Rental Property - Someone Want's To Pay Me Good Money Sound Dodgy!

mrsmith68

RAS said:

If it's split into rooms and used for "exempt" accommodation, maybe £200 per week per person. So perhaps £5-6K per month?

sound's great at that rate could mange to pay the mortgage of in a few years depending on costs to setup how would one go about setting something like this up would you know?, I would assume they would need a bathroom and a living room? own kitchen etc? 

london21

mrsmith68 said:

theartfullodger said:

He'll probably pack it with many exploited workers charging them a fortune.  You'll be liable for an unlicensed HMO.

He assumed you didn't understand the game from your paper advert. ,

Speak to a couple of local agents see what they suggest.  Look on Zoopla and Rightmove see what market rents are.

But yes, possible cannabis farm or brothel.

Avoid his kind offer.

to be honest I don't understand the game, as mentioned the previous family who we had there 5+ years always paid on time etc no problems kept the house in tip top shape, unfortunately they have had to relocate due to work commitments, he did mentioned that the local council would provide people to live in the property could do with the extra money! but if its dodgy etc I don't think that £350 would be worth the extra trouble it comes with!

4 bedroom for £650 a month is realy cheap.

what is the going rate in the area? does £650 cover all your costs?

The council does rent room by room HMO property as well for people who need housing.

do your due diligence before handing your property for 5 years. I personally will not sign a 5 years contract, max should idealy be 3 years.

Is your property mortgaged? read the terms and condition.

mrsmith68

london21 said:

mrsmith68 said:

theartfullodger said:

He'll probably pack it with many exploited workers charging them a fortune.  You'll be liable for an unlicensed HMO.

He assumed you didn't understand the game from your paper advert. ,

Speak to a couple of local agents see what they suggest.  Look on Zoopla and Rightmove see what market rents are.

But yes, possible cannabis farm or brothel.

Avoid his kind offer.

to be honest I don't understand the game, as mentioned the previous family who we had there 5+ years always paid on time etc no problems kept the house in tip top shape, unfortunately they have had to relocate due to work commitments, he did mentioned that the local council would provide people to live in the property could do with the extra money! but if its dodgy etc I don't think that £350 would be worth the extra trouble it comes with!

4 bedroom for £650 a month is realy cheap.

what is the going rate in the area? does £650 cover all your costs?

The council does rent room by room HMO property as well for people who need housing.

do your due diligence before handing your property for 5 years. I personally will not sign a 5 years contract, max should idealy be 3 years.

Is your property mortgaged? read the terms and condition.

have not checked the going rate at the moment but will be, it was covering the mortgage with a little left over for fuel, with inflation around the corner need to re let or figure out a way to generate more rent legally or I would probably end up paying out of my pockets if the mortgage goes up, 


have been researching HMO, if I was to do this I would need to fork money out to split etc separate entrance bedroom  toilet kitchen etc  another poster mentioned exempt housing which would be great but I don't know much and don't want to get into something I'll regret later on 

dimbo61

Wow do you still think this is a good idea.
You can rent out your family home to Mum and dad and their 7 children and the council or anyone else can't object to that.
Now if you rent out your 4 bed house to 3 or more unrelated tenants it becomes a small HMO and to 5 or more tenants it's a large HMO which requires a licence.
You could have tenants in the property for 2/3/4 years but if you don't have a licence they could all claim a Rent Repayment Order and YOU have to refund the total rent for all the time you have rented to them ££££££.
Your HMO licence means an inspection and room sizes, number of bathrooms, kitchen size, 2/3/4 ovens and sinks. 
Fire safety, mains wired smoke alarms, turn locks, fire doors, emergency lighting, Fire safety inspections ! 
Don't get your fingers burnt YOUR responsible not your agent. 

macman

How can you even contemplate the investment and resources required to convert it into an HMO, if you haven't even 'checked out the going rate at the moment' for re-letting it as a single dwelling?  You freely admitted that until this post commenced, you didn't even know what an HMO was, now you want to convert it to one.
We have no idea where you are, but £650 seems way under the norm. In London a 4 b/r property would be fetching £2000 a month. So I strongly suggest you go and research the local market. If you have had long term tenants, have you ever increased their rent to current market levels?
dimbo61 has offered some excellent advice.
NB: You presumably have a BTL mortgage already, but I doubt that it will be valid for you to run an HMO, because the risk of damage or loss is so much higher when in multiple occupation. So you would need to convert to a more expensive HMO mortgage.

deannagone

I believe in keeping things simple.  There seems to be a lot you don't know.  Check today, what 4  bed houses normally rent for.  Then you can establish what you can get for the property without making any changes - bear in mind that a modern property with a recent refurb (rather than unchanged since granny died lol) will bear a higher rental charge. Five minutes on RightMove looking for 4 bed rentals in your area should help with that, or looking in an EA window (one that does lettings obviously).

If you want to look into going into HMO - google your council name and HMO - they may have a policy.  Or phone and ask.

Neither investigation is a huge piece of work and you will gain vital information.

The major problem with the offer you have had is you know nothing about this person, and you will be basically signing your property over for 5 years.  It sounds like a 'commercial let'.  Which would create all sorts of problems for you if it goes wrong and the person pays rent the first month and never again (i.e. could take you years to get the property back with damage being caused and no rent income). 

I'm sure I've seen a few Nightmare Tenants Slum LL episodes describing this scenario.  Very difficult to get the property back because of the long time you sign the property over for. 

Here you go, explained very clearly in this episode start watching at about 26 mins https://www.channel5.com/show/nightmare-tenants-slum-landlords/season-6/episode-8

TripleH

Plus what's to stop this guy becoming incommunicado after 4 months and you're left with no income but can't remove the tenants and if he is dodgy also left to pay back rent you never received plus what the tenants paid.

This guy has to probably keep things in place for 4 months to get the property filled and running and then can bank on another few months after he's flittered off minimum of money in with no outlay.

Honestly, I'd find a tenant now at an appropriate market rate for it to get an income coming in whilst you decide if you will go down the HMO route.

If you do, you will expect to have to pay a lot in advance to meet the requirements and at present what is it like in your area securing a tradie for jobs?

fourmarks

This is either a wind up or a lost cause.

Zerforax

That you are trying to skim on estate agent costs/fees when you seem to have little to no experience of being a landlord is a concern.

Yes the offer you've had is too good to be true. Might be good for a few months to start but I expect there will be a new thread in 6-9 months asking for help with an even bigger problem then.

macman

Where in the UK could you not get near £1K a month for a 4 b/r property let as a single unit, assuming it's in good order?
And the capital expenditure required to convert it properly to an HMO (as opposed to a bodged job with cardboard subdivisions and dodgy wiring) would probably wipe out any profits from the first few years).