Thinking Of Renting Out My House

[mightytharg]

Hi,

I'm working away from home for a year or more, so I'm thinking of renting out my house while I'm away. Seems like it should help the people wanting a house price crash by increasing supply, help the people renting it by providing shelter, help me by having someone looking after the house and providing a small income. I'm being a bit defensive here since some people may disapprove.

I know there's a deposit protection scheme I would have to join and I would need a assured short-term tenancy agreement. Is there anything else I'm legally required to do? It's a small house so I assume it would not count as an HMO.

Also, is it better to rent it out furnished? I think I read that you get more tax breaks if you do.

Tharg

[tim123]

Hi,

I'm working away from home for a year or more, so I'm thinking of renting out my house while I'm away. Seems like it should help the people wanting a house price crash by increasing supply, help the people renting it by providing shelter, help me by having someone looking after the house and providing a small income. I'm being a bit defensive here since some people may disapprove.

I know there's a deposit protection scheme I would have to join and I would need a assured short-term tenancy agreement. Is there anything else I'm legally required to do? It's a small house so I assume it would not count as an HMO.

Also, is it better to rent it out furnished? I think I read that you get more tax breaks if you do.

Tharg

You need a gas check (and certificate)

It is not particulary advantageous (from a Tax PoV) to rent furnished.

tim

[SarahBell]

You need somewhere to put all your tat or declutter.

One of the frequent complaints on MSE is not having access to a garage/shed/loft as it's full of landlords stuff.

[TylerDurden]

You wont get much help on this here as its pretty frowned upon. However sometimes it works out the best option which is why im renting my house out at the moment.

There are small tax breaks to renting furnished, but would only payy if you allready have the furniture. My advice is dont buy anything to go in as it doesnt get looked after, and also people leave furniture when they move. sometimes really nice stuff. When its empty you get a few months free council tax if its unfurnished.

When you ask how easy it is. That depends on a number of things. Mainly:

Condition of house. Tennants will not be happy in a shabby house and will constantly nag you (rightly so). Have it nice and respectable with no hidden damp, dodgy wiring, or anything they will hassle you about. Because it can get annoying when you get a call on a bank holiday saying the electrics off and they want it fixed asap. You have to put the tennants before your free time or they will be unhappy, unhappy tennants are a nightmare. you will learn how to keep them happy.

Good tennants. Tennants who thrash things then ring and want them replacing are common, Choosing the right tennant is hard. Its not about finding someone you like, or who can afford the rent. Its about finding someone who will be happy there. As they will stay. Everytime someone moves out it costs a lot of money in advertising, lost rent, repairs.

Price. In my experience if you look after the tennant finacially they will stay as long as they can. I try and charge the same as the cheapest available local rentals. So My nice 2 bed cottage is the same as a 1bed bedsit in the same town. This is because the tennant you choose will be over the moon to have found a bargain and generally look after it and not want to move out. They genaraly dont bother you as much as they are happy to accept there on to a good thing. Obviously this is only possible if you can finacially afford to do so.

Thats it realy. Its not particularly hard. Yet you must put the tenants first, keep them sweet, be reasonable, dont leave them without a washing machine for 3 weeks, and you will have happy tennants and an easy life.

Also, like any buisness. You win and lose. Get non payers out early. Dont drag it on. Dont threaten courts. Its all very stressfull but can usually be handled quickly and easily if you keep up contact and give the tennants a get out easy option. Theres absolutely no point enforcing you 6 month contract if they cant afford the rent. they just end up owing you more money. Which you never or rarely get back.

Not for me to say but if you rely on the finance from a rented property to get by then its not for you. better selling the house if it will couse major problems.

[Guest_FaFa!_*]

You need somewhere to put all your tat or declutter.

One of the frequent complaints on MSE is not having access to a garage/shed/loft as it's full of landlords stuff.

+1

Make sure you do move out, not leave half your clobber there.

Don't rent it furnished - it will only cause arguments if the tenants accidentally damage it.

Get a full service LA who will deal with everything and if you don't break even think of it as paying for a house sitting service

[campervanman]

If being away from home = being out of UK paying tax in another country then it can be very tax efficient. Tax is payable against rental income in the country the property it is located in, but you can claim the full UK tax allowance against any rent received AND pay no tax abroad on UK rental income. So if rental income is less than 6475 (12950 joint) then no tax payable anywhere.

Edited August 15, 2010 by campervanman

[TylerDurden]

+1

Make sure you do move out, not leave half your clobber there.

Don't rent it furnished - it will only cause arguments if the tenants accidentally damage it.

Get a full service LA who will deal with everything and if you don't break even think of it as paying for a house sitting service

I'd disagree with the LA route. Total waste of money.

They dont care who they move in.

They dont select the right tennant for the property.

They dont cover you if the tennant stops paying.

They over charge for repairs and usually do crappy work.

They have no hidden powers to remove bad tennants and if anything hinder the option of "coming to an agreement" with the tennant, who you have probably never met.

Much less respect for tennant landlord relationship therefore property.

Expensive.. Very.

try and have a good relationship with your tennants. there not your friends, but a healthy respect keeps it all going smooth. Nobody repects a letting agent. Sorry, but its true.

[Guest_FaFa!_*]

I'd disagree with the LA route. Total waste of money.

They dont care who they move in.

They dont select the right tennant for the property.

They dont cover you if the tennant stops paying.

They over charge for repairs and usually do crappy work.

They have no hidden powers to remove bad tennants and if anything hinder the option of "coming to an agreement" with the tennant, who you have probably never met.

Much less respect for tennant landlord relationship therefore property.

Expensive.. Very.

try and have a good relationship with your tennants. there not your friends, but a healthy respect keeps it all going smooth. Nobody repects a letting agent. Sorry, but its true.

From a LL's POV that is bad

However it depends where the OP is moving too. I assumed abroad but re-reading the post that may not be the case

[wombat999]

I'd disagree with the LA route. Total waste of money.

They dont care who they move in.

They dont select the right tennant for the property.

They dont cover you if the tennant stops paying.

They over charge for repairs and usually do crappy work.

They have no hidden powers to remove bad tennants and if anything hinder the option of "coming to an agreement" with the tennant, who you have probably never met.

Much less respect for tennant landlord relationship therefore property.

Expensive.. Very.

try and have a good relationship with your tennants. there not your friends, but a healthy respect keeps it all going smooth. Nobody repects a letting agent. Sorry, but its true.

YES,BUT ITIS HARD NOT TO USE A LETTING AGENT IF YOU ARE GOING TO BE OUT OF THE COUNTRY.

[TylerDurden]

From a LL's POV that is bad

However it depends where the OP is moving too. I assumed abroad but re-reading the post that may not be the case

Ah yes. obviously if abroad or unable to commit the time then letting agencies are the only way.

[porca misèria]

YES,BUT ITIS HARD NOT TO USE A LETTING AGENT IF YOU ARE GOING TO BE OUT OF THE COUNTRY.

Not just hard - it's illegal. You need to supply a UK address the tenant can use for any legal matters they may want to raise. Doesn't have to be a professional agent, but it's a responsibility you may hesitate to foist on a long-suffering friend.

Not a problem if you're in the UK yourself, and prepared to deal with any issues that may arise (and insure yourself against the tenant from hell)!

Furnished or unfurnished - your choice. There are tenants for both, though I don't know what the balance is these days. Whatever you supply, it's your responsibility to replace if it goes wrong (unless the tenant broke it) - this applies most obviously to things like electric appliances. If it's full of furniture that's decent but not precious, then it's a good candidate to let furnished and save yourself the hassle of moving stuff out. Otherwise unfurnished will probably be less hassle.

Oh, and please be honest with prospective tenant, and tell them in advance about your expectation for a return date. The best tenant is one who wants to stay most of the time you're away, but no more.

[mightytharg]

Thanks for all the advice.

The attic will be full of my junk so already it sounds like I'm a bad landlord, but probably storage costs would be almost as much as the rent I could charge. Other than that it sounds fairly straight forward.