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Considering renting my 1 bed flat to local council

Hi

I am about to rent out my 1 bed flat and considering renting this out to the council rather than a private tenant. I don't want to use an agency as they charge ridiculous fees, I have a friend who could help me through being a landlord - has shared tenancy agreement examples etc, but would like someone to move in sooner rather than later and am busy with work/ moving myself so haven't the time to advertise and interview tenants etc.

The council would like to move in a single mum, early 20s with a young child - there is a park and school nearby, close to town so I think this young lady would be happy and so feel this could be a long term thing - i.e. not someone new moving in every few months (I'm aware this could still happen).

Has anyone else done this? And advice welcome.

Thanks
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  • Pixie5740
    Pixie5740 Posts: 14,515
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    mn2203 wrote: »
    Hi

    I am about to rent out my 1 bed flat and considering renting this out to the council rather than a private tenant. I don't want to use an agency as they charge ridiculous fees, I have a friend who could help me through being a landlord - has shared tenancy agreement examples etc, but would like someone to move in sooner rather than later and am busy with work/ moving myself so haven't the time to advertise and interview tenants etc.

    The council would like to move in a single mum, early 20s with a young child - there is a park and school nearby, close to town so I think this young lady would be happy and so feel this could be a long term thing - i.e. not someone new moving in every few months (I'm aware this could still happen).

    Has anyone else done this? And advice welcome.

    Thanks

    Is the property mortgaged? If so has your lender granted consent to let and importantly has it granted consent to let for this type of let which I presume is not a standard AST?

    Has the freeholder also granted consent to let?
  • mn2203
    mn2203 Posts: 48
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    Hi

    Yes the mortgage company and freeholder have agreed to this.

    Thanks
  • mugatool
    mugatool Posts: 16 Forumite
    What other information do you have on the tenant. Is she on housing benefit? Wash she in arrears and the council are dumping her on a private landlord as they have no responsibility to house her?

    I've had both great council tenants and I've had council tenants who have left me out of pocket and trashed my house. And you could get the same with private tenants as well.
  • tom9980
    tom9980 Posts: 1,990
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    You show no real signs to me you want to be a landlord with all the responsibility that requires, you dont want to use an agent and have no desire to to even interview your potential tenants. It seems to me you may not be cut out for this if you cannot even do the basics yourself.

    Consider selling or find time to be a good decent professional landlord.
    When using the housing forum please use the sticky threads for valuable information.
  • silvercar
    silvercar Posts: 46,865
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    Are they paying you the market rent? Is it guaranteed? Future rent increases?
    What happens when the lady is no longer eligible for council help with rent, either because she starts work or because she meets a working partner? Will the council still pay the rent/ agree to house her?
    What happens if you want the property back?

    Risks on every tenant, I wouldn't rule it out. I have a similar situation, though the tenant found the property directly. The upsides are that the tenant wants to stay long term (no voids) and is now unlikely to find a new rental, council pays the rent on time. Tenant does minor repairs and redecorates, generally looks after the place.
    Downsides are that increasing rent is difficult. I'm probably losing 10% rent a month and that is allowing for the fact that I don't have an agent. If I rented to a new tenant I could charge 15-20% more though 10% of that would go on tenant find and agency fees, redecorates between tenants etc A big downside would be that evicting would be difficult.
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  • mn2203
    mn2203 Posts: 48
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    mugatool wrote: »
    What other information do you have on the tenant. Is she on housing benefit? Wash she in arrears and the council are dumping her on a private landlord as they have no responsibility to house her?

    I've had both great council tenants and I've had council tenants who have left me out of pocket and trashed my house. And you could get the same with private tenants as well.

    Hi

    Tennant currently in temporary accommodation with the council so they're looking for a stable place for her.

    Yes she'll be on housing benefit, so my rent will be made up from that and a small contribution from the tennant.

    Unfortunately my local authority have no council properties.

    Yes - always a gamble lol :-)
  • mn2203
    mn2203 Posts: 48
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    silvercar wrote: »
    Are they paying you the market rent? Is it guaranteed? Future rent increases?
    What happens when the lady is no longer eligible for council help with rent, either because she starts work or because she meets a working partner? Will the council still pay the rent/ agree to house her?
    What happens if you want the property back?

    Risks on every tenant, I wouldn't rule it out. I have a similar situation, though the tenant found the property directly. The upsides are that the tenant wants to stay long term (no voids) and is now unlikely to find a new rental, council pays the rent on time. Tenant does minor repairs and redecorates, generally looks after the place.
    Downsides are that increasing rent is difficult. I'm probably losing 10% rent a month and that is allowing for the fact that I don't have an agent. If I rented to a new tenant I could charge 15-20% more though 10% of that would go on tenant find and agency fees, redecorates between tenants etc A big downside would be that evicting would be difficult.

    Thanks Silvercar, that's some great questions that I will certainly ask.

    It isn't much less than market rate, an agent has given me a rate but I know it's inflated. Plus this way I feel I am helping out someone who can't afford to rent privately and assist the homeless situation in my area - it's not always about the money is it :-)

    As you say - you could charge more but sounds like you have a great tenant who looks after your place.

    Thanks
  • mugatool
    mugatool Posts: 16 Forumite
    mn2203 wrote: »
    Hi

    Tennant currently in temporary accommodation with the council so they're looking for a stable place for her.

    Yes she'll be on housing benefit, so my rent will be made up from that and a small contribution from the tennant.

    Unfortunately my local authority have no council properties.

    Yes - always a gamble lol :-)

    To me that sounds like she was evicted from a previous property if she is in temporary accommodation. Of course you can be evicted for a variety of things, not just the non payment of rent.

    You could interview her and find out a bit more info. Are you in the SE, if the council can't pay all of the HB will she be able to cover the rest adequately.
  • mrginge
    mrginge Posts: 4,843 Forumite
    mn2203 wrote: »
    Hi

    Tennant currently in temporary accommodation with the council so they're looking for a stable place for her.

    Yes she'll be on housing benefit, so my rent will be made up from that and a small contribution from the tennant.

    Unfortunately my local authority have no council properties.

    Yes - always a gamble lol :-)

    So you are not renting to the council then.

    I have to agree with tom9980
  • AdrianC
    AdrianC Posts: 42,189
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    Renting to the council = you have a contract with the council. They pay you, no matter whether there's a tenant there or not. You don't even know whether there's a tenant there or not. The tenant may change regularly.


    Renting to the tenant = you have a contract with the tenant. The tenant is legally responsible for paying you, whether they're part funded by the council or not.
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