MrsE

Hi All


We have had the house on the market for around 8 weeks now and getting fed up with waiting for it to sell as we wanted to be coming out by end of Oct


We had hoped it would sell quite quickly being optimistic people but now we are having to rethink about what happens if it doesn't sell by Christmas. Really looking for advice about renting out our property. Would appreciate views on fors and againsts for renting out.- Apart from the obvious ones we have no idea about tax implications, rental agent charges and rental periods etc so any advice would be greatly appreciated. We are now thinking of having Christmas here and renting out from end of January.



Many thanks



Carla

Bermudashorts

We choose to rent out for various reasons, mainly financial also just in case we decide to move back at some point.

The best advice was to forget about it being our home and start to think about it being a business. I didn't like the idea of people living in my house and "spoiling" it for me if we did decide to move back but we have decided if we do we will redecorate it and make it ours again.

We use an agent to manage it and we don't have to worry about a thing. We had one set of people in that constantly complained and I had maintenance bills every month (once to change a lightbulb that was stuck apparently) and we had frozen pipe damage last winter, the agent has had everything repaired at a very reasonable price, certainly less than I believe I would have managed.

We have another couple in now for about three months and there has been no extra repair bills. We had a couple of months with no tenant and it is good idea to factor that in. The first tenants took 6 month lease and this couple have taken a 12 month lease.

We have a very low mortgage interest rate so I am expecting quite a high income tax bill, even though we are barely positive cashflow each month, the rent less fees just about covers the mortgage interest and capital repayment.

If we did decide to sell up, I cannot see how we would ever make a profit so CGT not really an issue.

I am very happy with our decision to rent the house out.

MrsE

Thanks for the advice BS. I'm guessing that we have to tell the mortgage company that we will be renting it out if we decide to? If this is the case can they change the mortgage product we currently have? We have a good deal with them at the moment and wouldn't want this to change.

Hope it is still going well for you out there.

Carla

Bermudashorts

You should tell mortgage company, but perhaps you could "forget" say you had no idea you needed to do anything if it ever comes to light. But make sure you don't forget to change the insurance...

We also had a good deal and I did not want to change it. I spoke to the bank and said we were going overseas temporarily and they said we could stay as we are for two years. At the end of the two years, I am aiming to have the mortgage paid off or at least substantially paid down and if there is anything left we will just have to change over.

MrsE

I like your way of thinking I know what you mean about other people in "your" house too - we have got expensive oak flooring in most of our downstairs and have decorated so nicely too - really don't want somebody in there who won't look after it But as you say - have to think of it as a business

h2oskineil

Some banks do not allow you to rent out your mortgaged property (called buy to let) and you may be forced to change the product. We were with First Direct and 6 years ago they were ok, but I know in the past few years (we have sold it now) whenever I mentioned on the phone that it was a rental property, they said, "That's not allowed" and I had to produce a letter stating that I had been granted permission.

Use the advanced search at the top.... you'll find lots of info.... I posted this in the past:-

You have to complete a NR1 form http://www.hmrc.gov.uk/cnr/nrl1.pdf
Without this form being submitted the agent looking after the property has to deduct the tax from the rental received.

NR1 Guidance notes.... http://www.sabbaticalhomes.co.uk/non...s_notes_bw.pdf

I had Landlord insurance.... strongly recommend as if your tenant looses their job, becomes ill and cannot pay the rent, the insurance will pay until you get a new tenant. http://www.letsure.co.uk/

Benefits of Letsure's Rent & Legal Protection

Letsure provides a product with high levels of cover at a competitive price. The key benefits are shown below:

100% of your monthly rental income for up to 12 months or until vacant possession is achieved whichever happens sooner.
75% of your monthly rental income for up to 2 months after vacant possession has been achieved whilst you are trying to relet the property.
Covers monthly rents up to £5,000 (higher amounts may be available on request)
Provides a legal service that will seek to evict your tenant for non-payment of rent.
Provides up to £60,000 of legal cover to defend a legal action brought against you by a tenant and to remove squatters.

Turban Explorer

Are you on commission from Letsure?!!

Bermudashorts

That is not what it says.

I personally would not bother with this type of insurance.

JAJ

If you have not had any interest, the reason may be that the house is priced above its true value.

MrsE

Thanks for taking the time to come back to me with all that info - will have a read thru all those sites.

MrsE

We had interest initially - about 7 or 8 viewers then the summer hols came along and it all went quiet. The feedback didn't involve any moans about it being overpriced - in fact 2 lots really liked it but hadn't sold theirs yet.

The estate agent said the lack of viewers was due to the summer hols. Now the children have been back at school a week we are wondering whether we need to reduce the price as it hasn't picked up. We personally thought that the agent had overpriced it but chose to go with it to see what response we would get. We will be reducing the price this week.

MrsE

Thanks BS

paddyo

We also lived in Hampshire and moved over here 3 1/2 years ago, albeit on a Temp Visa so slightly different circumstances. We obviously wanted to keep our house to derisk the move in case we had to go back and to cover the mortgage, which is doesn't but again keeping the house was important to us.
As Bermuda Shorts mentioned, let go of it as a 'home' and put it in the 'income' pot. If we ever had to go back to ours we always knew we would do a complete redecoration overhaul and bring it 'back' to us again.
Definatly get an Agent, ours charges 10% of the rent. We did NR1 so do not pay tax on the income. We have Landlords Insurance and Mortgage Company approval to let. I also have an extra insurance to cover the cooker, dishwasher, Boiler and ALL plumbing...just in case!
We may now be looking to stay Permanently and if so will sell the house, we are making a loss on the mortgage vs rent so it would not be economically viable to keep it and any profit we make could go towards a deposit on a house here...which are bloody expensive!!

bingobob777

7 or 8 viewers and no offer would indicate there is either something wrong with the price or the house.You've now lost your main chance at selling it.

You get the vast majority of viewers through in the first few weeks, now you're at the mercy of people who via the use of Property bee and Zoopla will be able to see that you've reduced your sale price after being on the market for 8 weeks, if they have any sense they'll chase your sale price even lower as it's obvious your desperate to sell.

Estate agents in my experience do eff all to sell the house and will feed you a load of claptrap, summer hols, cold weather, hot weather, wrong month, close to Xmas etc etc, always a reason for no viewers. You fell for the one who gave you the highest price to get your business, now it will sit on the market.

do your own research via Zoopla and rightmove to establish what your house is worth, in my experience that will be just as good as what anyone else does, then price it to sell considering

a. house prices fell 1.3% last month alone according to Halifax
b. the state of the world economy
c. from mid november onwards people are thinking about Xmas, not buying a house