Renting out a Property - costs?
Discussion
Quick background. I moved with work to New York 3 months ago and put my house on the market 2 months before the move, priced aggressively hoping for a quick sale. Eventually, 3 weeks ago I accepted a very low offer on the house and had hoped it would go through. Unfortunately I heard yesterday that the buyer has withdrawn his offer. Given current conditions I doubt I will get another buyer and its not worth dropping the price any further as it is already low (160K for a 4 yr old 3 Bed Semi Detached).
I'm currently on a payment holiday with the mortgage company, but all this means is that the interest is getting added to the redemption figure each and every month. This is great for Cash Flow, but not so great in the long run.
So, my choices are limited and I think I may need to rent the property out - hopefully the decline in sales means an increase in the rental market. I doubt that the rent will cover the mortgage so I will have to bite the bullet on the shortfall, but I am pretty much clueless on what it takes to rent a property and the average or standard costs for having a Managed service that looks after it all for me.
Any guidance on standard costs/terms would be appreciated as would any insight into alternatives to my situation.
Rich
I'm currently on a payment holiday with the mortgage company, but all this means is that the interest is getting added to the redemption figure each and every month. This is great for Cash Flow, but not so great in the long run.
So, my choices are limited and I think I may need to rent the property out - hopefully the decline in sales means an increase in the rental market. I doubt that the rent will cover the mortgage so I will have to bite the bullet on the shortfall, but I am pretty much clueless on what it takes to rent a property and the average or standard costs for having a Managed service that looks after it all for me.
Any guidance on standard costs/terms would be appreciated as would any insight into alternatives to my situation.
Rich
The management company I use takes 10% plus VAT of the gross monthly rent, on top of this I only pay buildings insurance (no contents, the flats are only barely furnished with main essentials, bed, sofa, white goods etc) and any routine maintenance costs.
You have to declare profits to the tax man at the end of each tax year, however mortgage interest is tax-deductable, so it's worthwhile moving your mortgage over to interest-only to maximise monthly cashflow and minimise outgoings.
ETA - RICS today reported than rental market growing faster than ever before, hopefully it works to your benefit.
Also, if you need anyone to drive your cars daily whilst you're away I'm happy to assist
You have to declare profits to the tax man at the end of each tax year, however mortgage interest is tax-deductable, so it's worthwhile moving your mortgage over to interest-only to maximise monthly cashflow and minimise outgoings.
ETA - RICS today reported than rental market growing faster than ever before, hopefully it works to your benefit.
Also, if you need anyone to drive your cars daily whilst you're away I'm happy to assist
Edited by anonymous-user on Tuesday 19th August 17:21
If you have moved semi-permanently to the US, you may lose your UK tax residency status, which might mean you are no longer liable to UK tax on the rental profits (if there are any). Conversely, you might find yourself liable to US tax on this income.
It is normally required that UK rental agents deduct tax at source on rents they collect for foreign tax residents. The foreign resident then claims a tax offset against the tax they might have to pay in their own country.
It is normally required that UK rental agents deduct tax at source on rents they collect for foreign tax residents. The foreign resident then claims a tax offset against the tax they might have to pay in their own country.
For you just to break even with your financial/mortgage commitments, is not a bad option to aim for, and then hopefully one that you achieve.
So you either need to use family, friends, trades person/people or letting agents to manage the property for you, with the latter, as another poster mentioned wanting 10% of the rental income as their management charges, plus additional charges for any necessary costs for repairs etc.
Using family, a friend or tradesperson to look after/over the property will obviously reduce the costs, but that person must themselves be switched on and reliable.
Another option for you to consider is either to use/ask your local Council’s Housing Department to take on/manage the property for you, although the advantages and disadvantages need to be considered before taking up the same.
Lastly, a final option might be for you to contact the personal department of a very large employer in the area where the property is situated, particularly if there is a large government agency, such as DVLA, MOD etc. etc.
So you either need to use family, friends, trades person/people or letting agents to manage the property for you, with the latter, as another poster mentioned wanting 10% of the rental income as their management charges, plus additional charges for any necessary costs for repairs etc.
Using family, a friend or tradesperson to look after/over the property will obviously reduce the costs, but that person must themselves be switched on and reliable.
Another option for you to consider is either to use/ask your local Council’s Housing Department to take on/manage the property for you, although the advantages and disadvantages need to be considered before taking up the same.
Lastly, a final option might be for you to contact the personal department of a very large employer in the area where the property is situated, particularly if there is a large government agency, such as DVLA, MOD etc. etc.
skibum said:
Quick background. I moved with work to New York 3 months ago and put my house on the market 2 months before the move, priced aggressively hoping for a quick sale. Eventually, 3 weeks ago I accepted a very low offer on the house and had hoped it would go through. Unfortunately I heard yesterday that the buyer has withdrawn his offer. Given current conditions I doubt I will get another buyer and its not worth dropping the price any further as it is already low (160K for a 4 yr old 3 Bed Semi Detached).
I'm currently on a payment holiday with the mortgage company, but all this means is that the interest is getting added to the redemption figure each and every month. This is great for Cash Flow, but not so great in the long run.
So, my choices are limited and I think I may need to rent the property out - hopefully the decline in sales means an increase in the rental market. I doubt that the rent will cover the mortgage so I will have to bite the bullet on the shortfall, but I am pretty much clueless on what it takes to rent a property and the average or standard costs for having a Managed service that looks after it all for me.
Any guidance on standard costs/terms would be appreciated as would any insight into alternatives to my situation.
Rich
There are a lot of people doing this (two of my friends are). I'm not sure of the logic unless people think the current downturn is a blipI'm currently on a payment holiday with the mortgage company, but all this means is that the interest is getting added to the redemption figure each and every month. This is great for Cash Flow, but not so great in the long run.
So, my choices are limited and I think I may need to rent the property out - hopefully the decline in sales means an increase in the rental market. I doubt that the rent will cover the mortgage so I will have to bite the bullet on the shortfall, but I am pretty much clueless on what it takes to rent a property and the average or standard costs for having a Managed service that looks after it all for me.
Any guidance on standard costs/terms would be appreciated as would any insight into alternatives to my situation.
Rich
http://news.bbc.co.uk/1/hi/business/7567963.stm
http://www.timesonline.co.uk/tol/money/property_an...
yellowbentines said:
The management company I use takes 10% plus VAT of the gross monthly rent, on top of this I only pay buildings insurance (no contents, the flats are only barely furnished with main essentials, bed, sofa, white goods etc) and any routine maintenance costs.
You have to declare profits to the tax man at the end of each tax year, however mortgage interest is tax-deductable, so it's worthwhile moving your mortgage over to interest-only to maximise monthly cashflow and minimise outgoings.
ETA - RICS today reported than rental market growing faster than ever before, hopefully it works to your benefit.
Also, if you need anyone to drive your cars daily whilst you're away I'm happy to assist
"ETA - RICS today reported than rental market growing faster than ever before, hopefully it works to your benefit."You have to declare profits to the tax man at the end of each tax year, however mortgage interest is tax-deductable, so it's worthwhile moving your mortgage over to interest-only to maximise monthly cashflow and minimise outgoings.
ETA - RICS today reported than rental market growing faster than ever before, hopefully it works to your benefit.
Also, if you need anyone to drive your cars daily whilst you're away I'm happy to assist
Edited by yellowbentines on Tuesday 19th August 17:21
Not the whole story...
"But the rate at which tenants are seeking property is being outstripped by the number of rental properties coming on to the market, leading some to speculate that rents, which have been rising, may flatten out"
audidoody said:
It's true - more people than ever are renting but more people than ever like you are putting their places on the rental market ... in some areas of London it is a renter's market
It certainly is. Our house has been for sale since April and we have dropped the price by £40K in that time. Eventually we decided to rent it out so it went on the rental websites at 10:30 on a Monday and was rented to the first people who saw it by 4pm the same day.We now have 1 week to pack and move out.
garycat said:
audidoody said:
It's true - more people than ever are renting but more people than ever like you are putting their places on the rental market ... in some areas of London it is a renter's market
It certainly is. Our house has been for sale since April and we have dropped the price by £40K in that time. Eventually we decided to rent it out so it went on the rental websites at 10:30 on a Monday and was rented to the first people who saw it by 4pm the same day.We now have 1 week to pack and move out.
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