Renters - need advice from property owners who have rented out their flats/houses please

[Earlybird]

I'm considering renting out my central London flat for a year, and would like some advice from those who own flats/houses they've rented out, and those who have been/are currently renters.

General advice?
Pros/cons/pitfalls?
Furnished or unfurnished - pros/cons and what if any difference to the price?
How to set rental price?
Agency - good/bad experiences. What to look for, what to avoid?
Agency Fee - How much, and what could I expect them to do?
Agency - anyone got a good one to recommend or know of ones that are best avoided?
How to decide who to rent to? How to evaluate applicants - how to find a good tenant?
Best rent payment methods?
What if I have a delinquent tenant?
Do company lets exist anymore?
Lease terms/tips?
Can I specify no pets or non smoker?
Security deposit info - how much?
What happens if there is damage to flat/fixture/fittings/furniture?
How to ascertain general wear and tear vs true damage?
Anything else I haven't thought of?

As you can see, I'm a complete novice at this and want to educate myself a bit before I decide if it's something I want to pursue. Oh - I'd be out of the country so would not be available as a landlord for any maintenance issues or general problems. Of course, my ideal renters would be a single tenant/professional couple who travel alot and perhaps are in London on a temporary company assignment!
Thanks to all for your input.

We rented out our old flat in London while we moved out to the sticks, just to make sure that it was the right move, and to be honest it was pretty hard work - we had some arsey tenants who kept asking for work like new window locks and so on, which really dented any profit we might have made - in the end, I think it cost us.

Furnished or unfurnished - pros/cons and what if any difference to the price? - I think this depends on what kind of place you are renting out; look at your typical renter and work out whether they are likely to have furniture or not. Also, will you mind if stuff gets damaged?

How to set rental price? Agency should advise. But it's like selling - the one who says it's worth the most may not be able to let it at that price.

Agency - good/bad experiences. What to look for, what to avoid? Interview several and go with gut instinct. Also local knowledge helps.

Agency Fee - How much, and what could I expect them to do? 13-15% if you'll be away and they will be managing it.

Agency - anyone got a good one to recommend or know of ones that are best avoided? Don't touch Foxton's with a 40 foot stick, other than that, it varies v much by the individual office.

How to decide who to rent to? How to evaluate applicants - how to find a good tenant? Should be agency's responsibility - look at the contract.

Best rent payment methods? Ditto

What if I have a delinquent tenant? Same - ask the agency what they would do.

Do company lets exist anymore? Yes, but you have to have a top notch property.

Most of the rest of the questions should be answerable by the agent - the only other tip I would say is agree with the agency a limit above which any expenditure has to be cleared with you.

hi batters - I have had a quick look through the posts from the last month, and don't see it. Do you have any rough idea when it was? What topic it was under? Name of the thread? Thanks.

General advice? Become detached from your property and don't leave anything of any value to you there.
Pros/cons/pitfalls? You may not make any money from it !
Furnished or unfurnished - pros/cons and what if any difference to the price? Furnished - there are Fire Safety Standards for all upholstery, beds etc, more things to suffer wear and tear and debate damage over. Depends on your intended tenant and if long or short term . Makes very little price difference.

How to set rental price? Ask agent and look in local papers

Agency - good/bad experiences. What to look for, what to avoid? Communication was poor with ours and they didn't accurately account the rental income and tax deductions until IR picked it up.

Agency Fee - How much, and what could I expect them to do? 10% to market proeprty, vet prospective tenants, do viewings, draw up agreement, collect rent. 15% for management service, as before plus day to day issues such as if something goes wrong. Extra costs such as Professional Inventory services.

Agency - anyone got a good one to recommend or know of ones that are best avoided? Look for one which is NAEA and ARLA affiliated and which seems to have a high local profile and good reputation.

How to decide who to rent to? How to evaluate applicants - how to find a good tenant? Use agency to run the checks and references. Decide in advance what market you are aiming at - families, company lets, sharers (different rules may apply ) DSS or not. Also any ground rules like no pets, non smokers which can be used early on to eliminate those unsuitable.

Best rent payment methods? Depends if via agent or not (they'll deduct their fees plus VAT, any costs, and pass balance on to your bank a/c

What if I have a delinquent tenant? ?

Do company lets exist anymore? Yes ime but they are more fussy (require professional cleaning and higher spec stuff) and you cannot control who actually lives there.

Lease terms/tips? Usually it is an Assured Tenancy for 6 or 12 months with a fixed notice period or renewal thereafter. Specify which utilities, water and Council tax they are responsible for and which you (like Ground Rent and maintenance charges). An agent has a standard agreement on which yours would be based.

Can I specify no pets or non smoker? Yes

Security deposit info - how much? At least a month's rent with a month rent paid in advance

What happens if there is damage to flat/fixture/fittings/furniture? Insurance policies - you maintain your own buildings and lower contents policies plus take a separate lettings policy which will cover some , but not all , eventualities including non-payment of rent.

How to ascertain general wear and tear vs true damage? Subjective , you need a very thorough inventory and photos. As if you had lived there, so general scuffs and repainting would be wear and tear. Generally you expect it back in the condition you handed it over (plus some wear and tear) but you could pay for a professional clean beforehand so they have to do so at the end.

Anything else I haven't thought of? Tax situation - rental income is taxable in UK but you can offset maintenance , cost of agent, mortgage interest etc against it. Gas Safety Certificate and an electrical inspection(consider a service contract)legally required. If your property is leasehold you may need to write to the Freeholder for permission plus your Mortgage and Insurance companies.

hth

I rented out my home in los angeles while I lived in london for 7 years. I also rented out rooms in my home in london. I ALWAYS had better luck renting directly than with estate agents.

General advice? They are tenants, not owners...they do not have the same vested interest in your home as you do...remember this.
Pros/cons/pitfalls? Great source of income. They can lose their job and stop paying rent.
Furnished or unfurnished - pros/cons and what if any difference to the price? If you are only renting for a year, I would rent furnished. Put anything you care about into storage and get ikea replacements. You can buy these things used on gumtree.
How to set rental price? I like to rent slightly under market rate. It gives me a larger choice of tenants and usually results in tenants who are grateful for what they have rather than demanding.
Agency - good/bad experiences. What to look for, what to avoid? I have never had a good experience with an Agency. I find that my instinct is generally much more effective for picking out reliable tenants than an estate agent's bog standard requirements.
Agency Fee - How much, and what could I expect them to do? They will never do as much as you need them to do.
Agency - anyone got a good one to recommend or know of ones that are best avoided? See above.
How to decide who to rent to? How to evaluate applicants - how to find a good tenant? I find tenants through sites like the gumtree and craigslist. I exchange multiple emails. I judge people on their grammer and spelling and ability to verbalize what they want and need. I don't run credit checks, but I always always always check references. I ask for a business reference, a personal reference and several past landlords. I always speak to these people on the telephone (ie not just by letter). I ask questions about what their goals are and how long they plan to rent for. (You have to wonder about someone with a good income in their 40's who has never owned a home and is looking to rent longterm....) eg. My current tenants (who I rented to sight unseen, having met them on the internet) are the most wonderful couple. On paper they would have been summarily rejected by an estate agent. They are youngish, musicians without regular jobs. They have a pet iguana and a cat and have regular band rehearsals in the house. However, they never ever pay their rent late and are helpful, friendly and take wonderful care of my home.
Best rent payment methods? Direct deposit into your account.
What if I have a delinquent tenant? Depends on the reasons. But generally best to start eviction early and cut your losses as soon as possible.
Do company lets exist anymore? Yes, but usually only accessble through large estate agents like Foxton's. Academics on sabbatical are good tenants.
Lease terms/tips? I almost always do a year's lease and then go to month to month after that with a month to two month's notice required. This really depends on what you are looking for.
Can I specify no pets or non smoker? Absolutely. I would insist on NO SMOKING and NO PETS. Both things are really hard on a home. You can always relent on the latter if you get a larger deposit to cover damage.
Security deposit info - how much? I always ask for 1.5 to 2 months deposit, depending on the tenant. Your lease MUST be very very clear that this is a deposit and cannot be used as last month's rent. Also, make very clear in your lease that you will return this deposit within a fairly short period (1 to 2 weeks) after vacating and your tenants will feel more comfortable about paying it.
What happens if there is damage to flat/fixture/fittings/furniture? Get reasonable estimates for repair and subtract it from the deposit. Make sure you give a clear accounting for this.
How to ascertain general wear and tear vs true damage? DO NOT try to charge your tenants for normal wear and tear...it's not fair and is bad karma. Your home will almost certainly need repainting and other similarl things after having tenants in it.
Anything else I haven't thought of? If you do decide to go ahead with this...feel free to CAT me and I would be happy to give you more specific advice and help on advertising and picking a tenant.
Good luck. I am still very very good friends with more than one person who started out as my tenant.

Hiiya Sofia - hope all is well and sunny.

NO PETS. Except Iguanas you mean ?

pmsl

I rent out my old flat. I've found letsure to be excellent. They'll do credit checks on your tennants (I found out that they're the company that most of the agencies use for this), give you landlords insurance; legal and contents.

I think most of the other points have been covered....

Thanks to all who have answered so far - there's alot of information to digest.

Another few questions:

What do you do about utility bills?

Telephone?

Tenants put them in their own name. That way you don't get left with unpaid bills at the end of it. When the tenants move in, you inform the utility companies.

You have to arrange for the utility meters to be read at start and end of tenancy and notify Water, Council and so on. An managing agent should do this but ours cocked it up and we ended up with bills registered to them (a commercial account)which I had to then get transferred back to our name as residential account. For the phone we had our private number frozen so we could have it back afterwards with no interim usage, but the line connected and left it to the tenants to contact BT for an account if needs be.

btw if the property is unoccupied for any length of time you become liable for all the bills - utilities, Council Tax (at 90% for unoccupied)etc - until you let again.

batters - found the thread. Thanks for pointing me in that direction, because it was very helpful.

What did you do in the end?

haven't checked the other thread, but my two bits of advice would be:-

1. always ask for more than one month's deposit - six weeks minimum. Whatever it may say in the lease tenants inevitably find they need to set that deposit against the last month's rent and if so, you have nothing over to cover repairs.

2. Re agents - as you will be abroad, you need to have somebody on hand in the country to deal with things as they crop up - eg lost keys, urgent repairs, water leaks - and in theory that is what agents should do if you pay them the full management fee.
   I have a very very low opinion of managing agents. I really think they do almost nothing for their charges. But if you cannot be on hand to get a plumber, glazier, locksmith around when needed, or call into the flat from time to time to inspect and make sure there are only the people you rented to living there, then you will need an agent OR to trust your tenants enough to sort these things out yourself while you pay by credit card over the phone or get the plumber to invoice you.