First time potential landlady

Lauramatt83

Hey all, due to a change in life circumstances, I’m considering renting out my own home but honestly don’t know where to start! Based in Northern Ireland. 

I would appreciate any advice you can offer on any of the below points; 

Compliance - gas certificate in place, do I need a fixed wire test carried out? PAT testing? Anything else? 

Mortgage - currently on a *great* fixed term rate, I’ve been told I would need to change to a buy to let mortgage, is this right? Guessing I would lose my very nice rate if I changed, is there any way around this?! 

Insurance will be easily sorted. I know a rental deposit scheme would need to be implemented also. 

Management - I’m hoping to have an estate agent act as property manager also. Any hints and tips when arranging this? What to expect from this agreement/any pitfalls to avoid? 

Rental agreement - is this something you can DIY (with good research) or would you recommend this being drafted by a solicitor? 

If you think I’m missing anything glaringly obvious I would love to know! 

Thanking you all in advance from a very confused forumite 

propertyrental

https://www.nidirect.gov.uk/articles/private-rent-and-tenancies

https://www.northernireland.gov.uk/news/new-laws-mean-changes-private-tenants-and-landlords

https://www.nidirect.gov.uk/articles/landlord-and-tenant-obligations

This stickie is England /Wales centric but includes useful  indo:

https://forums.moneysavingexpert.com/discussion/5180214/tenancies-in-eng-wales-guides-for-landlords-and-tenants/p1

caprikid1

I would have a deep think as to whether this is the right move.

"I’m considering renting out my own home" You need to distance yourself from it as much as you can and consider it now an investment, you will never be happy at how other people look after "Your Home".

Also with the current legislation and tax regime if this is potentially short term you may be better of leaving it empty or selling.

Unfortunately the government does not encourage small landlords with single homes like yours now, we are seeing a dramatic shortage of quality housing at affordable prices because it is rarely worth the hassle of renting a home that has a mortgage now especially if you are 40% tax payer.

On the plus side if you have no mortgage and can tollerate the hassle rents are going sky high as the government is discouraging landlords but not filling the void !.

Grumpy_chap

Lauramatt83 said:

Hey all, due to a change in life circumstances, I’m considering renting out my own home but honestly don’t know where to start! Based in Northern Ireland. 

I would appreciate any advice you can offer on any of the below points; 

Compliance - gas certificate in place, do I need a fixed wire test carried out? PAT testing? Anything else? 

Mortgage - currently on a *great* fixed term rate, I’ve been told I would need to change to a buy to let mortgage, is this right? Guessing I would lose my very nice rate if I changed, is there any way around this?! 

Insurance will be easily sorted. I know a rental deposit scheme would need to be implemented also. 

Management - I’m hoping to have an estate agent act as property manager also. Any hints and tips when arranging this? What to expect from this agreement/any pitfalls to avoid? 

Rental agreement - is this something you can DIY (with good research) or would you recommend this being drafted by a solicitor? 

If you think I’m missing anything glaringly obvious I would love to know! 

Thanking you all in advance from a very confused forumite 

Your first step should be finding a good local Letting Agent.
Given you have limited knowledge on the process, use a Full Management level of service.
The LA should then be able to advise with regard to the rental agreement, deposit scheme, gas and electric certificates, and insurance (though they may not be the most competitive for the insurance).

You will require Consent to Let from the mortgage provider.  This may or may not mean that you lose the current fixed rate - it varies between lenders.

Once you have the above, you can make an assessment around the financial model and whether it will work (or not).

saajan_12

Lauramatt83 said:

Hey all, due to a change in life circumstances, I’m considering renting out my own home but honestly don’t know where to start! Based in Northern Ireland. 

I would appreciate any advice you can offer on any of the below points; 

Compliance - gas certificate in place, do I need a fixed wire test carried out? PAT testing? Anything else? - I won't comment on this as NI rules may be different to E&W which I know more about. However I'd check for any requirements around deposit protection, energy performance, gas / electric safety, and licencing for the number of tenants you'll have. 

Mortgage - currently on a *great* fixed term rate, I’ve been told I would need to change to a buy to let mortgage, is this right? Guessing I would lose my very nice rate if I changed, is there any way around this?!  - ask your lender.. they may offer consent to let on the current deal for a limited period. However after that, you may well have to switch. 

Insurance will be easily sorted. I know a rental deposit scheme would need to be implemented also. - remember you need landlords insurance, which may be different to usual home owners insurance as its a 3rd party occupying and monitoring the home. 

Management - I’m hoping to have an estate agent act as property manager also. Any hints and tips when arranging this? What to expect from this agreement/any pitfalls to avoid? - think about how involved you want to be in selecting tenants and authorising repair spends. Leaving it all to the agent may be less hassle, but they're less affected by say short vs long term tenants, affordability, getting the best price for repairs etc.
Also when comparing fees and commission, ask about the starting fees eg referencing, inventory etc as these are no longer chargeable to the tenant. 

Rental agreement - is this something you can DIY (with good research) or would you recommend this being drafted by a solicitor? - up to you.. there are model agreements produced by the government and available to buy online, so you could meticulously go through a few of those and ensure all eventualities are covered. 

If you think I’m missing anything glaringly obvious I would love to know!  - whether letting is really the best option, considering the tax inefficiencies, difficulty to evict if you need to move back in, learning curve and penalties if you make a mistake, etc etc. 

Thanking you all in advance from a very confused forumite 

Comments in line.. on the last point of what might be missed.. you don't outline the full reasoning, so you may have already thought of this, but I'm just including in case not. 

Stubod

..if you go through an agent and use the "full management" option, (costs around 10%/15% of your rental income), they should take care of everything for you, and I would strongly recommend this option if you are unsure.

However, are you really sure you want to become a landlady?...what is the underlying reason for this? Not something I would recommend, far better to sell...IMHO.  

Lauramatt83

Thank you all, you’ve given me a lot of food for thought! 

Long story short my partner and I are planning to move in together so I’m considering what to do with my house. Selling is a potential option but possibly when house prices are a bit better  - I’ve invested a lot  in the house (it was a fixer upper) so if I were to sell, I would want to maximise on profit. Having said that, I haven’t had any estimates carried out so might also see what this looks like. 

Selling also seems so final and it took long enough to get onto the housing ladder in the first place! 

Considering renting it out as a mid to long term option, however I’ve gone down lots of rabbit holes when researching so I’m very grateful for all the help. Having a full service letting agent would be my preference to make life easier but need to work out the calculations etc and see how viable renting will be. 

So much to think about! 

Olinda99

I have looked at letting in detail and here are my thoughts

firstly if you let it fully managed through a good agent where they do pretty much literally everything (a sort of let and forget arrangement) then you should be able to do it without too much hassle. they will charge you for it but then of course you will not have any workload or worries

however you should think about the reason for doing it. if it's to make money then you probably will be better off just selling the house and putting the money into a savings account as the returns on buy to let these days are very very variable but not huge. Do the calculations.

if the reason is an emotional attachment to the house and you can't bear to let it go then again I would try and get over this and consider selling

if on the other hand the reason is a sort of safety net - a bolt hole just in case things go wrong with your move in with your partner than this could be a valid reason to keep the house for a couple of years let it out through an agent

BungalowBel

 Several things I would say: do not expect tenants to look after your property as you do, remember that while they are under contract then it is their home, and that they may not leave when you want them to.

theartfullodger

Do you have the financial AND emotional reserves to cope with tenant-from hell (or agent-from...) and eg being contacted pretty much anytime at your home or say having no rent for 7 months whilst having to pay mortgage and legal fees plus dealing with court etc?

Training in being a landlord is usually cheaper than the alternative, as i know to my cost 

Artful, Landlord since 2000

Lauramatt83

theartfullodger said:

Do you have the financial AND emotional reserves to cope with tenant-from hell (or agent-from...) and eg being contacted pretty much anytime at your home or say having no rent for 7 months whilst having to pay mortgage and legal fees plus dealing with court etc?

Training in being a landlord is usually cheaper than the alternative, as i know to my cost 

Artful, Landlord since 2000

Thanks Artful, sounds like you’ve had a pretty negative experience with landlording, nightmare scenario perhaps. Selling may well be the better option but I’ll do my due diligence into all options!