Renting out a home for a novice

Debtfree2024

Hi,

In the middle of next year (around June)  I am planning to rent out my 3 bedroom semi-detached home in order to move in with my partner who also owns his own home. There will be a longer term plan for me to be added to his mortgage down the line.

I have never done anything like this before, I will 100% be doing this through an agent but I haven’t decided which one yet. I am reading up online and trying to get my head around the extra responsibilities of being a landlord and also paying additional tax etc. 

I am currently on a fixed rate mortgage which ends in August 2024. My property is worth around £150,000, I currently pay £428 towards the mortgage each month and I have lived here since 2021, this is my first home. I am also not sure whether it would be advisable to ask my current provider for permission to rent out before the end of my fixed term contract (I would then be going onto a variable rate) or just wait until the end of my contract and remortgage to a buy to let? 

Please can anyone who is experienced in this field provide me some pointers on the basic things I need to know and any useful resources, how to find a good agent and also advice on my mortgage as above? I appreciate it’s asking for a lot of information but any useful advice or resources would be great. 

loubel

 You will need consent to let or to remortgage to BTL before you rent it out. Is it going to be financially viable? BTL products come with higher fees and interest rates than residential mortgages and you have to factor in tax, agent fees, maintenance, voids, damage etc as well.

A good starting point would be the stickied post in this forum - 

https://forums.moneysavingexpert.com/discussion/5180214/tenancies-in-eng-wales-guides-for-landlords-and-tenants#latest

Joining a landlords association may also be wise.

Remember you are starting a business by renting out a house and should do your homework beforehand.

theartfullodger

Do a course in how to be a landlord eg NRLA run them (which country eg Wales, NI )?

Suggest keep viewing forums like this one and learn (both from landlords AND tenants#.

With over 100 (England) Acts and regulations to comply with IMHO most landlords, including me (LL since 2000) will get things wrong from time to time.

Do you have the financial AND emotional reserves to cope with tenant-from-hell  - or agent-from who is entitled to your actual address and may raise issues whenever they wish.

Just because there's an agent, remember YOU remain liable for all issues.

Most years i make money from renting - but not always.

Are you good a record keeping (income tax AND CGT etc etc?).  There are at least 10 taxes a landlord may have to pay.

Good luck ! (I'm still learning)

GrumpyDil

And be careful if you think you will retain any emotional attachment to the house. 

SiliconChip

Is there a reason why you're planning to start a letting business rather than just selling the house? It may well end up costing you money to keep the house, so why not sell it and put the money in a high interest account.

RHemmings

loubel said:

Remember you are starting a business by renting out a house and should do your homework beforehand.

It amazes me how many YouTube videos there are which claim to be 'The Ultimate Guide to Being a Landlord' or similar, which are less than ten minutes long. For many businesses, people will have a qualification before entering the profession. 

njkmr

As a landlord for the last twenty+ years, I can say i have not had an agent who has earned their fee yet.
They will take your money each month, then phone you when there is a problem with the property.
If they organise a repair they add on their percentage, usually 10% just to send someone to do it.
So in effect you still end up with the problems. And a greater cost to repair.
I have had great tenants and I've had some real nightmare tenants. I have had more than one who has disappeared owing thousands in rent. Again the agent will basically leave you to seek solicitor advice and struggle to remove them.
I have had properties trashed , I have had tenants who want you there all the time doing repairs they have contributed to causing.
It is not for the faint hearted believe me. I would not recommend it with all the hassles and now the rules are constantly being changed and not in favour of the landlord. Less attractive tax wise etc.
I am in the process of selling up as are other landlords I know.
Put your money somewhere else is my opinion and avoid the aggro.
Regards
Rob.

Olinda99

don't let it out, sell it

RHemmings

Speaking as a tenant, the current agents managing the house I'm living in seem to be doing a great job. I can't comment on them adding percentages to repairs etc, but they certainly seem on the ball, and both proactive and responsive depending on the circumstances. It might help that their office is about 250 metres away from the house I live in. 

lookstraightahead

You're starting a business, perhaps go on a course on how to run a business, and then one specifically for landlords. You will need to put time aside to run your business. It won't be your home, it will be an asset.
you are still ultimately responsible for your business, the agent is merely 'an employee'. 

secla

Debtfree2024 said:

I am currently on a fixed rate mortgage which ends in August 2024. My property is worth around £150,000, I currently pay £428 towards the mortgage each month and I have lived here since 2021, this is my first home. I am also not sure whether it would be advisable to ask my current provider for permission to rent out before the end of my fixed term contract (I would then be going onto a variable rate) or just wait until the end of my contract and remortgage to a buy to let? 

How much equity do you have in the house ? I believe a lot of BTL products are 25% + 
You say you pay 428 towards a mortgage, Do you own the house yourself or with someone else ?