Selling vs Renting it out

need_an_answer

Your mortgage payments will be £1000 a month ...so what do you expect to get from the property in rental payments?

AnotherJoe

K2S04 wrote: »

Very valid points. Pardon my ignorance but we were thinking of letting it out via a letting agent. Shouldn't they be managing all the need-to-do at a cost (5-10%?).
BWAHAHAHA more like 15-20% !

In my head, it was about getting a LA onboardwho looks after it while we are away.

My next door neighbour went abroad for work and let his house out. He used an agent. They still had to confirm to him all the details of any maintenance and issues, and pretty much just operated as a telephone answering service fixing the time difference gap.So the would bounce back and forth emails about cost of fixes, shoudl it be repaired or replaced and so on. Ironically, the amount of hassle was much more than if he was local without an agent. Now, maybe he could have done it differently, perhaps said "any issues under £150 to fix get it done and invoice me" but then that's open to all sorts of abuse as well.

He also had to pay top dollar for fixes since he could not DIY any issues, so what might be a £5 visit to Homebase and five min with a screwdriver were he local ended up being a £150 cost.
He still did OK out of it but that was in a period before the new tax laws and all the additional rules and regulations. Plus he was already in his house and all this happened in a period of house price inflation, neither of which apply to you. And being a foreign landlord introduces all sorts of complexities regards tax as well.

In your position i wouldnt even consider anything other than continue to rent and look to buy when you return.

p.s. its also worth saying whilst he had decent tenants, i think 2 sets over his absence, he still had to pay for a complete redecoration throughout the entire house when he moved back in and he was lucky he got tenants who moved out on schedule or the cost for him to rent would have wiped out years of rental profit.And that woudl apply to you, if your tenants didnt move out then what woudl 6 months rent cost you?As I've posted here before the current LL to this house (my friend sold) is £10k underwater due to their last tenants. I hope this wouldn't be a newbuild you are currently looking at with a newbuild price premium as well?? Just dont do it.

Cakeguts

K2S04 wrote: »

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.

1 Most tenants don't care about whether the house is detached or not. A small detached house will not rent for any more money than a similar sized semi-detached.



2 The tenants do not have to leave after the 2 months notice has expired they are entitled to continue to live in the property until you get possession from a court. This could take at least 6 months depending on how busy the court is. In that 6 months you will have to rent somewhere else.


The fact that you have been good tenants doesn't mean that your tenants will be good. You don't have the experience that many landlords have. We have been letting property since 1990 so getting on for 30 years and we have more than one rental property so much more experience in the lettings market than you have.


3 The lettings agents arrange for repairs to be made and then charge you for them often against the rent.



4 There is no way that you can predict what the house will be like after it has been let for 2 years. It could need extensive repairs or it could need just a few things doing to it.





Don't forget that you need landlord insurance for a rental property because it has to include public liability. You also need to pay for gas safety certificates every year. As well as the fees to let it.

K2S04

Thank you everyone! We will probably continue to rent.

Peter_Williams

grumiofoundation wrote: »

So presumably not paying any tax...

I doubt he pays any tax.
He pays cash for the building materials from salvage yards etc.
I know, because I've been roped into helping to carry them.