Too risky to let out my flat ?

michael1234

I'm emmigrating, selling the family home but plan to buy a 2 bed flat just to keep a foothold in the UK property market. Initially was thinking of letting it out but it seems incredibly risky to do so? As I understand it, a tenant for whatever reason could decide to stop paying rent and/or trash the place and it would take me a year or more of stress to get them out followed by a costly renovation.

It would seem a shame to leave a place empty and unused when housing is in such demand not to mention the rent would obviously be handy. Can I mitigate the risk with insurance or some other way or is there always going to be a risk of catastrophe in renting out one property ? Presumably the very wealthy can easily mitigate the risk by letting out dozens of properties but I'm not in that league.

Crashy_Time

Better buying an ETF if if you can find one, the absent landlord idea is not a good one IMO, but I`m sure owners of 2 bedders will be glad of any interest you can give them.

user1977

What are your reasons for wanting to "keep a foothold in the UK property market"? Like any other business, you can't insure your way out of every risk.

Grumpy_chap

michael1234 said:

a tenant for whatever reason could decide to stop paying rent and/or trash the place and it would take me a year or more of stress to get them out followed by a costly renovation.
Can I mitigate the risk with insurance 

You can insure against the financial risk of both events.  You will have a managing agent to take care of the practical arrangements.  These two steps will reduce, but not totally eliminate the stress in the event that the events occur.

michael1234 said:

It would seem a shame to leave a place empty and unused when housing is in such demand 

If you own a property but leave it empty for extended periods, how will you insure that? 
How will you protect against squatters? 
How will you protect against utility failure / damage?
How will you stop the post and junk mail just piling up?

Thrugelmir

A long term empty property will be difficult to insure. Can you arrange for frequent inspections? 

AnotherJoe

I have seen councils who will take on a property from a landlord for a fixed period say five or ten years and will contract to give it back in good condition at the end. Don't know how you go about finding those though but they've been mentioned in threads in here. Obviously you trade off a lower rent for a guaranteed long term income and as as it's a  council you have got a guarantee of getting it fixed up should any serious damage occur. 

[Deleted User]

There's a tax aspect as well, isn't there, if a foreign-domiciled landlord rents out a UK property?

[Deleted User]

It’s more risky to leave a property empty than to let it out. How would you know about repair/maintenance issues or keep the property ventilated and heated sufficiently to avoid mould and burst pipes? Insurance will also be difficult to obtain if you don’t have someone to regularly check on the property. 

AdrianC

Poster_586329 said:

There's a tax aspect as well, isn't there, if a foreign-domiciled landlord rents out a UK property?

Absolutely.
https://www.gov.uk/guidance/paying-tax-on-rent-to-landlords-abroad

eddddy

AnotherJoe said:

I have seen councils who will take on a property from a landlord for a fixed period say five or ten years and will contract to give it back in good condition at the end. Don't know how you go about finding those though but they've been mentioned in threads in here. Obviously you trade off a lower rent for a guaranteed long term income and as as it's a  council you have got a guarantee of getting it fixed up should any serious damage occur. 

When I last looked at one of these a few years ago, there were some nasty small print issues (but they may vary by council) - plus some other issues...

• Compensation for damage is capped at 2 months rent - so if a tenant trashes the place and does £5k of damage (e.g. breaks white goods, kicks holes in walls, damages bath suite or kitchen units) you might only get £1k in compensation.

• Council refuses to do no-fault eviction (s21) on principle - so they won't evict their tenant at the end of the 5 year (or whatever) lease

• Mortgage lenders may not allow this type of arrangement

• You have no control over the choice of tenants - so your neighbours might end up hating you.

In relation to the last point, an LL told me of their experience - they were an owner/occupier who moved out and did a similar scheme with the council. The council's tenant started dealing drugs from the flat. Resulting in unpleasant visitors to the flat. A local mini crime-wave - neighbours cars broken into, antisocial behaviour. Drugs paraphernalia discarded in meter cupboards in the communal area, etc.

The LL's former neighbours tracked down the LL and started giving them a very hard time about it.

Another LL who did a similar leasing arrangement with a housing charity heard that his front door was being kicked-in periodically during police raids. The housing charity repaired the front door, but he's still wondering what condition his flat will be in when he gets it back.

AnotherJoe

Oh dear not the panacea i was thinking of then !