Letting the house to a private care company

Crosby

Mixed emotions here but my mums passed away 7 months ago, left me a house (only a small 2 bed terraced but mortgage free) and I don’t feel like I am ready to sell it yet so decided to let it out.

Never realised how hard it is to choose the tenants. I signed up with a well know high street estate agents and the viewings were a success and I ended up with 3 candidates after a couple of days it being on the market.

One of the tenants happens to be a private care company who would like to place their patient in the house with a live in carer and they will
Pay the rent themselves (not through council). They will require minor mods to the property (handrail, doors opening outwards) but nothing major. Now decision time and I can’t seem to figure out what’s bothering me about this arrangement, maybe it being private company and if it were to go bust I would never find the end of who would be responsible in court.

Any help please? Am I fretting in vain? Or is there something to be wary about and I should lean towards more traditional arrangement?
Not really in a rush to let it if I am honest, so perhaps I should just wait and see if can get my ideal tenant (nooks is ever ideal though I understand that) -
Thank you all

phill99

Run a credit check on them the way you would a normal tenant.


Are they paying an enhanced rent if you are undertaking the modifications?

Socajam

If you are having doubt, don't do it. Obviously your subconscious is telling you something that is not visible.
You don't want to be tied to something that will bring you problems in the long run.
Have you done a thorough check on the company? Check for reviews online, even though they are not 100% accurate, as companies can write their own reviews.
I rented out my property through an estate agent for 20 years and have only had one bad tenant - unpaid for only 3 months. Other than that my mortgage was paid off through renting from 1990 until completion in 2015.

AdrianC

Crosby wrote: »

Mixed emotions here but my mums passed away 7 months ago, left me a house ... and I don’t feel like I am ready to sell it yet so decided to let it out.

This bit makes my hair stand on end.

You're too emotionally involved with it being "your mum's house" to want to sell it - but you're quite happy for tenants to live in it. Tenants who not only simply don't have your emotional involvement, but actually have less emotional involvement than whoever buys it from you. And you're going to have to deal with the aftermath of that...

Please reconsider. It's not too late. This route just has so many pitfalls for you ahead. You're going to be constantly fretting that they aren't treating "mum's house" right - either you're going to have to bottle that up, or you're going to be sorely tempted to have words in a way that quite simply will make you a terrible landlord... Remember, residential letting is a business. No more, no less. Your emotional involvement with the your business asset needs to be on that level.

Emotion aside, is it even a good investment decision?

winspiration

A friend of mine let a bungalow (which had belonged to her parents) in similar circumstances - a care company which placed two clients in the house with a team of carers, after making some agreed modifications. The two clients were there for over ten years and there was never any issue with rent payments. However, there was a lot more wear and tear than with previous tenants, partly because one of the clients used a wheelchair and collided often with walls, fixtures & fittings. The care company allegedly had it's own maintenance people, but she would get frequent calls to replace damaged items, for example the toilet had to be replaced several times. They always wanted her to replace at her expense too - so there would be a wrangle to sort that out afterwards. The priority of the team of carers was obviously (and quite rightly) caring for their clients, keeping the property in good condition was not high on their priority list.

Slithery

If you are letting the property to a company rather directly to private tenants then it won't be an AST, instead it will be a commercial tenancy - meaning you'll miss out on all of the legal protections that regular landlords get.

FlameCloud

I'd also really check your landlords buildings insurance - the normal high street type policies will require a domestic AST tenancy typically.

theartfullodger

Only ( ! ONLY !) do it if you get personal guarantees for rent & damage from at least two directors who you have credit-checked. They must own property you can collect any debt from.

But don't do it.

Too many emotional ties: Sell the place, keep the happy memories, don't let something damage those memories.

millie

How well do you get on with the neighbours. I only ask because I have a semi detached house and the adjoining house is used for that purpose. The owners passed away 4 years ago and their son lives there with full time carers. He 59 and has downs syndrome and apparently dementia too. The house was left to his sister so he has no assets the care bill is funded by the Social Services. He is an absolute nightmare doesn't speak never has done. He can do nothing for his self. All he does is shout and make weird noises day and night. never goes out and we are stuck with it. We are in our late seventies and have considered moving and down sizing. We have been told by local estate agent that we would struggle to find a buyer because we would be obliged to tell potential buyers about the problem. Unfortunately we are stuck with the problem there is nothing we can do. It is called care in the community.

xylophone

You'll constantly worry about how "mum's house" is being treated.

In your place I think I'd cut the tie and sell.

G_M

Slithery wrote: »

If you are letting the property to a company rather directly to private tenants then it won't be an AST, instead it will be a commercial tenancy - meaning you'll miss out on all of the legal protections that regular landlords get.

This.

I'd also really check your landlords buildings insurance - the normal high street type policies will require a domestic AST tenancy typically.

and this.


They are not show-stoppers, but you need to understand the legal implications.

If you go down the 'commercial tenancy' route, get a good commercial solicitor to help with the contract eg ensuring the tenant (care company, not occupant) is responsible for all repairs and maintenance, and for returning the property in the condition it was in when they took it on. Build in an inspection routine so you can monitor, and bring to their attention repairs that they should be doing.


I assume you considered tax?

I link my guidance to landlords below, but be aware this is written for landlords granting an AST, not a commercial tenancy.


* New landlords (1):advice & information :see links in next post

* New landlords (2): Essential links for further information

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