Letting out house while abroad for 1 year

Rachel100392

Hi All,

After a bit of advice, so heres a bit of background:

I am looking to have a career break and work temporarily abroad for 12 months teaching english, I have only owned my house for just over a year and I love it and have put a lot of money into improving it so I really don't want to part with it. I also have a ltd company where I currently have a rental property, and due to my experience with letting to long term tenants I am worried I could end up with someone who could trash my house, therefore I think the best idea could be to rent out as short-term / holiday let instead, and I have found a company which could manage this on my behalf. 

However, I am worried that if my house doesn't receive enough bookings, my mortgage and household bills won't be covered, but if i could offset these with the rental income via my ltd company this would give me more peace of mind. So my question is, is this possible? can I manage the finances for my house through my limited company without transferring the property? And what sort of implications will this have on tax, insurance etc.

TIA

caprikid1

"who could trash my house, therefore I think the best idea could be to rent out as short-term / holiday let instead, and I have found a company which could manage this on my behalf. "

You are worried one tenant could trash the property but think hundreds of tenants will be fine ?

You will be lucky either way if this ends well, when the S21 ban comes in place people in similar situations certainly won't bother.

Rachel100392

Previous long term tenants have left my rental properties infested with fleas, smelling of dog and cat !!!!!!, absolutely destroyed the garden, didnt report a leak which nearly had the ceiling caving in, yellowed the ceilings even though it was rented to "non-smokers", I could go -on and on. So yes I dont think people staying in my house for a weekend away will result in the same disrespect. But thankyou for your most helpful comment. 

Rachel100392

Please only answers to my question, not unhelpful comments made from the assumption I haven't a brain. My house would very unlikely attract those sort of scenarios anyways, I'm not renting a 6 bed party mansion.

Bigphil1474

I think it would depend on location as to whether short terms holiday lets work out better than a longer term rent, but either way is a risk as it's your home rather than just a property you own. Best solution might be to rent to a trusted family member at cost price if you have one - obviously still some pitfalls, but depends on the family! Holiday lets (like Air BnB) tend to be at much higher rates per week but potentially limited season. 

AFAIK, your Ltd company could act as your managing agent - as the homeowner you contract your company to manage the property on your behalf (no different to lots of other rented properties), and I'm sure there'd be some tax rules that can be used to benefit you and your company. Can't see how it would affect your personal tax.

p00hsticks

What do your mortgage company say about your idea ?
I suspect they may not be too happy about you turning into a holiday let just a year after moving in....  

caprikid1

Rachel100392 said:

Hi All,

After a bit of advice, so heres a bit of background:

I am looking to have a career break and work temporarily abroad for 12 months teaching english, I have only owned my house for just over a year and I love it and have put a lot of money into improving it so I really don't want to part with it. I also have a ltd company where I currently have a rental property, and due to my experience with letting to long term tenants I am worried I could end up with someone who could trash my house, therefore I think the best idea could be to rent out as short-term / holiday let instead, and I have found a company which could manage this on my behalf. 

However, I am worried that if my house doesn't receive enough bookings, my mortgage and household bills won't be covered, but if i could offset these with the rental income via my ltd company this would give me more peace of mind. So my question is, is this possible? can I manage the finances for my house through my limited company without transferring the property? And what sort of implications will this have on tax, insurance etc.

TIA

When I have considered Air B&B I did some searches for property in my area, 12 months in advance, 6 months and 1 month 1 week.

By looking at the availability in the above scenarios I can get an idea of the likely demand.

IE 50% of the property available to let 12 months time is still free in 1 week then the market is quite poor.

Also the prices and the likelyhood of 1 week , weekend etc, with changeover etc , and Air B&B costs, what is the location ?

Rachel100392

Location is about 1.5 miles from the coast with Northumberland countryside on doorstep; and 5miles from Newcastle city centre.

I am not looking to make a profit, I just would like my mortgage to be covered as I can't afford to pay a mortgage and to rent in another country simultaneously. 

I haven't contacted my mortgage provider yet, as I am just exploring the feasibility of being able to afford to proceed. But I have previously gained consent to let with my mortgage provider on a previous property which was easy enough (albeit 6 years ago) so I'm hoping it won't pose a challenge.

theartfullodger

Rachel100392 said:

Previous long term tenants have left my rental properties infested with fleas, smelling of dog and cat !!!!!!, absolutely destroyed the garden, didnt report a leak which nearly had the ceiling caving in, yellowed the ceilings even though it was rented to "non-smokers", I could go -on and on. So yes I dont think people staying in my house for a weekend away will result in the same disrespect. But thankyou for your most helpful comment. 

Yet you didn't spot these issues during you regular(?) property inspections? (Actually it would be your company, not you, carrying out the inspections). Strange .... how could that be....

Done any training in being a landlord?

DullGreyGuy

Bigphil1474 said:

AFAIK, your Ltd company could act as your managing agent - as the homeowner you contract your company to manage the property on your behalf (no different to lots of other rented properties), and I'm sure there'd be some tax rules that can be used to benefit you and your company. Can't see how it would affect your personal tax.

If they were unrelated parties then the OP could rent their flat to a holiday letting company who in turn sublets it to short term holidaymakers obviously assuming the financial risk that they are unable to generate a revenues above the rent they are paying. 

I've no idea if this would be feasible when the LTD and OP are related parties. It would also need someone to calculate the tax impacts given the OP personally would be making a profit on the rental (obviously limited things can be offset from the rental income from the company) and the company may make a profit or loss depending on how the short term lets go. 

Really a conversation to be had with an accountant in addition to mortgage provider, insurer, council possibly etc.


When we went abroad for coming up to a year we decided to leave the home empty to save the host of potential problems with renters. Thankfully with cost of living so high in London and so cheap where we were going could pay the mortgage and overseas rent and still be better off but then I was working whilst overseas so standard income coming in during the time. 

Rachel100392

theartfullodger said:

Rachel100392 said:

Previous long term tenants have left my rental properties infested with fleas, smelling of dog and cat !!!!!!, absolutely destroyed the garden, didnt report a leak which nearly had the ceiling caving in, yellowed the ceilings even though it was rented to "non-smokers", I could go -on and on. So yes I dont think people staying in my house for a weekend away will result in the same disrespect. But thankyou for your most helpful comment. 

Yet you didn't spot these issues during you regular(?) property inspections? (Actually it would be your company, not you, carrying out the inspections). Strange .... how could that be....

Done any training in being a landlord?

Its quite easy for things to be masked or swept under the rug when inspections happen. (I did it myself as a student, put a rug over a red wine stain on the carpet). The worse ones I've listed here unfortunately happened during covid restrictions when property inspections were suspended.