Help with renting out my flat. Should i?

webbos13

Hi All,


Apologies in advance if this topic is well covered but I am looking for some help. My flat is currently on the market to sell but has had very little interest. We have recently come in to some money which has put us in the position to buy a new house and still keep the flat. I am on about £36,000 a year and my flat has the potential to achieve rental income of about £450 a month. My mortgage for the flat is a fixed rate of £290 a month.


Neither myself or my partner have ever rented out property before and we don't have a clue where to start! The estate agent who the flat is up for sale with have said they will help us but in the meantime I'm looking for a bit of impartial advice!


Should I rent out my flat or wait for it to sell, or both? Will it be worth my while in terms of rental income vs. cost of mortgage, landlord insurance, estate agent fee's etc. Where do I even start?


Thanks in advance!

Fire_Fox

Welcome to MSE.

At the very least you would need consent to lease from your lender. Given that you intend to take out another residential mortgage you may well need to convert your current mortgage to a BTL one. This will alter your monthly repayments.

Consider how you will cover two mortgages if your tenant stops paying the rent, if you or your partner lose your job or are unable to work due to illness, if you and your partner split up, or some combination (sadly it happens ).

Whilst you can delegate some of the day-to-day management tasks of a rental property to a letting agent, you cannot delegate your legal responsibilities as a landlord. Legally the agent's mistakes are your mistakes. Ommissions at the start of a tenancy can make if extremely difficult to later evict even a 'bad' tenant.

It is worth working through the Tenancies in Eng/ Wales: Guides for landlords & tenants 'sticky', and worth spending some quality time with the 'advanced search' function. Both are at the top of the main page of this board.

The general consensus here on MSE is that a property that has had very little interest from buyers is overpriced or poorly presented or both.

HTH!

Gwendo40

Your flat will have had ''very little interest'' because it's overpriced.

All properties WILL sell if they're priced appropriately, have you considered marketing it at a sensible and realistic price which will generate interest and offers? (Crazy idea, I know)

csgohan4

If your considering renting, have you researched your legal and tax implications? Using an agent does not pass on your responsibilities.


As Above your flat is likely overpriced.


Letting is not for the faint hearted and is no longer the gravy train it used to be


https://forums.moneysavingexpert.com/discussion/5983050/taking-tenant-to-small-claims-court


https://forums.moneysavingexpert.com/discussion/5956212/need-advice-after-evicted-a-tenant


https://forums.moneysavingexpert.com/discussion/5896992/evicting-tenants-via-court-and-bailiffs

Cakeguts

Before you decide to let the flat drop the price by at least £10k and then see what happens about the interest in it.



To be honest it doesn't really sound like a good flat to let because the rental income is so low. If it was in a more popular location the rental income would be quite a lot higher.

G_M

* New landlords: advice, information & links

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

Fire_Fox

Cakeguts wrote: »

To be honest it doesn't really sound like a good flat to let because the rental income is so low. If it was in a more popular location the rental income would be quite a lot higher.

:rotfl:

Come Ooop North, see how the other half live.

Comms69

webbos13 wrote: »

Hi All,


Apologies in advance if this topic is well covered but I am looking for some help. My flat is currently on the market to sell but has had very little interest. We have recently come in to some money which has put us in the position to buy a new house and still keep the flat. I am on about £36,000 a year and my flat has the potential to achieve rental income of about £450 a month. My mortgage for the flat is a fixed rate of £290 a month.


Neither myself or my partner have ever rented out property before and we don't have a clue where to start! The estate agent who the flat is up for sale with have said they will help us but in the meantime I'm looking for a bit of impartial advice!


Should I rent out my flat or wait for it to sell, or both? Will it be worth my while in terms of rental income vs. cost of mortgage, landlord insurance, estate agent fee's etc. Where do I even start?


Thanks in advance!

Do you want to be a landlord? Because it's not sitting back and counting the pennies. - and it will be pennies, and that's if you cut corners.


£450 a month income
-£45 (10% agents fee)
-£80 (tax, I believe you can still deduct the agents fee from the gross)
-£290 (current mortgage expect that to change)
-£25 (? management fees - I'm guessing but it's a relatively low value flat based upon the proposed income)
-£30 (atleast - sinking fund to cover gas safety checks, minor repairs, etc)




Which leaves you negative £20 a month.

lookstraightahead

Its not just like choosing which chocolate bar to pick. It's a business. You have to operate it like a business. Do you want the positives and negatives of running your own business?

Norman_Castle

Comms69 wrote: »

£450 a month income
-£45 (10% agents fee)
-£80 (tax, I believe you can still deduct the agents fee from the gross)
-£290 (current mortgage expect that to change)
-£25 (? management fees - I'm guessing but it's a relatively low value flat based upon the proposed income)
-£30 (atleast - sinking fund to cover gas safety checks, minor repairs, etc)




Which leaves you negative £20 a month.

The £290 mortgage payment is an investment in the property so not a negative.

Cakeguts

Fire_Fox wrote: »

:rotfl:

Come Ooop North, see how the other half live.

The comment was based on rents ooop north. Greater Manchester.