Gem_Seb Posted March 19, 2010 Share Posted March 19, 2010 Our house is on the market but its not really gaining much interest, and we cannot drop the price anymore.. so we are thinking about renting it for a year while house prices recover.. Does anyone know how we go about this? Doo we have to change to a buy to let mortgage or just inform our mortgage lenders we are renting it for a year? we will not be buying on, just going back with family to save some money for our next house... Any info will be greatly received!! Quote Link to comment Share on other sites More sharing options...
Charlottechicken Posted March 19, 2010 Share Posted March 19, 2010 (edited) The ARLA site may have some info for you, and definitely check the mortgage out. You need to find out if there would be a CGT implication as when you eventually sell it may not be classed as your main home (moving back in for a while would help I believe ) That's just a few thoughts. Edited March 19, 2010 by Guest Quote Link to comment Share on other sites More sharing options...
DebC Posted March 19, 2010 Share Posted March 19, 2010 Speak with your Mortgage lender. There is normally no problem. Halifax were very helpful when we did exactly this. I can be quite difficult, emotionally, to rent out out a house that has been your home. "Ooops, word censored!"ody will look after it like you did! I would suggest lots of Magnolia paint - it's so easy to touch up between tennants, We left curtains up in ours, but I changed them all to either old curtains or some new cheap ones and I was glad I did as the first tennants were smokers , and I wanted to use some of the curtains in the new house when it was finished. When we did sell the house I just left the curtains there. You might also want to consider a service plan for the central heating - so it can be repaired quickly if it breaks down whilst rented. We used an agent who managed the property and who sorted the necessary safety certificates. It does cost, but we moved about 50 miles away and simply couldn't be popping in to sort out problems. Good luck Quote Link to comment Share on other sites More sharing options...
Charlottechicken Posted March 19, 2010 Share Posted March 19, 2010 DebC, did you have to have different buildings and contents insurance? Quote Link to comment Share on other sites More sharing options...
Patricia W Posted March 19, 2010 Share Posted March 19, 2010 Go on a website called Landlordlaw. I joined it and it has saved me hundreds. And don't necessarily go with a letting agent. We did for the first year and it was disastrous for us and the tenants. We now do it ourselves using Landlordlaw and websites like Gumtree, contacts with local companies etc. Tricia Quote Link to comment Share on other sites More sharing options...
Tiggy Posted March 19, 2010 Share Posted March 19, 2010 I did this for a while, you have to let your mortgage lender know & it was OK for me for a year then i had to change to a buy to let mortgage Quote Link to comment Share on other sites More sharing options...
Olly Posted March 19, 2010 Share Posted March 19, 2010 You must let your lender know, because your current mortgage (if it's not a buy-to-let) was granted to you on the basis that you would be occupying the house. They may charge a different interest rate. Your insurance policies are also almost certainly written on the basis that you will be occupying the house, and you'll probably need to get a separate landlord's policy. You don't need to use a letting agent, but do make sure that you're familiar with the law - deposits for example must be held in a special stakeholder account - and that you've got a written tenancy agreement which will enable you to go to court to evict the tenant in certain circumstances, and which limits the tenancy to a shorthold agreement. You must also get gas appliances checked and have a safety certificate, and the same for the electrical supply. Bear in mind - as indicated above - that you may need to do work to bring it up to letting standard, and with the best will in the world it is probably going to need redecorating/carpeting after you've had tenants in it, before you can sell it. If something goes wrong e.g. the lights stop working, the roof leaks, the drains block - will you be able to deal with it quickly, or will you be able to pay someone else to do it? You need to have a reserve for this sort of thing, and again as mentioned above, a gas service agreement is well worth while because if the central heating packs up, the tenant is going to want it sorting out very quickly? Not trying to put you off, this sort of thing can work out very well, but ask yourself lots of 'what if' questions ... what if the tenant doesn't pay/loses their job/has lots of loud parties, what if there's a bad storm and tiles come off the roof. If you're going to do it, I suggest you look at a slightly longer period because if you take all this into account it takes more than a year to start paying back. Quote Link to comment Share on other sites More sharing options...
DebC Posted March 19, 2010 Share Posted March 19, 2010 DebC, did you have to have different buildings and contents insurance? We had our insurance with the mortgage lender anyway and they changed everything over. Quote Link to comment Share on other sites More sharing options...
Gem_Seb Posted March 20, 2010 Author Share Posted March 20, 2010 Thanks for all the info. We are in the fortunate situation of being able to live somewhere rent free while we rent it out so things going wrong wont be a problem to pay off! we are in negative equity and just dont want to live here anymore, problems with neighbours etc so renting seems like the good option at the mo until the market picks up! rahter than having to take out a loan to cover the shortfall on the mortgage! Quote Link to comment Share on other sites More sharing options...
Tutti Frutti Posted March 20, 2010 Share Posted March 20, 2010 Couple of tips - sounds scary but you'll take it in your stride! Let the Inland Revenue know - whether or not you make a profit. You can offset against the income (rent your paid) expenses including any fees in arranging the mortgage, mortgage interest (not capital repayment), letting/agent fees, maintenance fees to keep the property in the same condition and stop it deteriorating (eg repairing a roof but not replacing a ktichen or bathroom purely for cosmetic reasons - although repairing damage is OK), gardening fees. Lots of advice on the Inland Revenue website. I'd get an Electrical Safety Certificate done. Remember to change over the utilies bills, TV licence, Council Tax, water rates (if you use a letting agent, they'll do all this for you as part of the service). If the house is empty, let the council know as they can zero-rate the council tax on an empty property for up to six months. Get a checking in and exiting inventory done - if someone does it for you, they'll be really detailed, down the last cable clip, pinhole from a picture nail to marks on walls and woodwork. Photos might help, should a tenant dispute the condition of anything when they check out. For insurance, we have special Landlord's insurance through Direct Line for Business but have also used Aviva. We pay for buildings (and fixtures and fittings eg kitchen and bathroom) and a tiny bit for contents (eg carpets, white goods). The tenant arranges their own contents insurance. Sounds like a lot - but it's just the initial arranging then it'll tick over. Good luck, sounds like a wise move in more ways than one! Quote Link to comment Share on other sites More sharing options...
Geoid Posted March 21, 2010 Share Posted March 21, 2010 the Inland Revenue Its called HM Revenue and Customs now (merger of Inland Revenue and HM Customs and Excise - Was a question on university challenge last week) Quote Link to comment Share on other sites More sharing options...
