britnyank

Does anyone rent out their house back in the UK? Any advice for or against this? Is it a good plan or not?

mrcusa

It was great whilst prices were going up 20% pa.

I wonder how long it will be before that happens again?

Will the rent you receive cover the mortgage and costs?

Do you need the equity in the States to buy something there?

Elvira

your question is far too general. Depends on the type of property and location, and whether there is a demand for it. What sort of state is it in - do you have the $$$ to do it up so it is suitable for letting?

Would the expected rent cover mortgage and other outgoings, as well as maintenance, repair, periodic redecorating/recarpeting and replacing of appliances etc? Also, what is your ongoing financial situation - could you cope with a 3-4 months void?

Can you find someone to manage the property whilst you're away? And how easy would it be for you to 'pop back' if the need arose?

Get some books on rental property to start with (local libary should have some). Also, the 'Properties - Practical' board at the Motley Fool contains a lot of useful informaiton: www.fool.co.uk.

bxpuser7543

if you want to rent out a property,why not sell the UK one and buy one near to you so you keep an eye on it yourself because i know the stress of relying on others to do it for you and to do running repairs etc

britnyank

We had planned to put our home on the market before moving over, but today someone suggested it might be better to hang on to it for the next few years as property prices increase.
So that got me thinking. I haven't even talked this over with hubby yet - I was trying to find out some more details first!
I've been checking various online websites etc dealing with legal implications etc. I know I will need to look into the feasibility of actually being able to rent it out in this area - planning to call some estate agents tomorrow!
There is just this tiny part of me thinks that if we can manage to keep the house for a few years, i.e. the possible pitfalls notwithstanding!, I have a lifeline back into the UK if I can't settle in the States (I've been reading some of the 'homesick' posts!!!!)
I was just wondering if anyone else does rent out their home, and what their experiences are?

bxpuser7543

i knew someone that used an agency to look after it and do repairs etc,but they got less income as the agent takes his/her cut,but when the place got trashed,the agent put it all back together at no cost to my friend.

NC Penguin

Are you coming to the US on an immigration visa or an employment visa? If it's the latter, you might want to consider holding onto your UK home just case you're made unemployed in the US (and before you get a GC, if this is applicable).




NC Penguin

neil

I've been renting my flat out for the last few years. It is in a desirable location and as I'd bought back in 1997 the rent was almost double the mortgage. Don't forget the other fees though - the estate agent will take about 10% for renting it out and then if you want them to manage it they take about another 5%. Then of course there are the tax implications. If you keep it rented for more than 3 years then you will have to pay capital gains tax when you sell it (an accountant friend of mine thinks there's some sort of loophole about living in the US that means this might not be the case). I finally decided that it wasn't worth it and now it's up for sale. I had two tenants who didn't move out when they said they would and didn't pay rent for that time. By the time they were out I'd lost a new tenant and a total of about 2 months rent. Also, you'll never know what condition it could be in when you decide you want to sell. It was worthwhile for me for the time I've been doing it so it all depends on how much rent you'd get and how easy it would be to rent it out.

Englishmum

We've been overseas for 10 years and have rented out our house in all that time. We did have one problem tenant but overall most of them have been long-term - but we don't overcharge on the rent - it's a little less than the market rate, so they're happy to stay.

As stated above, don't even think about selling off your UK property unless you have a green card....quite a number of expats on employment related visas have unexpectedly had to return to the UK if they've been made redundant...or it just didn't work out for them in the States, perhaps due to a marriage breakdown or sick parents/relatives back in Blighty.

The good thing is that even if you buy a house in the US, you can still claim tax relief on your UK mortgage, plus tax relief on property repairs, management fees etc. You can even claim on returning to the UK annually to inspect your rental property (which we don't do as the compay pays for home leave fares for our family once a year). We don't make enough 'profit' on our UK rental income (taking into account our personal allowances) to pay UK income tax. We have the rent paid into our offshore bank account and the money is useful when we have trips to England....and maintaining our daughter who is a student in London....

On the other hand, if you're convinced that there will be a property price crash in the UK you might want to sell the house and invest the money in something else....but after reading the 'Australia' messageboard there seems to be a heck of a lot of families in the UK who want to sell their houses to finance their move Down Under and they can't even get people round to view, let alone buy the property.....you could have a 'for sale' board up for months unless you are prepared to take a low offer I guess.

Big D

we rent our house as plan to return in a few years. The rent doesn't cover our mortgage but wanted to stay on the property ladder and we get property here through work so can't lose really. Did a deal with a friend of a friend which was good deal for them and and us as the agents costs are high - if we hadn't found our tennant would have used an agent for peace of mind etc. consider furnished or unfurnished - depending on the type of house this can affect the desireability - but you need to comply with safety regulations. You will also need gas safety certificate - but oddly not one for electricity!

neil

You do need an electrical safety test for any electrical appliances you leave behind.

Elvira

We have rented out our house for the past 4 years and plan to continue doing so. Partly for financial reasons (hoping the market will pick up at some point...), partly practical (if it didn't 'work out', or if and when our sons want to return), partly for 'emotional' reasons (I'm just not ready to say good bye to my home...).

We have had 3 sets of tenants during this time, and no real problems. At one point we had a 2.5 months void because we preferred to wait for the 'right' tenants to come along rather than go for a multi-occupancy let. I would advise against the latter, because even though the contract will say that they are 'severally and jointly liable' (or some such googledegook...), you can still end up with problems if one tenant is a slob, doesn't pay his share or decides to move out.

The important thing is doing your homework, especially as to whether there is a market for your property, and making sure that the property and everything in it is in excellent condition. Of course you can get agents to 'manage' it for you, but the cost is dear and you pay extra every time they actually need to do something. (For instance, if renovations or repairs are necessary, they'll take 10% of the cost. And believe it or not, even though they claim to get competitive estimates, it'll cost you more than the going rate...)

Also remember that all fees etc are liable to VAT... However, it is always possible to negotiate the fees - just because their bumf says they'll charge 15% doesn't mean you actually have to agree to that.

If at all possible, try to meet potential tenants yourself. Gut feeling is probably equally (if not more) important when vetting as looking at their credit scores and employment history.

Because I go back at least twice a year and we know a friendly builder, we have so far managed the property ourselves. Everytime I go back I check whether anything needs doing, either now or in the near future. The aim is to get things fixed before they break... We also have British Gas 3-star cover, which is a bit of a rip-off but is worth it to us because of the convenience. (NB: you'll need an annual landlord's gas safety check, which is included with the 3-star plan). An electrical check is advisable but not mandatory (or at least it wasn't 2 years ago.).

As far as decor is concerned, neutral is of course the mantra, i.e. gardenia walls and beige carpets, quality curtains/blinds (also neutral - no florals! ) If your appliances are more than a few years old, you may have to replace those too. I would recommend renting unfurnished - less hassle and most potential tenants seem to have their own stuff - unless you go for the lower end of the market.)

So, there is a lot of work involved. Only you can decide whether it is likely to be worth it for you.