an area with high rents. Those percentages and other fees quoted on their website, suggest they are laughing all the way to the bank.

booksurr

1. OK sorted assuming the CTL covers the entire time you anticipate being away

2. as you understand, you will be abroad. You need a UK address, You appear to have one, plus you appear to have people wiling to act in your absence. Why therefore bother with a management agent? It's not compulsory given your father and brother's willingness.

3 obviously you do not wish to remain liable for a tenants usage, so yes of course you write to the utility companies, just as you would if you sold and moved address.

4. No

5. RLA? But given your time scale will you be able to benefit from their courses anyway?

6. there are loads online, whether any are any good you will only find out when you need to go to court. Obviously there is also an argument for why reinvent the wheel as a let is a let. Use the Govt one?
An inventory clerk has the "advantage" of being an "independent" appraiser but is that worth the extra cost if you and the tenant can do it together in a civilised manner?

7. Obviously you must register under the NRL scheme to avoid the tax deduction and you'd have to register for SA whatever you do. https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4800

I assume you realise that only the interest element of the mortgage repayment is a cost so your taxable profit may be more than your think!

G_M

movinghelp wrote: »

1) Consent to let - I have spoken to Santander who have said I will need to pay £300 and answer a list of questions correctly (ie. agree not to have a HMO)
tick

2) Letting agents - I have only ever rented directly from the LL but as we will be out the country we are considering using a LA. Marsh & Parsons who were recommended by my sister quoted a 10% + VAT finders fee and 6% + VAT management fee which can be paid quarterly. I don't know what's best here.
See my post:
* Letting agents: how should a landlord select or sack?If you can manage all the activities an agent would do (eg via dad, your builder etc) then you don't need an agent

Can dad find and vet new tenants if your 1st ones leave? (though you/he could always appoint an agent on a tenant-find basis only).
Personally I would like to try finding tenants initially myself as my OH and I live 20 min walking distance from our offices (Kings X) and is they are both global companies so that's about 2,000 people.
So you'd do this before you leave? You have somewhere else to live?

I would of course still do all checks (payslips, bank statements, landlord references, immigration status, credit search) but would want to oversee this anyway even with a LA.
Tick

I understand I would also need to provide a UK address for serving notice which would be my father's. Tick My brother lives a 5 min walk from the property in case of emergency Tick and our builder is also local who I would trust to do repairs over a LA contractor. Tick (electrics? boiler? plumbing? So not sure whether we need/want either service.
I'd always prefer my own trusted contractors over an agent's....

Think through how it would work though:
* give the tenants the builder's details and just let them get on with it? Do you trust the builder enough?
* tell tenants to contact brother/dad, who decide what to do and contact builder?
* email you for decision?
etc

3) Serve notice to utilities - do I just need to send a letter to Npower, Thames Water, TalkTalk to inform them of our moving out date / tenant move in date? What about TV license?
no different to moving out anywhere - take meter readings, contact providers, pay final bills.
I also prepare letters in the tenant's name addresed to the providers, and get them to insert meter readings and sign as part of move-in process. Then I post. (copies for me & tenants) Makes it easy for the tenants, + I know the new accounts are set up.
As it's an ex LA property do I also just inform the council for tax and then continue paying service charge?
Contact Council Tax dept as above
Service charge is down to you to pay. Standing Order? Plus give them a new contact address (along with 101 other people/organisations who need to know you've moved).

4) Legal requirements - I understand I would need to secure (or ensure LA secures) a deposit in an approved scheme within 30 days and provide the prescribed information. from deposit scheme I would also need an EPC from EPC provider, gas safety certificate from Gas engineer, smoke detectors on each floor.from Screwfix If I rent furnished I also need to ensure everything is certified fire resistant from label on furnishings and the electrics are safe. from electrician Where do I get all this documentation from? Have I missed anything?
government leaflet "how to rent"
tenant info folder

5) LL association and landlord insurance - anyone have any recommendations for these?

6) Writing an AST - I would like to do a 12 month AST with a 6 month break clause. Start with 6 months. Then either let tenancy go periodic or agree new longer fixed term.
If using an agent, don't let agent push you/tenants into repeat fixed terms at repeat costs to you both.

Is there a template online I can use for this or do I need to visit my solicitor?
Landlord Association
I would of course do I full signed inventory with photos on move in date - I've seen inventory clerk mentioned but again is this recommended rather than doing it personally with the tenant?
It's an important document (for you) to get right. By all means DIY, but make sure you know how. See examples on The AIIC website.

7) Income tax on rent. I think this could be fairly substantial. Due to the deposit we placed our motgage payment is fairly low so there is potential to be a £6-700 profit per month (if rent is paid obviously on time and in full). I've never done self assessment, any advice?

What have I missed?!

As you are overseas, either
* you need HMRC consent to receive the rent in full and pay tax later, or
* tenant should deduct tax as HMRC can claim it off them, or
* agent in UK who collects rent for you should deduct (whether a professional agent, or your dad...)
see MRC (Non Resident [= overseas] Landlord Scheme)

movinghelp

Thanks so, so much. I feel much better about doing this direct now.

movinghelp

If it doesn't work out with colleagues are non estate agents allowed to post properties on Rightmove? I've had a look at their site but its not clear.

theartfullodger

movinghelp wrote: »

If it doesn't work out with colleagues are non estate agents allowed to post properties on Rightmove? I've had a look at their site but its not clear.

& booksurr's comment

Use google! No, rightmove does not allow individuals to post, only businesses can post.

- up to a point Lord Copper:

There are a whole string on online letting agents who will gladly allow individuals to advertise: for £99 +VAT or less on all the main letting websites
http://www.upad.co.uk/
or
https://easyproperty.com/residential-lettings
etc etc etc...

So whilst booksurr is literally correct in practice not:

I've a property advertised for the one-off fee with Righmove, Zoopla, Gumtree etc etc..

Out walking in the Scottish Highlands yesterday (Sunday) morning got a TXT informing me of an interested tenant: 'phoned him 20 minutes later, did the viewing that afternoon. Try
that with your typical high-street agent.

Here is the view in March from the sitting room


RM advert here
http://www.rightmove.co.uk/property-to-rent/property-41563896.html
(As an example: I don't expect to find a tenant from this thread...)