Options for renting out property for 2 years

Slithery

kamb1ng wrote: »

Thanks all for your warnings. I was a tenant myself for many years before buying my own place and was well aware that my landlord can ask me to evict with 1 month notice. This happened once when my landlord was selling the house and I obliged.

It's actually 2 months, but even then the tenant doesn't have to oblige. The notice the LL gave you was that if you didn't leave when they asked then they would go on to the next step.

The only parties that can end a tenancy are the tenants or the courts, as a LL you would have very little say in the matter. Eviction through the courts takes at least 6 months, and then only if all of your paperwork is in order. If it isn't then you have to start the process again. This was all explained to you in the link in post #2. Did you read it?

And those are the current rules, they will soon be changing to make it even harder to evict tenants.

AdrianC

kamb1ng wrote: »

So I don't quite understand the seemingly default outcome of horror stories about tenants refusing to move out. Of course there are bad ones out there, but if the right checks are made (credit, background, etc) and I had a chance to review the profiles, doesn't that help to reduce the chance of getting a bad tenant?

Reduce, yes.
Remove, no.

Two years of rent, less the increased outgoings/income tax/etc, will bring in how much money?

How quickly will that look like small beer if things do go wrong?

How frequent do bad tenant situations actually happen? 10% or 90% of the time?

Even if it's only 10%, that's a one-in-ten chance that you're going to get back from your travels and be homeless.

Also - are you likely to want to return to the UK for visits/breaks at some point in the two years?

[Deleted User]

I am in a similar situation in that I've been offered the opportunity to work overseas for 2 years and my mortgage is with Nationwide. I recently took a mortgage retention production and fixed for 2 years this month. I wouldn't look to apply for CTL until Jan/Feb 2020 where if granted Nationwide would increase the rate by 1%. I'm not sure if Nationwide will entertain CTL immediately after switching to a new product.

For me I'm struggling to make the sums stack up for a 2 year let. To give you some rough and ready calculations I think that a realistic rental price for my flat would be £625 so over 2 years that gives £15,000 income assuming 100% occupancy.

Mortgage interest: £10,952.37
Letting agency fees (what I have been quoted so far):

• £1,800 for fully managed (10% of rent +VAT)
• £240 inc VAT set up fee
• £360 inc VAT letting fee
• £75 for inventory check (10% + VAT of month rent)
• £2,475 assuming I only have the one tenant for the duration

I will also require:

• Landlord insurance
• Legionella risk assessment
• EICR and PAT testing
• Smoke alarms fitted in living room and heat detector in kitchen (I already have one in the hall) which must be hard wired and interlinked
• Annual gas safety certificate
• Landlord registration

I appreciate that some of these requirements are specific to Scotland and not rUK but as you can see, once you start to crunch the numbers I am barely breaking even, if at all, with 100% occupancy which isn't a given. I think I would be better off taking the hit on the 100% council tax for the final 12 months of an empty property, making sure my buildings and contents insurance covered me for being away for so long and having my parents come and stay a few days a month to keep the insurance valid.

Finances aside, I have spent the last 4 years making this property my home and at the moment I couldn't contemplate someone else living here. The rental market isn't great here for landlords at the moment so even though I have a nice home in a nice area I probably wouldn't get my pick of the tenants.

The other hurdle I face is what if I love it overseas and decide to stay a bit longer? Then I'm faced with trying to get an ex-pat BTL because I doubt Nationwide will grant CTL indefinitely and even if they did, come September 2021 I would be stuck on their SVR + 1%. :eek:

00ec25

kamb1ng wrote: »

Thanks all for your warnings. I was a tenant myself for many years before buying my own place and was well aware that my landlord can ask me to evict with 1 month notice. This happened once when my landlord was selling the house and I obliged.

then you were an ill-informed tenant and your experience has taught you nothing since there are no circumstances where a (non resident) LL can give only 1 month notice

kamb1ng wrote: »

So I don't quite understand the seemingly default outcome of horror stories about tenants refusing to move out. Of course there are bad ones out there, but if the right checks are made (credit, background, etc) and I had a chance to review the profiles, doesn't that help to reduce the chance of getting a bad tenant?

How frequent do bad tenant situations actually happen? 10% or 90% of the time?

you are gambling, pure and simple. As you say there is a % chance that the tenant's circumstances will change after they move in and pass your checks. That may make them unwilling to move out, you won't know until it happens - which is of course not the majority of cases, but in the context of someone needing the property back on a specific date the risk should not be ignored.

lookstraightahead

Are you relocating through your present company?

itwasntme001

Wow - i have never seen so many one-sided and biased comments on this thread. Just incredible and does such disservice to the OP.


First of all section 21 has not been decided yet whether it will be scrapped or not. There is a lot of debate whether it will or not but lets assume the worse and it is scrapped.


The government will also strengthen another section called section 8 - to allow landlords to evict tenants more easily/quicker if the landlord decides he wants to move in or sell the property. So overall it is actually a benefit for the landlord and thus the OP should have no problem moving back in the property upon his return (i imagine the mortgage would need to remain residential so OP would need consent to let).


As for whether the OP will get bad tenants - i think someone gave the example of even a 10% chance of a bad tenant and thus the OP being homeless - thats just simply absurd. Firstly there is section 8. Then there is the fact that a 10% chance of having a bad tenant enough to cause missing rent or tenant not willing to move out, is just way too high. Please keep in mind that 90% of the time it is the tenant who decides he/she wants to move out.


Do not forget that the OP can be chosey about the tenant he wants. So all things considered i do not think that there is any problem with letting the property as long as the OP plans to keep the home long term, stays with the residential mortgage, picks the tenants carefully (good areas tend to attract the best tenants) and follow all the rules and laws about being a landlrod (made much easier by using a good estate agent), then it would be pretty silly not to let out the property to earn some income (as long as the post-tax income was enough to make it all worth while).


The risks mentioned in posts above mine are overstating it in a abusrd way and missing the positives such as section 8 changes that would more then offset section 21 scrapping.

itwasntme001

Also if OP is really worried about non payment of rent, he can get rent guarantee insurance which is pretty cheap as long as the tenant checks come through fine (if they didnt the OP wouldnt chose them anyway).

Marvel1

kamb1ng wrote: »

Thanks all for your warnings. I was a tenant myself for many years before buying my own place and was well aware that my landlord can ask me to evict with 1 month notice. This happened once when my landlord was selling the house and I obliged.

It's not a good start when this is wrong.

sammyjammy

If people here are on a downer about accidental landlords its because we see the fallout here, don't forget its not just bad tenants that refuse to move out after S21 its those that are relying on the council to rehouse them, this is becoming more and more of an issue and the council will consider these people intentionally homeless if they move out before they are pushed out.

Kad_Williams

Apologies that so many on here are being so negative. If you can afford have the place empty then that's something you can of course work out. There are, hidden among these replies, some helpful examples of what the financial implications might be. A mortgage broker would be really helpful in helping you understand what kind of arrangement you could wangle. My broker saw me in person for free to talk through my plans before I engaged her in any actual work.


As for the logistics of making the 2 year gap work: If you are not risk averse (which I am personally not) and ok with sustaining some losses along the way to make some sort of gain (i.e. getting this work) then maybe there is a way of managing the precarious situation.


Is there anyone at home who could help manage the tenancies? Maybe they can help choose the tenants and help pace the length of tenancies to avoid overlap with your coming back to the country?