Selling vs Renting it out

need_an_answer

K2S04 wrote: »

Can the rent usually cover Mortgage + Additional fees (Estate agent, etc) or should I plan for still paying from overseas?

Please help

What are your basic figures...list them and I'm sure we can advise.

Is your property leasehold,if so what are your current service charges as they are covered by the leaseholders as their responsibility to pay rather than it being a utility that's passed to tenants

A good practice is to allow a month every 12 as a void period,the time between tenants that the property will be empty but that all utilities return to you as well as the cost of cleaning and repairing on for the next tenant...so in your calculations don't assume rent 12 months every calendar year

There will be incidentals like a cp12 that's needed annually if theres gas in the property but give us your basics and we can work from there for you.....

Peter_Williams

Having just visited a property where the tenants decided to burn the internal doors and carpets for heating, I would advise against becoming an absent landlord..!

[Deleted User]

Peter_Williams wrote: »

Having just visited a property where the tenants decided to burn the internal doors and carpets for heating, I would advise against becoming an absent landlord..!

In fairness your relative ended up with the tenants he deserved.

Peter_Williams

Comms69 wrote: »

What happens if the tenants don't move out when you'd like them to?

The council will tell the tenants to stay put until the bailiffs arrive. Otherwise the tenants are intentionally homeless and ''won't get re-housed''.

Peter_Williams

Lover_of_Lycra wrote: »

In fairness your relative ended up with the tenants he deserved.

True.
But he charges a low cash rent. Some of his tenants have been quite good. They spend their own time maintaining the house and he helps them.
I think some of his tenants actually make money, by charging others to stay in the house.

But I think times up for this now. He's too old. He should stick them all in the auction.

grumiofoundation

Peter_Williams wrote: »

But he charges a low cash rent.

So presumably not paying any tax...

Comms69

Peter_Williams wrote: »

True.
But he charges a low cash rent. Some of his tenants have been quite good. They spend their own time maintaining the house and he helps them.
I think some of his tenants actually make money, by charging others to stay in the house.

But I think times up for this now. He's too old. He should stick them all in the auction.

There’s more than one?

HMRC are going to have a field day

Cakeguts

I am a landlord. The properties we own have been picked especially for the rental market using a formula that we know works and gives us good tenants. We have not lived in any of the properties we own. We have no emotional attachment to them.



The mistake a lot of people make is that they think that a house that they have chosen to buy to live in will make a good rental. Sometimes they do but very often they don't. The reason why they don't is because a buyer will make more compromises to buy a property that they like than a tenant will to rent a property.



If you have chosen to buy a property that won't make a good rental you are not going to get good tenants who will look after it and you are going to get a lot of periods when the property is vacant. When the property is vacant you will be losing a lot of money plus you need to make sure that your insurance covers the house if it is vacant for several months at any time.



If you need to take out a mortgage to buy any house that you are going to let you need to be in the position where you can pay the mortgage if you are not getting any rent and you need also to be able to pay for any extensive damage that might occur to the property.



A letting agent is unable to screen out tenants who have good references but tell lies. They also can't screen out tenants who pass all the checks but then either sublet the property on Airbnb or to other multiple tenants. They can make checks on your property but if they discover that the property has been sublet then you will have an expensive time evicting the original tenant and the subletters. Please be aware that it can take at least 6 months to evict a tenant and in that time they may not be paying any rent and when they leave they may wreck the property in revenge for the eviction. You cannot take enough money in the deposit to cover the amount of damage that can be done to a property.



Be prepared to have to replace the entire kitchen, the bathroom, all the carpets, the curtain rails, the window handles and the internal doors and to redecorate the whole property. The deposit that you can take will not cover all of this plus the tenant might not have been paying rent for at least the last 6 months.



People mistakenly think that they can put their property on the rental market and everything will run smoothly and their won't be any problems. There will be problems. Even with properties chosen as rental properties tenants still do things that they shouldn't and don't tell the landlord that they have done them.



You may have specified no pets but that won't stop your tenant from getting two large dogs or a cat.



If you are intending to return from abroad and move back into your house without having to do any work to it or to evict any tenants don't let it.

K2S04

Cakeguts wrote: »

I am a landlord. The properties we own have been picked especially for the rental market using a formula that we know works and give us good tenants. We have not lived in any of the properties we own. We have no emotional attachment to them.



The mistake a lot of people make is that they think that a house that they have chosen to buy to live in will make a good rental. Sometimes they do but very often they don't. The reason why they don't is because a buyer will make more compromises to buy a property that they like than a tenant will to rent a property.



If you have chosen to buy a property that won't make a good rental you are not going to get good tenants who will look after it and you are going to get a lot of periods when the property is vacant. When the property is vacant you will be losing a lot of money plus you need to make sure that your insurance covers the house if it is vacant for several months at any time.



If you need to take out a mortgage to buy a any house that you are going to let you need to be in the position where you can pay the mortgage if you are not getting any rent and you need also to be able to pay for any extensive damage that might occur to the property.



A letting agent is unable to screen out tenants who have good references but tell lies. They also can't screen out tenants who pass all the checks but then either sublet the property on Airbnb or to other multiple tenants. They can make checks on your property but if they discover that the property has been sublet then you will have an expensive time evicting the original tenant and the subletters. Please be aware that it can take at least 6 months to evict a tenant and in that time they may not be paying any rent and when they leave they may wreck the property in revenge for the eviction. You cannot take enough money in the deposit to cover the amount of damage that can be done to a property.



Be prepared to have to replace the entire kitchen, the bathroom, all the carpets, the curtain rails, the window handles and the internal doors and to redecorate the whole property. The deposit that you can take will not cover all of this plus the tenant might not have been paying rent for at least the last 6 months.



People mistakenly think that they can put their property on the rental market and everything will run smoothly and their won't be any problems. There will be problems. Even with properties chosen as rental properties tenants still do things that they shouldn't and don't tell the landlord that they have done them.



You may have specified no pets but that won't stop your tenant from getting two large dogs or a cat.



If you are intending to return from abroad and move back into your house without having to do any work to it of to evict any tenants don't let it.

Thank you for the insight. I will try to answer the remaining queries below:

1. Property we are buying is a freehold. Mortgage calculation is coming around 1000. It is detached 3 bed in Gloucester.

2. We will be away for 2 years. This should cover the minimum tenancy period and I am hoping we should be able to serve the 2 months notice. While I understand the nightmare tenants, I was counting on the good ones. We have been tenants for last 5 years in 2 different houses and did not give either of the LL any grief.

3. I suppose the Letting Agents are not liable for any upkeep even if they are managing the property? I thought they would be liable.

4. Lastly, agree on the personal attachment, buyer compromise vs tenant expectations. We are expecting the house with few odd jobs.

I suppose the conclusion is don't really do it unless you really want a headache.

AdrianC

K2S04 wrote: »

1. Property we are buying is a freehold. Mortgage calculation is coming around 1000. It is detached 3 bed in Gloucester.

A quick look on RM suggests there are only a handful of three-bed houses to rent in Gloucester at a grand a month or more.

https://www.rightmove.co.uk/property-to-rent/find.html?locationIdentifier=REGION%5E556&maxBedrooms=3&minBedrooms=3&sortType=2&primaryDisplayPropertyType=houses

So you WILL be heavily subsidising your tenants each and every month, because a grand in rent less management less maintenance less everything else is going to leave you waaaay into the negative cashflow, even before you remember that the mortgage repayment element is excluded for income tax, so you'll be still be showing some taxable income.

And that's before voids, damage, unpaid rent etc etc.

3. I suppose the Letting Agents are not liable for any upkeep even if they are managing the property? I thought they would be liable.

They may arrange the upkeep... But you're paying for it. And for their fees in arranging the trades to do the work.