Rent or sell - Any landlords give their experience of renting out property?(14 Posts)
We have recently moved house and have kept our old property. We now have to decide whether to rent the property or sell it.
We are really struggling to come to a decision on how to move forward and would like some advice from anyone who rents out property...
- How time consuming is it?
- what are the main pitfalls ?
Our main concerns are
1) Maintaining the property as it is a 1930s semi - cost & time.
2) Time/hassle to manage property - we will use agent
3) In the long run will it be financially worth it given the property is not in london and is fairly old so expect fair amount of repair bills over the long term.
Would be better for us to sell this property and buy a modern flat instead or invest in stocks/shares maybe ?
For a bit of context DH has a very demanding job with little spare time and I have some time although not masses as I have two children 5&2.
Thanks in advance !
Whatever you do, make sure any tenant you have, has a co signer who is a UK home owner, and that co signer re signs at each six month period. Only way to make sure you can be reimbursed should there be any non payment.
Take zillion detailed pictures prior to renting supply the tenant with a disk of the images.
The main thing is to read up on all the legislation like gas safety, electric safety, smoke and CO2 alarms, informing HMRC, right to rent, legionella, deposits, insurance etc.
Bad tenants can be time consuming stressful and expensive to evict.
The managing agent should do all this but they are not all as good as they should be and the landlord could find themselves liable.
I owned a flat which my late mother rented out for ten years with no problems but after I inherited it it was nothing but hassle with non stop moaning about small things from the new tenants, expensive maintenance and then big bills and blackmail from the management committee. This was a small modern flat too!
I sold the flat and would never touch leasehold again with a bargepole. I'm currently buying a 2 bed modern semi and hoping for better luck. I am hoping to manage it myself and to be an exemplary landlord. Thats my experience anyway!
We've had mixed experience. First tenants were great, second paid one months rent then nothing for next six months, had to get them evicted which cost a fortune and never saw a penny back so very expensive. At least they didn't trash the place though. Current tenants wonderful. We looked at using agents but they seem to charge a lot to do very little. It is a hassle having to do repairs quickly - in your own home you can happily manage without the shower for a week or two but as a landlord you really do have to sort things pretty quickly. DH finds the experience pretty stressful since he does most of it but when the tenants pay the income is very useful. Do really thorough credit checks, interview applicants, get references and go with gut feeling - don't fall for sob stories either.
1) don't expect the agent to do much; be pleasantly surprised if they do. The buck stops with you. It is YOUR business and you need to monitor everything. YOU also need to be fully aware of your responsibilities; gas safe, deposit protection, right to rent checks, etc etc.
2) get all the insurances: buildings, contents, legal expenses, home emergency, malicious damage, rent guarantee. So cost these up.
3) If you can't afford a void period, you can't afford to rent it.
4) the place needs to be immaculate, EPC rating D or above, everything working.
5) get a professional check-in from an inventory clerk.
6) tax on income. Capital gains if you haven't lived in it for more than 18 months.
7) Possible hassle - demanding tenants, wrecking tenants, extra people moving in, non payers, tenants who won't leave.
do some sums. What's it worth? What will it REALLY rent for? What are your costs going to be? Is it worth it?
I you rent be just remember that there are bad tenants out there. Make sure you keep a percentage aside out of the rent every month to build an emergency fund. Also if the property is still mortgaged make sure you can aford to pay it if the house goes unrented for months. If still mortgaged you'll have to get permission to let of your mortgage provider or a buy to let mortgage. Bear in mind to law may be changing soon so you can no longer of set to mortgage intrest on your tax. Also soon will be extra stamp duty if you buy a second home.
I have had good and bad tenants. The last disapeared of the face of the earth. Left months of rent arrears and £7000 worth of repairs. So its not allways easy money. Luckily I am financialy comfortable so can absorb the months of no rent, still paying mortgage & £7000 repair bill. The insurance company were very tricky and no help. All so my property manager was useless (I have got rid of them and going alone now). My biggest advice is if you do it make sure you can afford it if all goes wrong
Tax on profits and can only deduct interest portion of mortgage payments but that's stopping soon.
The tax return is a PITA
Ask your agent about their contractors. IME agents used to just ring me when there was a problem and their contractor was v expensive so I ended up getting my own people in and then thought I was paying for an expensive phone service for the agent and then collected rent and sorted repairs myself. No problem as still used agent to set up contracts and do checks deposit protection inventory etc when tenants moved in.
Agree if you can't absorb 6 months of no rent, legal fees to evict tenants and expensive repairs don't do it
Also bear in mind capital gains tax when you sell
Also bear in mind if things go wrong it can get stressfull. I was completely gutted to see the state the last tenants left me property in. You wouldn't believe the things I found. Obviously some people never have a problem. That is part a mater of good vetting and part a matter of luck. Luckily I have never had to deal with a lengthy eviction. But if you already have a stressful life consider the impact on your personal life if there is problems.
I would also recommend meeting the tenants personally before agreeing to let to them. If I don't get a good feeling about them I will not let my property to them! Trust your instincts !
If youve got a nice house in a nice area and charging decent rent, you should get nice people in and it'll be stress free (from personal experience).
I always meet the tenants and try to be good to them working on if you're good to them then they'll be less likely to let you down. (Worked so far for me).
Thank you all for your comments, apologies for such a late reply i thought nobody had replied as i didnt get the email to to say there was a new post...thank you :-)
Its still empty at the moment, have a friend who is selling his properties and recommended investing in a fund or directly in stocks as he got fed up with the hassle factor involved with property ...............need to think over our options.......any thoughts anyone ?
have you done the sums I recommended? That should help you decide if the property is going to be worth renting out.
i find property a bit of a safer gamble (never done stocks and just not comfortable starting until I have a bit of a buffer financially)
My first property I rented out, just happened out of chance. When I realised how easy it was I was keen to invest again in property. I'm now more laid back about it as i know what to expect each year. I would never buy a property in a 'rough area' and I always rent to young professionals who seem to be relatively hassle free.
Renting's a pretty stable option, but do a thorough bg check and make sure you've seen bloody good references from your prospective tenant's last landlord.
Another downside is inevitable damage to the fabric of the building. Part of the deal even with the best tenants.
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