Go Back  British Expats > Living & Moving Abroad > Australia
Reload this Page >

Renting out UK home - advice please!

Renting out UK home - advice please!

Old Jun 28th 2010, 8:16 pm
  #1  
Forum Regular
Thread Starter
 
Joined: Sep 2009
Location: Hull, UK
Posts: 73
MaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the rough
Default Renting out UK home - advice please!

Well with 4 months til we fly to Melbs we have still had no luck in selling our house - even dropping the price to as low as we can! Grrrr So it's looking like our only option is renting the damn thing out!

We have no equity in the house and was selling it to pay off the mortgage and be debt free and skint when we touch down in Melbourne. The lack of sale has thrown a spanner in! We can't change our fly date as we have to enter Oz by 11th November - so Renting it shall be!

Can anyone advise any potential problems that may occur if I do this? We don't plan on buying in Australia for 2 - 4 years, the rental from our house will just cover the intrest only mortgage payments so we won't make anything from it. (The bank said we could let it out without changing our mortgage) Where do I stand with buying in Oz - do I have to sell my UK house first? How difficult is it selling a house from 12,000 miles away? Is there anything I need to pay for while in Oz? (GST or the like?)

It's all new to me and renting was our nightmare scenario so something we didnt want to think aboout. Unless a miricle happens over the next 4 months we will be living that nightmare!

Any advice greatly appreciated!
MaCCCa is offline  
Old Jun 28th 2010, 9:15 pm
  #2  
BE Forum Addict
 
joho's Avatar
 
Joined: May 2004
Location: Umina, NSW
Posts: 2,453
joho has a reputation beyond reputejoho has a reputation beyond reputejoho has a reputation beyond reputejoho has a reputation beyond reputejoho has a reputation beyond reputejoho has a reputation beyond reputejoho has a reputation beyond reputejoho has a reputation beyond reputejoho has a reputation beyond reputejoho has a reputation beyond reputejoho has a reputation beyond repute
Default Re: Renting out UK home - advice please!

We rented our house out for the 1st year we were here, we had a friend rent it from us and never used a landlord or such. We still got insurance and all the checks done though. It was a bit tricky selling whilst in Aus but not to bad, few issues with buyers etc and leave at least 2 weeks between exchange and completion, we had a mad panic as we wanted a week but didnt realise that we had to sign and return origitnal documents (faxed over but orignal sig back) before the competion, we had to courier and only just made it.

There are tax implications if you own 2 houses and sell one if any profit.

Certainly worth considering if you really want to come.

Jo
joho is offline  
Old Jun 28th 2010, 10:41 pm
  #3  
Forum Regular
Thread Starter
 
Joined: Sep 2009
Location: Hull, UK
Posts: 73
MaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the rough
Default Re: Renting out UK home - advice please!

Well we defo comeing as the flights are booked and visas all sorted!

So would I be able to buy a house in australia while owning one in the UK? Or would I need to earn a lot as effectively I would have 2 mortgages?
MaCCCa is offline  
Old Jun 29th 2010, 12:32 am
  #4  
Social Grenade Thrower
 
paddyo's Avatar
 
Joined: Jan 2008
Location: South Coast, NSW
Posts: 3,625
paddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond repute
Default Re: Renting out UK home - advice please!

Originally Posted by MaCCCa View Post
Well we defo comeing as the flights are booked and visas all sorted!

So would I be able to buy a house in australia while owning one in the UK? Or would I need to earn a lot as effectively I would have 2 mortgages?
OK, I am out here on a 457 Temp Visa so for us renting out was the sensible option until we decide what our future is/was.
Few things I can remember:
You - Pay your mortgage regularly and ensure you transfer money to your UK account every month if you need to top up your rent (use Tranzfers, very easy). USE AN AGENT!!! Do not try and do 'mates rates' or as a favour, it never works and could lose your friends. An agent will do all the legal stuff for you and sort out checks against potential lettees etc but try and research a good agent, usual fee is 10% of rent. Also, note your bank stance, but, you may have to sign something confirming that you are renting out and that they, as the mortgage provider, are happy for that and this may cost a small fee, ours was 150 quid with Northern Rock. If your mortgage changes during your time here they may increase the rate as it is now considered 'an investment'. Also, you can fill in a form, the agent will know which one, so that as a non domiciled home owner you will not have to pay tax on your rental income.
You - can buy a house here no problem once you have settled and know which area you are going to buy in, there is no link whatsoever with UK finance here so you could be a bankrupt or IVA person in UK and still get full credit and loans here in Oz. You have to put down 20% deposit generally but like all things there are ways around it. Bearing in mind you have no equity in your UK house, if you are here on a permanent visa then I would definately reccomend it. BE CAREFUL - if you suddenly lose your lettee, could you afford to still pay your UK mortgage and Oz mortgage or rent for that matter??? Check your finances and have a contingency plan to be able to cover the UK rental short term, if its long term then your UK rent is too high and sort it out with your agent. Best to have something coming in than nothing at all!!
Your agent - be communicative, you are only an email away or even phone call in an emergency so ensure they keep you appraised of any issues and if any money needs to be spent that they check with you first!! If you have a really good neighbour or family friend who is good at house maintainence, ask them to be your nominated first call for 'when things go wrong' in your house. Get house only insurance, very important!! Let the lettees get contents only insurance.
So, 3 most important?
Get agent.
Plan your finances for all eventualities.
If here on PR, then buy in Oz using 20% deposit (or agreed sum/bond).
paddyo is offline  
Old Jun 29th 2010, 1:23 am
  #5  
'Made in Ulster' Member
 
Jen1977ni's Avatar
 
Joined: Dec 2008
Location: Brisbane, QLD. (Though an Ulster girl through and through!)
Posts: 6,565
Jen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond repute
Default Re: Renting out UK home - advice please!

Some of the posts amongst this thread might prove useful:

http://britishexpats.com/forum/showthread.php?t=639496
Jen1977ni is offline  
Old Jun 29th 2010, 8:20 am
  #6  
Forum Regular
Thread Starter
 
Joined: Sep 2009
Location: Hull, UK
Posts: 73
MaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the rough
Default Re: Renting out UK home - advice please!

Thanks Paddyo great advice! Put my mind at rest! We have a letting agent coming round this afternoon for a chat etc - the bank have said we could let it out on our interest only mortgage.

Thanks for the link Jen!
MaCCCa is offline  
Old Jun 29th 2010, 8:39 am
  #7  
Forum Regular
Thread Starter
 
Joined: Sep 2009
Location: Hull, UK
Posts: 73
MaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the rough
Default Re: Renting out UK home - advice please!

Oh BTW - as well as the management fee and buildings insurance are there any other fees I need to be aware of? I presume we would still need life insurance for that property?
MaCCCa is offline  
Old Jun 29th 2010, 8:45 am
  #8  
'Made in Ulster' Member
 
Jen1977ni's Avatar
 
Joined: Dec 2008
Location: Brisbane, QLD. (Though an Ulster girl through and through!)
Posts: 6,565
Jen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond reputeJen1977ni has a reputation beyond repute
Default Re: Renting out UK home - advice please!

Originally Posted by MaCCCa View Post
Oh BTW - as well as the management fee and buildings insurance are there any other fees I need to be aware of? I presume we would still need life insurance for that property?
I kept mine running with Scottish Provident yes...just let them know you're moving...
Jen1977ni is offline  
Old Jun 29th 2010, 10:07 am
  #9  
Lost in BE Cyberspace
 
Alfresco's Avatar
 
Joined: Jan 2009
Posts: 20,814
Alfresco has a reputation beyond reputeAlfresco has a reputation beyond reputeAlfresco has a reputation beyond reputeAlfresco has a reputation beyond reputeAlfresco has a reputation beyond reputeAlfresco has a reputation beyond reputeAlfresco has a reputation beyond reputeAlfresco has a reputation beyond reputeAlfresco has a reputation beyond reputeAlfresco has a reputation beyond reputeAlfresco has a reputation beyond repute
Default Re: Renting out UK home - advice please!

Originally Posted by paddyo View Post
OK, I am out here on a 457 Temp Visa so for us renting out was the sensible option until we decide what our future is/was.
Few things I can remember:
You - Pay your mortgage regularly and ensure you transfer money to your UK account every month if you need to top up your rent (use Tranzfers, very easy). USE AN AGENT!!! Do not try and do 'mates rates' or as a favour, it never works and could lose your friends. An agent will do all the legal stuff for you and sort out checks against potential lettees etc but try and research a good agent, usual fee is 10% of rent. Also, note your bank stance, but, you may have to sign something confirming that you are renting out and that they, as the mortgage provider, are happy for that and this may cost a small fee, ours was 150 quid with Northern Rock. If your mortgage changes during your time here they may increase the rate as it is now considered 'an investment'. Also, you can fill in a form, the agent will know which one, so that as a non domiciled home owner you will not have to pay tax on your rental income.
You - can buy a house here no problem once you have settled and know which area you are going to buy in, there is no link whatsoever with UK finance here so you could be a bankrupt or IVA person in UK and still get full credit and loans here in Oz. You have to put down 20% deposit generally but like all things there are ways around it. Bearing in mind you have no equity in your UK house, if you are here on a permanent visa then I would definately reccomend it. BE CAREFUL - if you suddenly lose your lettee, could you afford to still pay your UK mortgage and Oz mortgage or rent for that matter??? Check your finances and have a contingency plan to be able to cover the UK rental short term, if its long term then your UK rent is too high and sort it out with your agent. Best to have something coming in than nothing at all!!
Your agent - be communicative, you are only an email away or even phone call in an emergency so ensure they keep you appraised of any issues and if any money needs to be spent that they check with you first!! If you have a really good neighbour or family friend who is good at house maintainence, ask them to be your nominated first call for 'when things go wrong' in your house. Get house only insurance, very important!! Let the lettees get contents only insurance.
So, 3 most important?
Get agent.
Plan your finances for all eventualities.
If here on PR, then buy in Oz using 20% deposit (or agreed sum/bond).
Good post.
Alfresco is offline  
Old Jun 29th 2010, 10:18 am
  #10  
JAJ
Retired
 
JAJ's Avatar
 
Joined: Apr 2004
Posts: 34,649
JAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond repute
Default Re: Renting out UK home - advice please!

Originally Posted by MaCCCa View Post
Well we defo comeing as the flights are booked and visas all sorted!

So would I be able to buy a house in australia while owning one in the UK? Or would I need to earn a lot as effectively I would have 2 mortgages?
2 mortgages? Is that a good investment strategy?

There is a wiki discussion:
http://britishexpats.com/wiki/House_in_UK-Keep_or_Sell
JAJ is offline  
Old Jun 29th 2010, 10:20 am
  #11  
Pie Eater
 
coolshadows's Avatar
 
Joined: Sep 2007
Location: South Australia
Posts: 770
coolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud of
Default Re: Renting out UK home - advice please!

Originally Posted by paddyo View Post
An agent will do all the legal stuff for you and sort out checks against potential lettees etc but try and research a good agent, usual fee is 10% of rent.
+ VAT on it.

eg. £500 rent = £50 @ 10% + £8.75 VAT @ 17.5% = £58.75 agency fee
& from Jan > £500 rent = £50 @ 10% + £10 VAT @ 20% = £60 agency fee (making it more like 12%)

Also they will likely charge a 'new agreement' fee every time a new lease is signed (approx 50% of a months rent, or less for renewal).

Last edited by coolshadows; Jun 29th 2010 at 10:30 am.
coolshadows is offline  
Old Jun 29th 2010, 10:27 am
  #12  
Pie Eater
 
coolshadows's Avatar
 
Joined: Sep 2007
Location: South Australia
Posts: 770
coolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud ofcoolshadows has much to be proud of
Default Re: Renting out UK home - advice please!

Originally Posted by MaCCCa View Post
I presume we would still need life insurance for that property?
You'll unlikely need life insurance if you are switching to a 'buy-to-let' mortgage. (just check the terms of your mortgage)
coolshadows is offline  
Old Jun 29th 2010, 10:30 am
  #13  
Forum Regular
Thread Starter
 
Joined: Sep 2009
Location: Hull, UK
Posts: 73
MaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the rough
Default Re: Renting out UK home - advice please!

Originally Posted by JAJ View Post
2 mortgages? Is that a good investment strategy?

There is a wiki discussion:
http://britishexpats.com/wiki/House_in_UK-Keep_or_Sell
We would not buy in Oz while having our UK property, To be fair I'd rather have rid of the UK property but it just isn't selling and other than dropping the keys off at the bank we don't have any other option!
MaCCCa is offline  
Old Jun 29th 2010, 10:32 am
  #14  
Forum Regular
Thread Starter
 
Joined: Sep 2009
Location: Hull, UK
Posts: 73
MaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the roughMaCCCa is a jewel in the rough
Default Re: Renting out UK home - advice please!

Originally Posted by coolshadows View Post
You'll unlikely need life insurance if you are switching to a 'buy-to-let' mortgage. (just check the terms of your mortgage)
We wouldn't be switching - we would be just on our interest only until such time as we are able to sell.
MaCCCa is offline  
Old Jun 29th 2010, 10:36 am
  #15  
Forum Regular
 
Joined: Jan 2009
Posts: 147
eeksy will become famous soon enougheeksy will become famous soon enough
Default Re: Renting out UK home - advice please!

Make sure you get mallicious damage by a tenant cover on your insurance policy. A standard policy covers nothing if a tenant damages your property.
eeksy is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell or Share My Personal Information -

Copyright © 2023 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.