Jen1977ni

Ok, the OH and I are due to be in Oz by the end of January, start of February 2010. I have no faith that the house is going to sell, so instead I'm going to put it up TO LET.

My mortgage company are going to let me stay 'interest only', which will make it much easier to cover the mortgage with the rent I charge. All I've to do is write them a letter telling them I intend to let it out, which is also great. There may be a shortfall which I will have to make up, but hey ho, needs must.

I am aware that I will have to change my B&C insurance to a Landlord insurance, only covering the actual building, and have had a few reasonable quotes about this so far, great. (Is there anything in this landlords insurance that I should be looking out for?)

Also I know I need to have my EPC done before a tenant moves in, no problem, I've a friend who does those.

What else is involved in the letting out of a house? I'm aware that I've to leave a fridge freezer and a washing machine, I'll also be leaving a cooker and slimline dishwasher because I'm so nice.

Is the fact that my mortgage and other house related outgoings wont be covered by rent, mean that I wont be taxed etc. What legal things do I need to do? I'm a bit naive about all of this and want to make sure I do it properly.

Also, when the house is sold, eventually, when the market picks back up, I know I'll have to instruct a solicitor to do it all for me, like giving them the power of atorney type thing, but will I be taxed on any equity I make or what? (Should I give the solicitor this power before leaving the UK or instruct him once the house is on the market by post/email/phone?)

Sorry for such a long post, but I don't wanna cut corners and so am asking the advice of those of you already in the same boat!

Thanks for reading,
Jen and Si

Zenshin

Hi We currently rent out 2 properties and when we move to Oz we will let out our house too.

With the 2 properties that we let out, our rental income does not cover the cost of the interest only mortgage + agents fees + service charges (apartment) + insurance. When we do a tax return here the fact that we have more outgoing than incoming means we have a tax loss.In the Uk you can't set rental losses against your income. However, once we move to Australia this loss will then be taken off our taxable income (provided you are required to declare foreign income - depends on your visa). This means you will have slightly less tax to pay.

I am not sure who told you to leave a washing machine and fridge/freezer. It is not necessary. Our 2 properties are apartments so they already came with a small built in fridge freezer and washing machine. However, when we have asked agents to quote rentals for our house they have said that the less electricals you leave in the house the better. If anything you provide in the rental i.e washing machine, fridge, dishwasher breaks down then you are liable to have it fixed or replaced. We had considered leaving our American fridge freezer but it won't add any value to the rental income and I certainly wouldn't want to replace it for a tenant if it broke down.

BTW you also need to fill in a form to register with the HMRC Non Resident Landlord Scheme as your tenant or agent would normally be required to withold tax from the amount payable to you. Once you register, then your tenant or agent would pay you the amount in full and any tax, if payable, can be paid once you do your UK tax return each year. If you are likely to make a loss then this is the best option. Also make sure you get a current market evaluation of your home at the time of your departure. This will help you determine the true capital gains if you decide to sell your house later on down the track. Tax is payable in Australia on capital gains. Once again this is all subject to what your tax position is in Australia.

Kingseat

Please ensure you get malicious damage by a tenant cover with your insurance. A tenant transhes the place and standard insurance won't cover you for things like damage to carpets, flooring, doors, walls, lightfittings, curtain polls and especially things like your white goods if you do leave them - I always do leave them.

Along with your EPC you will need electrical appliances tested and a gas safety inspection.

Nailed it

I am looking at letting out my property too when I go, this thread has been useful

http://britishexpats.com/forum/showt...+loss+property

What is EPC?

Jen1977ni

http://epc.direct.gov.uk/index.html

Apparently if you don't get it done you can be fined £1200, it's valid for 10 years and my mate is doing mine for £70!

Jen1977ni

No gas at this house, only oil, so will get the boiler serviced before we go. I take it having electrical appliances tested wont be an expensive issue. Can you find anything official that refers to my not having to leave appliances behind, cos that'd be fab, and as you say, one less thing to worry about!

Nailed it

Could you not just put a clause in the rental agreement that the maintenance of the appliances is not your responsibility. Would that work?

Jen1977ni

Flip, I dunno, anyone know if this is a possibility? Ideally I'd like to take the fridge with us as it's not very old and really quite nice, and I think we could easily fill it with wine and beer in Oz lol

Jen1977ni

Fridge - 2 yrs old
Dishwasher - 1 yr old
Cooker - 4 yrs old
Washing machine - 7 years old

and ideally I don't want to have anything to do with them if/when they go wrong!

JenniGee

Jen...several companies offer white goods insurance...have a look here:

http://www.moneysupermarket.com/comm...nce-19236.aspx

Lots of people think it's cheaper to just replace when necessary though, as there is always a cheap second-hand fridge to be had...organising that from a distance might well be a problem though

Jen1977ni

Brill, thanks JG! Ur a star!

silver

We rented our UK home out for the last 3 years.

Be prepared to have things that need to be sorted out by the agent and the odd bill for maintainance (we actually have had more than our fair share this year) and the odd few/weeks or a month empty. Do not get too emotionally attached the property as its a business as such. Australian negative gearing is good if you are making a loss.

With your white goods you will be liable for there maintainance and upkeep so I would suggest best not leave them as they are a liability and a cost for any service contract + they probably won't increase your income.

One thing is with such low interest rates currently what will happen when the rates go up, be sure you can afford to keep paying a higher mortgage as selling from a distance will be more difficult and you may have to pay rent here and mortgage on an empty property there. With the current interest rates so low I would expect most residential landlords to be making a profit on the rent at this point in time unless they are on a fixed rate taken prior to the GFC.

louise

Hi Jen

We have just moved into a rental in the UK, there wasn't a fridge/washer etc in here. The only appliance was a built in cooker.

When we looked into renting out our property in the UK (it wouldn't sell) the agent told us that we would be responsible for the upkeep of anything we left.

Also, please please please check that you have adequate insurance, the people who lived here before us (mum, fella and 2 young kids) abused the place quite badly, to the extent that most of the handles on the UPVC window frames had been snapped off, banister rail off the wall, graffitti etc. All that had to be put right before it could be let to us.

Sorry, I don't want to alarm or upset you I just want you to be fully covered

Jen1977ni

Flip me that's shocking! I'm going to make sure my insurance policy has malicious damage cover, and the more I think about it, the less I want to leave my appliances, or at least get it written into the contract that if they break them, TOUGH lol

Kingseat

Just take your applicances out. It won't cause hassle. I put them in mine as I have several 1 bed flats that are usually starter places for people. It doesn't cost me much as I usually get them secondhand etc.

Yes, as I mentioned above, please make sure you get malicious damage cover - they are unlikely to offer it unless you ask though. Belive me, I learnt the hardway and it cost me about £4,000 to put right once the feckers had left!