Renting a House

Goksly

Goksly

Goksly

Soldato
Joined
5 Mar 2003
Posts
10,781
Location
Nottingham
So new year new changes... I own a property (mortgaged) and so does the other half, and due to a tense game of rock paper scissor, I will be moving in with her. Prices in the local area are going up, so I'm looking to rent the house out rather than sell.

As this is my first venture, I'll be using an estate agent (7%) and will have to pay a few hundred for gas / electricity certificates which I've no issue with. Just wondering what other things need to be done and which companies people are using? Estate agent is suggesting their preferred insurance provider and "maintenance provider" but I've got a feeling they've put a substantial margin on those.

So any pointers / company suggestions etc would be much appreciated.

3 bed out of town home on a new build estate - aiming for professional family etc.
 
You'll need to speak to your mortgage company. You presumably have a residential mortgage and they might give you "consent to let" but they might require you to switch to a buy-to-let mortgage (for which you'll require sufficient equity).
 
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We don't use an estate agent, found them all useless.

We quite just advertise the property on FB but of course make sure all the deposit schemes, insurance etc is all done properly and is above board.
 
Surveyor said:
You'll need to speak to your mortgage company. You presumably have a residential mortgage and they might give you "consent to let" but they might require you to switch to a buy-to-let mortgage (for which you'll require sufficient equity).
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I was wondering about that. What are the implications of forgetting to do this? I understand with insurance - you don't change anything, tenant burns it down and insurance company shrug their shoulders. But with mortgage provider, they give the money, they get their monthly payments. Why would they care and if they don't get told...?
 
Goksly said:
I was wondering about that. What are the implications of forgetting to do this? I understand with insurance - you don't change anything, tenant burns it down and insurance company shrug their shoulders. But with mortgage provider, they give the money, they get their monthly payments. Why would they care and if they don't get told...?
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Because like you, they own some of the property.
 
Goksly said:
I was wondering about that. What are the implications of forgetting to do this? I understand with insurance - you don't change anything, tenant burns it down and insurance company shrug their shoulders. But with mortgage provider, they give the money, they get their monthly payments. Why would they care and if they don't get told...?
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In the mortgage deed which I assume you read, it spells out that you can't rent the property out... Mine also specifies the cost if I DO choose to rent it out.

Do your reading, first of the paperwork you already signed, but also your (legal!) responsibilities as a landlord. You know you'll be paying tax on the income too yes? Google Deposit Protection Scheme and read that too.

Do your reading. It's not free money. Don't be one of the bad landlords.
 
Goksly said:
I was wondering about that. What are the implications of forgetting to do this? I understand with insurance - you don't change anything, tenant burns it down and insurance company shrug their shoulders. But with mortgage provider, they give the money, they get their monthly payments. Why would they care and if they don't get told...?
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Read your mortgage deed/agreement/conditions as suggested. They will contain clauses such as:

You must not change the use or occupation of the property without our written consent. This includes leasing, letting, licensing or parting with possession of it, or any part of it.
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You're not allowed to let.

The borrower assigns to the lender all receipts and any claims and rights, now or in the future, ancillary to the ownership of the property including any rents and the benefit of any agreements, guarantees or indemnities, any membership rights, any right to compensation payable, and the right to any insurance proceeds payable in respect of damage to or destruction
of the property.
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If you do let it the receipts belong to the lender.

You’re in default if you’ve breached any term of your mortgage which doesn’t require you to pay money. However, you won’t be in default if the breach is minor or you put it right quickly.
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By letting without permission you're in default which could result in a request for immediate repayment of your loan, repossession etc.
 
Take a look here it will give you the basics of what's required: https://www.gov.uk/renting-out-a-property

As others have said you will need consent to let from your mortgage provider or change to a BTL mortgage.

You really need to make sure everything is done correctly as everything is in the favor of the tenant these days. The last thing you want to do is be caught out, especially if you get bad tenants.

If I was you id just find a good estate agent to fully manage it for you, takes away all the hassle, with checks on the tenants, tenancy agreements, maintenance/repairs, collecting rent, holding deposits, property inspections, just dealing with any issues the tenants may have, etc.
 
Goksly said:
Estate agent is suggesting their preferred insurance provider and "maintenance provider" but I've got a feeling they've put a substantial margin on those.
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Also just to add:

I use Direct Line as they provide good cover (loss of rent, damage, legal expenses) I wouldn't use theirs.

If you know people in the trade you may be able to ask the estate agent to use your preferred builder, plumber, etc. but you also need to know someone can be on call 24/7, theirs will be.

If they are any good you will be able to agree on all these things and things like how much they can spend on a repair before they need to ask you if they can proceed.

I have properties let out and would recommend a good estate agent to manage it all, just to save any hassle or extra work, don't forget you can claim back fees and maintenance against your tax.
 
Goksly said:
I was wondering about that. What are the implications of forgetting to do this? I understand with insurance - you don't change anything, tenant burns it down and insurance company shrug their shoulders. But with mortgage provider, they give the money, they get their monthly payments. Why would they care and if they don't get told...?
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I don't think there's any way a bank would find out unless you told them
 
Roar87 said:
I don't think there's any way a bank would find out unless you told them
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Probably not.

But what happens when he has a tenant that hasn't paid rent for 6 months plus, you serve all the correct paperwork etc. it gets to count and then eventually falls down as you didn't even have the right to let it out...

The landlord is skint from loss of rent, maybe even a fine from the court or mortgage provider on top, and still has a tenant that hasn't paid rent and makes it even harder to sort now as it may say in the tenancy agreement the landlord must have permission to let the property out.

is it really worth not doing?

First time I did it, it cost me £120, and at the end of the fixed-term I swapped to a BTL.
 
Change the mortgage to a BTL, some lenders allow you to keep it rented on your normal mortgage for up to a year before changing but double check first - not worth the risk as they will back charge you or simply void the mortgage if found out which will leave you in a bit of a scramble.

Landlord insurance is a must, but it's quite cheap. I use more than business.

As this is your first venture stick with an agent for the first year just so you get used to the process, but eventually you will find out they're not worth the money and start doing it yourself if you're confident enough.

Biggest thing is tenants. Make sure they are vetted and aim for a professional family. I try to advertise myself through work places and temples, but in areas I'm not too familiar with I get an agent to find me someone.

Deposit wise... I've stopped asking for a deposit - landlord's get screwed over most the time anything is contested.

Find a local company to do a deep clean before/after any new tenant.

Depending on the house condition it's always good to get a decorator in every few years to give the walls and wood a spruce.

Properties have to be inspected twice a year now, but your agency will take care of that.

I always leave fire extinguishers, spare touch up paint and a lawnmower at each property (and some other things I can't remember atm).

Oh, and keep the boiler and alarm systems serviced each year.

Good luck
 
Le Clandestin Brun said:
Change the mortgage to a BTL, some lenders allow you to keep it rented on your normal mortgage for up to a year before changing but double check first - not worth the risk as they will back charge you or simply void the mortgage if found out which will leave you in a bit of a scramble.

Landlord insurance is a must, but it's quite cheap. I use more than business.

As this is your first venture stick with an agent for the first year just so you get used to the process, but eventually you will find out they're not worth the money and start doing it yourself if you're confident enough.

Biggest thing is tenants. Make sure they are vetted and aim for a professional family. I try to advertise myself through work places and temples, but in areas I'm not too familiar with I get an agent to find me someone.

Deposit wise... I've stopped asking for a deposit - landlord's get screwed over most the time anything is contested.

Find a local company to do a deep clean before/after any new tenant.

Depending on the house condition it's always good to get a decorator in every few years to give the walls and wood a spruce.

Properties have to be inspected twice a year now, but your agency will take care of that.

I always leave fire extinguishers, spare touch up paint and a lawnmower at each property (and some other things I can't remember atm).

Oh, and keep the boiler and alarm systems serviced each year.

Good luck
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Include a guarantor in the agreement and credit check and land registry check.

Include a rent increase pa in the agreement so there’s no argument later on and they have the ability to plan.

Cash is useless at the moment and inflation is a massive hidden tax so tangible assets are a good choice.

If you have one and it’s empty for three months it’s painful. If you have ten and one is empty for three months it’s less painful so think of scaling up.
 
Roar87 said:
I don't think there's any way a bank would find out unless you told them
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This is not how risk/reward works when the risk is losing your property because - surprise! - the bank, an at least partial owner, have different views from some angry edgelord on the internet.
Just think for once Roar. You don't have to take exception to everything,especially on advice that has no repercussions to yourself.
OP, do it properly and good luck.
 
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