Moving in with partner, and renting out my place

dylcha

My partner and I have our own flats, each with a mortgage under our own names. We’ve made the decision that we want to live together which we’re incredibly excited about. 

We’ve decided that I will move in with her and I will pay her rent (which is effectively half the bills inc. mortgage, gas, electricity, water, WiFi etc) but she will be the only named person on these bills - we’re both happy with this.

However, I will be renting out my flat which will cover the mortgage payments along with ground rent and service charge. But I want to know if she would be entitled to any portion of that rental income (after bills), or if it’s fair that the rental income should just be for me. 

I would like to at least have an ‘emergency fund’ should there ever been a problem with the flat. But I’m not sure what to do after I have built that up. 

Thanks!

elsien

Your flat, your income, your liability if something goes wrong and you end up out of pocket. Have you properly looked into what being landlord involves - all the legislation and responsibilities? And whether or not you need to change to a buy to let mortgage?

I’d also query why are you are paying half her mortgage when she is the one whose equity in the property will be increasing?

Section62

dylcha said:

...

However, I will be renting out my flat which will cover the mortgage payments along with ground rent and service charge. But I want to know if she would be entitled to any portion of that rental income (after bills), or if it’s fair that the rental income should just be for me. 

I would like to at least have an ‘emergency fund’ should there ever been a problem with the flat. But I’m not sure what to do after I have built that up.

Have you checked the mortgage company will allow you to let the flat.  Ditto the freeholder/management company (if applicable).

Having paid all your costs as a landlord (and paid tax on your income) do you know how much you will have left?  It isn't beyond possible you'll end up with less than what you pay your partner in rent(+bills).

Moving in together where one is the owner of the property is fraught with potential problems for the future - your partner possibly has greater risk here than you do.  Make sure your agreement is documented in writing and covers everything that could realistically happen in the future.  E.g. if you break up you won't necessarily be able to move back into your tenanted flat anytime soon.  What happens to you and your stuff in the interim?  E.g. Don't rely on an informal agreement you'd leave your stuff at your partners until you get sorted.

gwynlas

She will not have a financial claim on your property but you will on hers if you are contributing to the mortgage placing her at a disadvantage. Are you applying for a BTL mortgage? If your rental income covers mortgage , service charges and ground rent will there be much left over after paying tax? You could use this to build up a pot towards future house purchase. If you are better off financially than her you could contribute more to the household expenses minus the mortgage payments so that she retains her securrity should you split up.

hazyjo

gwynlas said:

She will not have a financial claim on your property but you will on hers if you are contributing to the mortgage placing her at a disadvantage. Are you applying for a BTL mortgage? If your rental income covers mortgage , service charges and ground rent will there be much left over after paying tax? You could use this to build up a pot towards future house purchase. If you are better off financially than her you could contribute more to the household expenses minus the mortgage payments so that she retains her securrity should you split up.

100% agree. Don't pay half the mortgage, unless she wants you to have a claim on her property.

It might be cheap for you, but she'll also have loads extra per month, even if you're just paying her a few hundred quid. As suggested, if you're careful with what's left, this could go towards a future joint property purchase. You lose all security, she can basically kick you out and you don't have rights to stay. It will take you 2+ months to evict tenants (up to a year or so if they choose not to go).

_Penny_Dreadful

dylcha said:

My partner and I have our own flats, each with a mortgage under our own names. We’ve made the decision that we want to live together which we’re incredibly excited about. 

We’ve decided that I will move in with her and I will pay her rent (which is effectively half the bills inc. mortgage, gas, electricity, water, WiFi etc) but she will be the only named person on these bills - we’re both happy with this.

However, I will be renting out my flat which will cover the mortgage payments along with ground rent and service charge. But I want to know if she would be entitled to any portion of that rental income (after bills), or if it’s fair that the rental income should just be for me. 

I would like to at least have an ‘emergency fund’ should there ever been a problem with the flat. But I’m not sure what to do after I have built that up. 

Thanks!

Why would she be entitled to any of the rent?  Legally she isn't entitled and since you'll be covering all the mortgage with your rental income she will not be building up a beneficial interest in your property.  By paying half her mortgage you'll be building up a beneficial interest in hers though.

dylcha

elsien said:

Your flat, your income, your liability if something goes wrong and you end up out of pocket. Have you properly looked into what being landlord involves - all the legislation and responsibilities? And whether or not you need to change to a buy to let mortgage?

I’d also query why are you are paying half her mortgage when she is the one whose equity in the property will be increasing?

Thanks! And yes, I am aware of landlord responsibilities etc. I won't be paying half her mortgage. Just 'rent' which helps contribute to bills

dylcha

Section62 said:

dylcha said:

...

However, I will be renting out my flat which will cover the mortgage payments along with ground rent and service charge. But I want to know if she would be entitled to any portion of that rental income (after bills), or if it’s fair that the rental income should just be for me. 

I would like to at least have an ‘emergency fund’ should there ever been a problem with the flat. But I’m not sure what to do after I have built that up.

Have you checked the mortgage company will allow you to let the flat.  Ditto the freeholder/management company (if applicable).

Having paid all your costs as a landlord (and paid tax on your income) do you know how much you will have left?  It isn't beyond possible you'll end up with less than what you pay your partner in rent(+bills).

Moving in together where one is the owner of the property is fraught with potential problems for the future - your partner possibly has greater risk here than you do.  Make sure your agreement is documented in writing and covers everything that could realistically happen in the future.  E.g. if you break up you won't necessarily be able to move back into your tenanted flat anytime soon.  What happens to you and your stuff in the interim?  E.g. Don't rely on an informal agreement you'd leave your stuff at your partners until you get sorted.

Yes, I will sort out the rental of my place legitimately. My main question was on whether the rental income from my place should be split between us. Thanks

dylcha

hazyjo said:

gwynlas said:

She will not have a financial claim on your property but you will on hers if you are contributing to the mortgage placing her at a disadvantage. Are you applying for a BTL mortgage? If your rental income covers mortgage , service charges and ground rent will there be much left over after paying tax? You could use this to build up a pot towards future house purchase. If you are better off financially than her you could contribute more to the household expenses minus the mortgage payments so that she retains her securrity should you split up.

100% agree. Don't pay half the mortgage, unless she wants you to have a claim on her property.

It might be cheap for you, but she'll also have loads extra per month, even if you're just paying her a few hundred quid. As suggested, if you're careful with what's left, this could go towards a future joint property purchase. You lose all security, she can basically kick you out and you don't have rights to stay. It will take you 2+ months to evict tenants (up to a year or so if they choose not to go).

Thanks. Everything else has been discussed re. her property and we're happy with it.  My main question was on whether the rental income from my place should be split between us. 

hazyjo

dylcha said:

hazyjo said:

gwynlas said:

She will not have a financial claim on your property but you will on hers if you are contributing to the mortgage placing her at a disadvantage. Are you applying for a BTL mortgage? If your rental income covers mortgage , service charges and ground rent will there be much left over after paying tax? You could use this to build up a pot towards future house purchase. If you are better off financially than her you could contribute more to the household expenses minus the mortgage payments so that she retains her securrity should you split up.

100% agree. Don't pay half the mortgage, unless she wants you to have a claim on her property.

It might be cheap for you, but she'll also have loads extra per month, even if you're just paying her a few hundred quid. As suggested, if you're careful with what's left, this could go towards a future joint property purchase. You lose all security, she can basically kick you out and you don't have rights to stay. It will take you 2+ months to evict tenants (up to a year or so if they choose not to go).

Thanks. Everything else has been discussed re. her property and we're happy with it.  My main question was on whether the rental income from my place should be split between us. 

Indeed - and that's been answered. But it's a forum and you'll get advice on things you may have missed (whether you've specifically asked for it or not). You said in your opening post that the 'rent' included half the mortgage, then later said that you won't be paying half her mortgage. So not sure which it is... trying to save you money here lol. Hopefully you'll live happily ever after (together), but that's often not the case. I have the t-shirts to prove it.

Section62

dylcha said:

hazyjo said:

gwynlas said:

She will not have a financial claim on your property but you will on hers if you are contributing to the mortgage placing her at a disadvantage. Are you applying for a BTL mortgage? If your rental income covers mortgage , service charges and ground rent will there be much left over after paying tax? You could use this to build up a pot towards future house purchase. If you are better off financially than her you could contribute more to the household expenses minus the mortgage payments so that she retains her securrity should you split up.

100% agree. Don't pay half the mortgage, unless she wants you to have a claim on her property.

It might be cheap for you, but she'll also have loads extra per month, even if you're just paying her a few hundred quid. As suggested, if you're careful with what's left, this could go towards a future joint property purchase. You lose all security, she can basically kick you out and you don't have rights to stay. It will take you 2+ months to evict tenants (up to a year or so if they choose not to go).

Thanks. Everything else has been discussed re. her property and we're happy with it.  My main question was on whether the rental income from my place should be split between us. 

Unless one or both of you already have the t-shirts hazyjo refers to then the odds are not good that you've already covered 'everything' in your discussions - hence the advice people on this forum will attempt to give will be wider than the narrow question of splitting the rental income (if any) on your flat.

There are endless traps both of you can fall into when adopting the arrangement you're proposing.  And really easy to overlook them in the excitement of moving in together.