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Renting out UK home - advice please!

Renting out UK home - advice please!

Old Jun 29th 2010, 10:38 am
  #16  
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Default Re: Renting out UK home - advice please!

Originally Posted by MaCCCa View Post
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!
Isn't selling? Everything will sell if the price is realistic.
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Old Jun 29th 2010, 10:40 am
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Default Re: Renting out UK home - advice please!

Originally Posted by MaCCCa View Post
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!
Are you on Permanent or Temporary Visa? If Temp, look into getting LAFHA which is worth a grand or two in your hand if eligible.
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Old Jun 29th 2010, 10:41 am
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Default Re: Renting out UK home - advice please!

Originally Posted by MaCCCa View Post
We wouldn't be switching - we would be just on our interest only until such time as we are able to sell.
Make sure you check that when you change insurance to a landlord insurance policy, whether they will inform (or you need to inform) your mortgage provider (as most mortgage providers require them being declared on insurance policies).
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Old Jun 29th 2010, 10:42 am
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Default Re: Renting out UK home - advice please!

Originally Posted by JAJ View Post
Isn't selling? Everything will sell if the price is realistic.
From what I gather from the OP, the price to sell would leave them with zero profit due to nil equity. If they lower the price they would incur loss, amount dependant upon house sale price. It may well be that if there rent covers their mortgage and the house prices rise a bit then it may in the longer term prove to be a decent investment.
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Old Jun 29th 2010, 10:50 am
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Default Re: Renting out UK home - advice please!

Originally Posted by paddyo View Post
From what I gather from the OP, the price to sell would leave them with zero profit due to nil equity. If they lower the price they would incur loss, amount dependant upon house sale price. It may well be that if there rent covers their mortgage and the house prices rise a bit then it may in the longer term prove to be a decent investment.
Copied from another thread...good point about the tax but if you don't earn in the UK then you will be below the threshold anyway.
Make sure you are registered as an overseas landlord for tax purposes (NRL1) and make sure you let you Home Insurers and Mortgage provider know. Note that the NRL1 does not mean you do not pay tax (as stated by someone previously). Rather it means that the letting agent does not take tax out of the rental income before giving it to you. You may still have to pay tax depending on your UK income.
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Old Jun 29th 2010, 10:58 am
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Default Re: Renting out UK home - advice please!

Originally Posted by JAJ View Post
Isn't selling? Everything will sell if the price is realistic.
The price is realistic and as it is we would take hit with fees ect (Father in law was going to lend us whatever we were short) Our house prices is well below market value and is the cheapest house of its type in the area. (5 years old, 4 Bed detached) Unfortunately the area isn't as desirable as others.

Our agent advised dropping another £20k and see what offers we get - we would end up owing the bank £20k due to no equity so that's a no,no. We will break even by renting out - which is more appealing and logical thing to do rather than trying to find £20k out of thin air. It doesn't help when the house next door is up for auction either as this has effected any potential buyers to our property the buggers!

I am on a permenant Spouse visa which will be activated on arrival.
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Old Jun 29th 2010, 11:01 am
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Default Re: Renting out UK home - advice please!

Originally Posted by MaCCCa View Post
The price is realistic and as it is we would take hit with fees ect (Father in law was going to lend us whatever we were short) Our house prices is well below market value and is the cheapest house of its type in the area. (5 years old, 4 Bed detached) Unfortunately the area isn't as desirable as others.

Our agent advised dropping another £20k and see what offers we get - we would end up owing the bank £20k due to no equity so that's a no,no. We will break even by renting out - which is more appealing and logical thing to do rather than trying to find £20k out of thin air. It doesn't help when the house next door is up for auction either as this has effected any potential buyers to our property the buggers!

I am on a permenant Spouse visa which will be activated on arrival.
IMO you are doing the best option!
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Old Jun 29th 2010, 11:03 am
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Default Re: Renting out UK home - advice please!

Originally Posted by paddyo View Post
IMO you are doing the best option!
Agreed. Rent out and bide your time. That's exactly what we've been doing since July last year (we did knock 15% off to try to sell at the time, but ended up renting out).
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Old Jun 29th 2010, 11:12 am
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Default Re: Renting out UK home - advice please!

Originally Posted by MaCCCa View Post
The price is realistic and as it is we would take hit with fees ect (Father in law was going to lend us whatever we were short) Our house prices is well below market value and is the cheapest house of its type in the area. (5 years old, 4 Bed detached) Unfortunately the area isn't as desirable as others.
You have my sympathy etc, but if you can't sell it at the given price, it means that the real market value is lower (or something specific is wrong with the property).

Incidentally, borrowing from family members is a bad idea.

So if you have a mortgage that's GBP20k above your house value, reducing that mortgage needs to be a high priority (more so than acquiring more debt).

Last edited by JAJ; Jun 29th 2010 at 11:17 am.
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Old Jun 29th 2010, 12:45 pm
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Default Re: Renting out UK home - advice please!

Originally Posted by JAJ View Post
You have my sympathy etc, but if you can't sell it at the given price, it means that the real market value is lower (or something specific is wrong with the property).

Incidentally, borrowing from family members is a bad idea.

So if you have a mortgage that's GBP20k above your house value, reducing that mortgage needs to be a high priority (more so than acquiring more debt).
The property is fine - it's like I said earlier its not the most desirable area and the house for auction next door isn't helping! Plus we live in Hull which took a big hit for jobs last year.

Our mortgage is 140k and or house is on the market for 140k we would obviously expect offers below this so would acquire some debt due to the shortfall as the agent fees need to come off the sale price also. It is 5k lower than another near-by of the same style and better positioned (More parking ect) (There is another 20k above our price!)

It's not feasible to go any lower without gaining massive debts -which isn't what we want. Our plan was to go debt free and start a fresh!

Rentals go well in Hull and have been told finding a tenant wouldn't be an issue. So for us it seems our best option. Unless someone makes a cheeky offer!
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Old Jun 29th 2010, 1:55 pm
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Default Re: Renting out UK home - advice please!

Originally Posted by MaCCCa View Post
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!

Any advice greatly appreciated!

We had a property in the UK until very recently and had been renting it for over 3 years. With the current low interest rates are managing to generate a bit of income.
I'm not a tax expert, but you can earn up to the UK threshold before you pay tax, so just check as if you are not deducting mortgage, you may end up being taxed on the income.
We bank in the UK with First Direct and in Oz HSBC (same company) transfers between the two banks as 10 pounds, so not too bad.

Get an NRL1 from for the tax office. That way you'll receive 100% of the rent, without the form the rental agent must (by law) deduct income tax from the rent.
http://www.hmrc.gov.uk/cnr/nr_landlords.htm

You do by law have to declare the tax on your Australian Tax return and you do have to fill out a UK Tax return You need a URN (Unique Reference Number)
So long as you don't earn over your allowance, you have no worries. If the house in in joint names, you can claim 2 x the allowance.

Check out Rent insurance, to cover the rent if the tenant cannot pay. They will pay the rent for as long as it takes to get the house back so that it can be rented again. I think we paid about 250 GBP per year.
www.letsure.co.uk

Check out British gas Home Care to cover all your plumbing, electrics, central heating etc.
We had the central heating control pack up last year and the boiler before that... Well worth the money.
http://www.britishgas.co.uk/products...nd-repair.html

Recommend you use an agent (that you know is good). Our agent sent the money on time every month and telephoned with any problems or questions. The first agent we had was the worse you could imagine.... late sending money (if at all) eventually she went belly up and took my tenants deposit, so it really is important to find a good one.

One last thing, get a good tax accountant!

We had planned to keep ours and use it for retirement.... BEWARE.... House prices are so high in Oz (some parts) we have had to sell and bring the money over for a deposit. Do you homework to see if you need the equity or can afford to buy here.

Good luck

Neil.
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Old Jun 29th 2010, 2:07 pm
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Default Re: Renting out UK home - advice please!

Thanks for that Neil!
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Old Jun 29th 2010, 2:24 pm
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Default Re: Renting out UK home - advice please!

Originally Posted by h2oskineil View Post
We had a property in the UK until very recently and had been renting it for over 3 years. With the current low interest rates are managing to generate a bit of income.
I'm not a tax expert, but you can earn up to the UK threshold before you pay tax, so just check as if you are not deducting mortgage, you may end up being taxed on the income.
We bank in the UK with First Direct and in Oz HSBC (same company) transfers between the two banks as 10 pounds, so not too bad.

Get an NRL1 from for the tax office. That way you'll receive 100% of the rent, without the form the rental agent must (by law) deduct income tax from the rent.
http://www.hmrc.gov.uk/cnr/nr_landlords.htm

You do by law have to declare the tax on your Australian Tax return and you do have to fill out a UK Tax return You need a URN (Unique Reference Number)
So long as you don't earn over your allowance, you have no worries. If the house in in joint names, you can claim 2 x the allowance.

Check out Rent insurance, to cover the rent if the tenant cannot pay. They will pay the rent for as long as it takes to get the house back so that it can be rented again. I think we paid about 250 GBP per year.
www.letsure.co.uk

Check out British gas Home Care to cover all your plumbing, electrics, central heating etc.
We had the central heating control pack up last year and the boiler before that... Well worth the money.
http://www.britishgas.co.uk/products...nd-repair.html

Recommend you use an agent (that you know is good). Our agent sent the money on time every month and telephoned with any problems or questions. The first agent we had was the worse you could imagine.... late sending money (if at all) eventually she went belly up and took my tenants deposit, so it really is important to find a good one.

One last thing, get a good tax accountant!

We had planned to keep ours and use it for retirement.... BEWARE.... House prices are so high in Oz (some parts) we have had to sell and bring the money over for a deposit. Do you homework to see if you need the equity or can afford to buy here.

Good luck

Neil.

Thanks for this info Neil.

I would like to point out that any losses you make e.g. paying in extra to cover mortgage interest, repairs etc... can all be offset against your Oz tax, so you don't really lose out overall.
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Old Jun 29th 2010, 2:31 pm
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Default Re: Renting out UK home - advice please!

Originally Posted by Alfresco View Post
Thanks for this info Neil.

I would like to point out that any losses you make e.g. paying in extra to cover mortgage interest, repairs etc... can all be offset against your Oz tax, so you don't really lose out overall.
Sorry if this seems pedantic but just to avoid anyone making a paperwork error; re the bit in blue you would not "claim" 2 x the allowance per se, rather you split the rental income and expenses over the two individual tax returns.
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Old Jun 29th 2010, 2:35 pm
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Default Re: Renting out UK home - advice please!

Originally Posted by Bermudashorts View Post
Sorry if this seems pedantic but just to avoid anyone making a paperwork error; re the bit in blue you would not "claim" 2 x the allowance per se, rather you split the rental income and expenses over the two individual tax returns.
Yes, you are correct.
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