Husband wants to rent our house out and I don't

[inappickle]

Really clashing with my husband about this and we just have such different opinions I’m not sure what to do. Financially we’re ok, he makes out it’s very doom and gloom and we do have a big mortgage but we earn £68k between us and I’m only working 3 days a week, we have an expensive car (£300 a month) and we don’t budget or skip on luxuries so we do have ways in which we could cut back, as well as extra earning potential if I was too go back full time if needed. We have a young child who has been in an expensive private nursery and another baby due soon.

My husband has an opportunity for us to live at his work, it’s secure employment and the accommodation is nice (nowhere near as nice as our current house) and in a nice area I will give it that we wouldn’t need to drive as much and would be walking distance to kids school etc. He is desperate to do so, it’ll cost us half the price of our mortgage inclusive of bills and he wants to live there and rent our house out. He says it’ll pay for our retirement and set us for life. I hate the idea of someone else living in my house, we designed it ourselves and it’s my home. I hate the idea of living somewhere that isn’t ours again. I hate the idea of living where he works so he never switches off. This is our family home we worked so hard to build and I don’t want to leave. He also talks about renting it out at what he could realistically get for it but it’s more than our mortgage and I feel like it’s just being part of the problem and ripping off people that need housing.

I want to enjoy our lives now, but he’s so set on sorting ourselves out ‘for life’ and that our retirement would be sorted we’d be able to travel and save up loads in the mean time and it all just seems too far fetched and at too big a cost

Who’s right here? Am I being too attached to the house and possibly missing a good opportunity or is he just getting caught up in this idea that being a private landlord will set him for life when it isn’t realistically that straightforward

Annual boiler inspection.

Electrical inspection.

Carbon monoxide detectors
Wired in smoke detectors

Myself and DP early similar (actually slightly more) our mortgage is £450 a month and we don’t have any cars on finance and we are absolutely shitting it still… if we had a way to take it another income like renting a house we 100% would

Could you afford all the new upgrades to make your home lettable though?

I would go for it. If you can at least do it until the kids are out of childcare and you can go full time. I would check though if you can decorate the rental, that makes a difference

I would do this for a set period of time - say 5 years and with the aim of overpaying or paying off the mortgage on the house. Especially if it would set you up financially and mean you can stay part time while your kids are small if that's what you want.

Before giving advice which is going to affect someones life, you may want to do a bit of research.

I’m a landlord op. It sounds all great on paper. In reality, you’ll probably not see that much of a difference financially when you’ve paid the extra tax and on costs, which a number of people have mentioned - set up costs including gas / electricity checks, ongoing agency fees, EPC, insurance, potential increase in mortgage rate etc.

There is no way in earth I would rent out my house, which has been lovingly remodelled for the short term as we could lose far more than we would gain. Especially true with problem tenants and there are very few people, who will look after your home as well as you. I would perhaps do it for a decade as a minimum I could return with the mindset that I may have to replace the kitchen, bathrooms, floor coverings etc. Then you’d have to look how much all of that would cost to replace and you may well find yourselves at break even.

I agree with your husband on this, but financial security and saving for the future is high priority for me.

This is just the age old money versus happiness argument. Your husband’s priority is money and yours is happiness. I’m sure there’s research that shows that, over a certain amount, more money doesn’t make you any happier. Maybe try and find something like that and show it to him.

I don't hate the idea, but I don't think it will generate nearly as much money as he thinks it's going to.

You have to pay rent, so half the house income goes towards rent.
You then have upfront costs - fire alarms, fire safety checks, potentially swapping out some furniture, potentially storage for some of your bits and pieces.
You've got wear and tear to cover.
You have to pay tax on 90% of the income - for me personally, that usually pushes me into another tax bracket, so that's worth checking very carefully.
You will need to change your mortgage to BTL which is usually a higher interest rate.
Repairs etc have to be done and done right away, you can't 'make do' like you would in your own house.
Insurance is very necessary and not worth skimping on!

And that's before you factor in the risks: what if you can't let it, what if your tenant defaults? Every day there's no rent coming in from your house, you're still paying rent on the work house...

That's not to say don't do it, but it's not going to be a cash cow that sets you up for the future...

Oh some of these stories, we were quids in on ours and we used an agency to manage it. I suspect it depends on the standard of your house, new boiler blown windows is usually due to age and poor maintenance.

Fantastic opportunity. I’d take it in a heartbeat. Go for it!

Yep. Me too. You could make it really nice and agree to redecorate your own home when the tenants move out.

When you are young, it's so easy to see retirement as forever away. It's really not.

Has he looked at what it will cost to get out of your current mortgage and switch to a buy to owt one which is often significantly higher?
You can't just start renting the property without the correct mortgage, any insurance you had would be invalid, he also needs to register with a proper deposit protection scheme, gain gas certs, check if it needs doors changing, have interlinked smoke alarm system etc.

It sounds like he thinks it's a magic bullet when reality these things cost a lot of money and very few landlords cover their costs for the first few years!

I don't think profit is actually the main benefit of keeping the house. Knowing you will own a house when he leaves the job is the big benefit. You avoid the risk that goes with being out of the property market.

I think you should get him to create a detailed spreadsheet showing all the numbers for a set period - say until your DC leave primary. (Some assumptions will need to be made re mortgage repayments).

Get him to factor in everything including:
-any investment you'd need to make to your mortgage company to convert your current mortgage to a BTL one
-cost of readying your property for tenants (EPC, updating lighting to meet safety regs, etc)

• the annual cost of tax on your rental income
• monthly fees to lettings agent and sign-up fees
• new monthly outgoings at new home

Also get him to factor in any void periods.

If after that the bottom line looks promising and would make a genuine difference to your future stability then I'd consider it.

A landlord cannot end a tenancy agreement. Only a renter or a court can do that. A landlord can serve notice that they want the property back but only a court can order a tenant to leave a property.

I totally agree that's the dilemma. I vote happiness now and pulling the spending in a bit.

Also agree that renting one house out does not mean financial gain,as others have said, there are risks that outgoings on repairs and having it to a rentable standard can far exceed the market rent. My own flat now, if rented, wouldn't cover all the costs as I' did the maths when considering it a few years ago (when mortgage & service charges rates were lower).

It's far harder renting out your own loved family home than being a professional landlord. My ex and I rented our house out when we came to the UK for temporary work reasons. The first trip back to see it was a bit heartbreaking as although the tenant hadn't trashed the place the previous pretty garden was very unloved and whilst the house was still OK it was understandably far more bashed about than if we'd lived there taking care of it. It was hard to see that. It ended up being rented for 5 years. In that time, one tenant stole all the curtains, loads of appliances broke, another tenant was evicted with huge rent arrears and left drug paraphenalia to be cleared up, along with lots of damage to repair. If we had moved back in it would have needed a lot of work to get it back to what I'd have wanted.. As it was we divorced and sold it as 'with potential'. I still feel a bit sad about that house.

Why will you be + £850? Is that the childcare? Don’t forget the cost of wraparound childcare and the costs change as they get older. At one point we were paying £750 in childcare but that’s been replaced with £135 wraparound care, £200 ish on clubs as well as school dinners for older child all additional things that come with their clubs, school events etc.

I work part time and we have savings. I don’t spend loads on myself and we don’t go abroad because we’re not building savings up. It sounds like you’re spending a lot day to day but think about building up savings.

The boiler was 8 years old ditto the windows

Op this rang alarmbells for me when you said your Dh wants to be a LL for passive income...there is no such thing any more.Show him this thread.

I have just sold all but 1 of my BTL properties as they were not making a profit despite only 50% mortgages, due to the tax situation, and more and more regulation. A management agent will take a fairly big slice of your rent, then you have to pay tax on the rent, BEFORE paying your mortgage with only a 20% tax allowance. It may well tip you into higher rate tax payers which can wipe out any profit at all. It is perfectly possible to end up worse off with a whole load of risk.

It is now highly risky being a LL, if you get bad tenants who stop paying it could take up to a year to remove them, you would have to cover the mortgage, deal with the courts and then repair any damage. This is not worth the risk for anything but a big return and l would be surprised if anyone could get a good return in the current climate.

25 years ago it was MUCH easier and yes you could take a long term view and make a decent return, maybe this is what you Dh has heard.

Ask your DH to go and see a property tax expert with his figures and let them estimate your profit/loss accurately.

In your situation and as a LL of 30 years l would not do this, however l would cut back immediately and build up 6 months savings.

Seen folks sell up and return 20 years later. They lost out enormously

OP how much profit do you think you’d make per year from renting out your current house once you’ve subtracted tax, converting your mortgage to a buy to let mortgage or whatever it is that needs doing regarding the mortgage, minus the right insurance, gas checks etc etc?
Surely this is the case if the OP actually lives in her house, she doesn’t have to move out to achieve this?

I get that we're in a frivolous situation at the moment without savings and with expensive cars, small amounts of debt etc. just in my head that's pretty normal after doing everything we've done in such rapid succession - baby, house, wedding, another baby within like 3 years. But I see it as something we'll come back from and if we manage to maintain a nice life during this time and still have occasional holidays and stuff that savings taking a backseat short term isn't the end of the world? Yes would agree though I choose happiness over money and perhaps don't think about these things the most sensible way

It’s not the end of the world if you stay fit and healthy or if you have income protection/critical illness cover. The issue comes if one of you is diagnosed with a serious health condition and can’t work, or you have an unexpectedly high bill etc. With kids involved it’s irresponsible not to have some form of backup plan if you can possibly afford to.