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Ricesnaps
06-03-2006, 18:54 PM
OK,

I need to know everything from the very basics...

We are going to rent out our house for 6 months and rent in the place I have a new job - so in effect we can afford to rent a house from the money we make on ours.

We already have a "friend" who is going to rent from us and has said she will pay deposit and 6 moths rent up front.

So what else do I need to do?

Tell morgage company?
Insurance?
Contracts?

I really know nothing!

Help?

davidjohnbutton
06-03-2006, 19:22 PM
Yes all three

put all three one by one in the search facility for loads of info.

One small point, you will be asking, not telling the mortgage company - it is not a right to let out a property that is under a mortgage and if you didnt tell the MC and they find out, they might well foreclose and repossess!

CoffeeCup
06-03-2006, 20:41 PM
Yes all three

One small point, you will be asking, not telling the mortgage company - it is not a right to let out a property that is under a mortgage and if you didnt tell the MC and they find out, they might well foreclose and repossess!

I read somewhere that not telling the MC can invalidate your insurance?

davidjohnbutton
06-03-2006, 20:48 PM
Only likely if the insurance is tied to the mortgage.

You should tell both insurance and MC - then you have covered both angles.

Ricesnaps
07-03-2006, 04:58 AM
Thanks for the advice so far, but I am going to need someone to go right to the begining - I'm a first timer here and haven't got a clue what I MUST do and what I don't need to do.

davidjohnbutton
07-03-2006, 09:00 AM
With respect, methinks you are too lazy to use the search engine or to look on the main pages of this site for advice which has already been stated in the forums a thousand times.

You would rather that one of the more experienced members should guide you by the hand stage by stage - great - I will do that - tenner an hour suit you?

In my opinion this forum is for helping people who have hit a stumbling block on specific parts of the legislation regarding renting houses whether they be a landlord or a tenant or indeed as sometimes is the case - both. It is not for helping people stage by stage from the beginning. I have already told you you need to advise the mortgagees and insurers - surely you dont need me to tell you how to do that. There are loads of rental agreements about on the internet - find one that suits you or copy and modify the basics of one of the pre-printed ones.

There are also loads of books - would you really start stripping your car down without a manual for it to tell you what to do? It seems thats just what you want to do with your house!

Paul_f
07-03-2006, 09:06 AM
A bit more detailed advice here!


Make sure you have WRITTEN confirmation from your lender that you can let out your house.
If they try and increase the interest rate as a result tell them you will consider remortgaging if they do - it usually shuts them up!
Your insurer is almost bound to remove any "all risks" cover (if you have it) whilst your tenant is there (even if it's a "friend") - make sure you retain this or ensure the tenant is covered against any accidental damage to your property, carpets, curtains, (and/or furniture if you are leaving it).
Only use a regulated letting agent (I suggest you do this as you say you don't know what you're doing). This means one of the principals, partners of directors is a member of NAEA,ARLA or RICS. This gives you quite a lot of protection, and redress should anything go wrong. They will also make sure the tenant is references too which in many cases enables you to insure aginst non=payment of rent. If you don't use an agent you could be in a lot of trouble, and any old tenancy agreement won't normally do. Your lender might also want you to do this.
Although your prospective tenant is a friend, he won't stay one if things go wrong. This is a business transaction so treat it as such!

Ricesnaps
07-03-2006, 09:20 AM
With respect, methinks you are too lazy to use the search engine or to look on the main pages of this site for advice which has already been stated in the forums a thousand times.

You would rather that one of the more experienced members should guide you by the hand stage by stage - great - I will do that - tenner an hour suit you?

If you really must know I have spend hours and hours combing the internet and this forum looking for help and advice. I have even popped in the search phrases you suggest into the forum search. Please don't suggest I am too lazy. I simply came to this forum as a last hope to see if people could give me some general advice. Glad I'm not likely to stay if all of the members are as rude and unhelpful as you are!

However, HUGE thanks to you Paul for you concise and useful advice. I will pick the phone up and talk to my morgage lender right now!

Paul_f
07-03-2006, 09:32 AM
I have to say David is not rude - that's usually my job! He's quite right in that all the information is here on the forum. If you troll through all my posts (and there are hundreds!), you will find a great deal of information that you might find useful.

P.Pilcher
07-03-2006, 09:48 AM
Good heavens DJB - are you really only charging a tenner an hour for your services?? Cheap at twice the price I would say when considering how much an inexperienced landlord could loose if they hadn't the time to do their own homework properly.

P.P.

justaboutsane
07-03-2006, 10:20 AM
I think DJB is right. there are some people out there wo just want "spoon feeding" .. I am not saying the OP is one, although the way the post was worded it did seem that way. The OP has now clarified that they have trawled through this minefeild of a site and is now looking for a definitive list of Dos and Donts! .. Unfortunatley this is not really a black and white answer to this!

I have noticed on this and other forums that some ppl just want you to hand them the info on a plate.. a prime example is someone asking for how to go about renting a garage.. the reply was that they would need a common Law tenancy... to which the OP replied... Whats one of those and where do I find it! ... People need to remember that there are such things as search engines. If you search and still cannot fond the answer then by all means post... but do not expect others to put the time and effort in when you can;t be bothered!

Whoops.. soap box out again! Sorry!

Ricesnaps
07-03-2006, 10:54 AM
And I would suggest that the positive point here is that I am actually trying to find things out rather than just downloading a contract and renting. All I'm trying to do is see the wood for the trees.

justaboutsane
07-03-2006, 11:33 AM
You are showing a positive attitude instead of just throwing any old Joe in your property and expecting it to be ok! This is a very complex area of law where the tenant is very protected and the LL is not. One of the best people you can listen to on here is paul_f!

davidjohnbutton
07-03-2006, 11:53 AM
Ricesnaps - your original post said at the beginning "I need to know everything from the very basics..." You asked three questions which I answered. I concur that you have since stated you have trawled the search engine etc.

My emphasis is still the same - get a good book such as the Which Guide to Renting and Letting and read through it. With the exception of advice from Paul F and a few others, there is a danger that you will become clouded with differing opinions passed on as factual law. With a good book or following the various advices on the main page of this site, you will not go wrong.

If you are in any doubt as to your capabilities - get a professional to do it like Paul F says.

P. Pilcher - yes I do indeed charge a tenner an hour for my services - primarily as pocket money because I have my own portfolion of houses to manage and because that is mainly run by computer - I fill in spare time by doing chargeable work for other landlords and indeed other letting agents - mainly process serving of notices and sorting out the mess that others make (for example, a local agent trying to repossess on rent arrears by using an invalid S8 notice and then issuing a S21 accellerated possession summons which promptly got thrown out by the judge wasting £150 and allowing the rent arrears to build up even more!!!! How the hell so called professional agents could make this mistake beggers belief). I find that just charging a tenner an hour (plus mileage) gives me plenty of business and a good name - it is not a case of paying peanuts and employing monkeys!!!! The same people/agents come back to me time and time again.

Ricesnaps
07-03-2006, 14:47 PM
OK, I am getting somewhere...

Spoken to my morgage company, who need my reference number (surely in the world of computers, a few security questions would have located my file, but such is life) and tell me that I will need to "apply" to rent out my house. Now the lady on the phone did tell me a few of the things they would look at - have we always paid on time, who's going to rent, are we insured.

Without wanting to be spoon fed (and I may well go and buy the book, but unfortunately by the time I actually get to a shop, or the item is delivered from the helpful guys at Amazon, it will probably be too late, which is a lot of the reason I am on here!), has anyone been through the morgage company aplication and what's your opinion. It will make life really really hard if they say no - I guess maybe I just have to wait and see - but I would be grateful to get some reasurance if nothing else.

Paul_f
07-03-2006, 17:47 PM
Ricesnaps! Don't buy a lettings book, because it will be out-of-date, so borrow it from your local library. There's new legislation (Housing Act 2004)coming in on 6 April, and more in October, and if you really want to know all about it go to www.odpm.gov.uk/housing and you'll just probably get more confused! I can't explain it all on here 'cause I'm likely to die before I finish!

Your lender by the way won't say "no" - they never do unless there are arrears.

I've given you the benefit of my advice so I can't do much more.

My daily rate is equivalent to £58.75 per hour! But then again I earn it and nobody has yet said it isn't anything other than good value! I can generally save you a lot more than what you might have to pay me if you get it wrong!

Ricesnaps
09-03-2006, 13:18 PM
But youe see, I have come here because paying somebody to give me the advice seems not only stupid in this day and age of internet driven information and because by the very nature of what my wife and I need to do, we need to save as much money as we can. I am very greatful for the advice that has been freely given to me, but surely that is the whole nature of a discussion forum like this. As a regular member of my industry related forums, that is exactly what happens on those forums and we are able to benefit from the experience of others.

To get back on track, the morgage company have said yes, so I am on to the next stages. You never know, by getting all the answers and sharing my experiences, maybe the whole thing will be clearer for somebody else - because there is currently very little on this forum to help, although I guess if you wanted to try and pull it all together from odd littel bits you might get somewhere!

So now, I assume I need to pay tax on the income I get from renting our house out (and before anyone else moans at me, i WILL have a search on the forum as well), but I am wondering where the line is drawn. We are renting the house in order to pay for the rent on another we are moving into. Can we not set the rent we are paying against the rent we are getting - or isn't it as simple as that? If it's not, are there top tips for reducing the tax burden?

I also now know I need to talk to our building insurance company, but at the same time, should I be talking to the life guys too? And how advisable is it to get insurance to cover any damage caused by the tennant - or indeed is there such a thing?

Have I missed anything?:D

MrShed
09-03-2006, 13:23 PM
With regards your tax question, you may be better off postingit in the Tax questions section....the expert over there is Karongo, but he doesn't usually stray too far over here :p

Although someone else here will probably know anyway to be honest.

RichieP
09-03-2006, 15:09 PM
Hmmm. Who might know about tax? http://forum.overnet.com/images/smiles/eusa_think.gif

Ah! That's it. The Inland Revenue!

As for nsurance, do a Google for landlord's insurance or try some of the ads on this site. Get a few quotes, but you'd be wise to insure for any damage. You can also get insurance to guarantee rent, but you need to follow fairly strict guidleines to get it.

Life insurance shouldn't be affected but the only way to find out is to tell them what you're doing. Last thing you want is to want to claim on something and they turn round and say you should have informed them about this.