Is anyone a Landlord?

[Mamazonabroomstick]

Could we get some advice?
DP owns his house. he practically lives with me anyway and we have discussed the possibilty of making this permemnant.
He doesn't want to sell the house as A) its not exaclty a favourable market. and B) obviously its better to be safe than sorry and keep hold of it just in case.

We're thinking that renting it out would mean that he could get the mortgage covered plus have the house used.

What do we need to know?
What are all the invaluable bits of information you wish you had known prior to becoming a landlord? what sort of things do we need to make sure we know/do before getting a tennant?

This will all be completly new to both of us so all info will be gratefully recieved

TIA

[FiveGoMadonTheDanceFloor]

Find yourself a good agent. You will pay but they will take care of all the day to day things that can and will go wrong, like organising a plumber etc.

[abroadandmisunderstood]

We moved abroad and after mulling over the 10% agency fee, decided to pay an agent to oversee our house.

They have been very good - checking references and updating us every month on the house, breakages. That is the one thing that niggles me...the 3 people in our house seem to block drains and break the cooker so often.

[LyraSilvertongue]

Yes, get an agent to find good vetted tenants. You can manage the property yourselves and pay a lower agents fee if you live near enough to sort out things that may go wrong.
When calculating how much you could get for the property, remember to include void periods (when no-one's living there, eg between tenants).
Also, if poss, max out the mortgage on the rented property rather than the one you're living in as you will pay less tax.
There is a 'Letting properties for dummies' book (not sure that's the exact title) which might be useful.

[iheartdusty]

he must get mortgage company permission, and they will sometimes charge a higher interest rate.

he may need to change to a different insurer for buildings insurance when he stops being the occupier (and it could be cheaper).

The main thing is to MEET the tenants and form a good relationship of mutual trust with them - then they are less likely to mess him around and may take better care of the house than if they just regard him as a faceless 'owner' out to get the rent and nothing else.

Choose an agent which is a member of ARLA (association of letting agents).

[ThingOne]

Agent, speak to mortgage company (they need to approve it), clear property of anything you care about. It's no longer his home, it's a business.

Make sure your agent knows you want to look after your property (and thereby your tenants) properly.

Keep good records for tax man. It's a very easy page to fill in.

[LIZS]

Tax implications - Income Tax is payable on any net rental income(ie the rent charged less mortgage interest and expenses). Potential Capital Gains tax liability should it cease to be his principal private residence for more thas 3 (? iirc ) years and he then sells it.

Gas Safety Check required annually and a one off Electrical inspection . Soft furnishings have to comply with fire regulations. Do a meticualous inventory , take photos of any damage or specific items (we lost a bird bath ). Include the likes of maintaining the garden in the lease or have soemone come in to do it or you/dp if local.

Can he afford it if it lies empty for a while - utilities, council tax etc are payable (presumably so as it is similar to now)

[iheartdusty]

rule of thumb is to have enough in the bank to cover 3 months outgoings - mortgage, council tax, water rates, electricity - for empty periods or if there are problems collecting the rent.

[iheartdusty]

also you need an EPC (energy inspection check -google it!)

costs between £50-100 one-off

[Mamazonabroomstick]

Great advcie so far. thanks all.

It's a bit frightening at the moment so the more info we et from people that have been there and done it the better

[feetheart]

An agent may be the way to go but I ended up with a shocker (had to take them to Small Claims Court 3 times to get rent money from them and was lucky to get it as they did a runner soon after with a lot of other people's money )
By that time I knew I could do it myself and have done so for the past 3 years. I now also manage a house for a friend.

My advice would be:

1. Check out the Residential Landlords Association who have masses of information and a brilliant help desk
2. Get Successful Property Letting which has lots of straight forward advice