Advice on Letting a House
Discussion
I wasn't sure which forum this should be in so Mods please move as neccessary.
I recently moved house leaving my previous house empty, initially I had planned to sell it and received an offer privately which i accepted, however the other party's situation changed and they withdrew the offer. After speaking to an estate agent it became apparent if I put it on the market I wouldn't get as much as I'd hoped for and a lot less than the recent offer, therefore the plan was to rent it out. The internal decor is somewhat aged and I had decided i would gut it and give it the magnolia treatment for a neutral decor. As I was planning the next stage I was approached by a friend of the family who is about to start work on a new build literally across the road from this place and would therefore like to rent it out to live close to the building site. He's offered a good rental of £1200 a month for a period of 12 months. He's not bothered about decor, only that him and his wife have somewhere to eat, sleep and relax, plus a garage for storage of his stuff.
So getting to the point, how do I go about this, I currently have a share in another property that is rented through an agency but have no idea how to do it alone?
What is the usual method of taking rent, one month in advance up front as deposit and the first month payable on a set date, so effectively I have two months rent as the move in?
I understand my requirements are to get the gas boiler serviced/tested and electrics tested, anything else I should be doing?
Any advice no matter how small appreciated as I've been thrown in at the deep end with no idea what I'm doing!
I recently moved house leaving my previous house empty, initially I had planned to sell it and received an offer privately which i accepted, however the other party's situation changed and they withdrew the offer. After speaking to an estate agent it became apparent if I put it on the market I wouldn't get as much as I'd hoped for and a lot less than the recent offer, therefore the plan was to rent it out. The internal decor is somewhat aged and I had decided i would gut it and give it the magnolia treatment for a neutral decor. As I was planning the next stage I was approached by a friend of the family who is about to start work on a new build literally across the road from this place and would therefore like to rent it out to live close to the building site. He's offered a good rental of £1200 a month for a period of 12 months. He's not bothered about decor, only that him and his wife have somewhere to eat, sleep and relax, plus a garage for storage of his stuff.
So getting to the point, how do I go about this, I currently have a share in another property that is rented through an agency but have no idea how to do it alone?
What is the usual method of taking rent, one month in advance up front as deposit and the first month payable on a set date, so effectively I have two months rent as the move in?
I understand my requirements are to get the gas boiler serviced/tested and electrics tested, anything else I should be doing?
Any advice no matter how small appreciated as I've been thrown in at the deep end with no idea what I'm doing!
Initial deposit is typically 6 weeks rent then first months rent in advance.
Take a full inventory upon move in, record every single issue and damage and remember to safeguard the deposit in one of the protected schemes. First issue may be moot if dilapidated.
You can usually draw up a standard rental agreement fairly easily/cheaply with a solicitor or bastardise one from one of the specialist landlord forums (advise the former).
Otherwise ask in 'Homes and DIY' or even the 'finance' forums here for better answers
Take a full inventory upon move in, record every single issue and damage and remember to safeguard the deposit in one of the protected schemes. First issue may be moot if dilapidated.
You can usually draw up a standard rental agreement fairly easily/cheaply with a solicitor or bastardise one from one of the specialist landlord forums (advise the former).
Otherwise ask in 'Homes and DIY' or even the 'finance' forums here for better answers
I assume yr going to take a bond- typically 1 months rent is the norm.
don't care if he is yr best mate, or your brother, do it.
tenants can reek havoc on your home. what if he loses his job, builds debt up, floods the place ?
anyway, you must secure the bond in the "landlords tenancy deposit scheme"
you issue a 12 month shorthold assured tenancy.
yes you need a gas safety cert doing. normally £50.
ideally you need landlords insurance. i use alan boswell group. £130 for a 3 bed hse typically. depending on levels of cover.
don't care if he is yr best mate, or your brother, do it.
tenants can reek havoc on your home. what if he loses his job, builds debt up, floods the place ?
anyway, you must secure the bond in the "landlords tenancy deposit scheme"
you issue a 12 month shorthold assured tenancy.
yes you need a gas safety cert doing. normally £50.
ideally you need landlords insurance. i use alan boswell group. £130 for a 3 bed hse typically. depending on levels of cover.
The form seems to be a month and a half's rent as a deposit, plus the first month's rent in advance. If you're not so fussed about the deposit, you could reduce it to an amount with which you're comfortable (asking for three grand up front is a hell of a lot for a normal guy. Not a problem for me, I'm on PH, so obviously minted).
The important thing to note is that you must (as far as I know) lodge the deposit with an approved deposit holding scheme. You can't just keep it. It's not quite the same legal principle, but think back to Fare-Pak a couple of years ago to see the pitfalls of not taking proper care of other people's money. Even if it's not a strict legal requirement, it's probably something worth investigating.
From a practical point of view, do an inventory with your tenant and photograph absolutely everything. I know he's your mate and what not, but when things go wrong (and they can) the last thing you need is to have no evidence that the massive holes in the carpet or the missing bath really are your tenant's fault.
Agree a date on which the rent should be paid, and how. Agree what to do if it's late or if he can't pay or if he's going to be a little light because of cash-flow. Agree who is responsible for what (again, as far as I know, landlords are responsible for less than you might think). Agree the terms of the lease and the duration as well as the options for extension and the notice periods required on either side. There is law about this, so you won't be able to enforce a contract which goes against this, but if nothing goes wrong and you're happy to accept, say, a fortnight's notice for him to vacate, then let him know that. Save the legals for when things have gone tits up (with the caveat of having given both sides some protection)
Simon.
The important thing to note is that you must (as far as I know) lodge the deposit with an approved deposit holding scheme. You can't just keep it. It's not quite the same legal principle, but think back to Fare-Pak a couple of years ago to see the pitfalls of not taking proper care of other people's money. Even if it's not a strict legal requirement, it's probably something worth investigating.
From a practical point of view, do an inventory with your tenant and photograph absolutely everything. I know he's your mate and what not, but when things go wrong (and they can) the last thing you need is to have no evidence that the massive holes in the carpet or the missing bath really are your tenant's fault.
Agree a date on which the rent should be paid, and how. Agree what to do if it's late or if he can't pay or if he's going to be a little light because of cash-flow. Agree who is responsible for what (again, as far as I know, landlords are responsible for less than you might think). Agree the terms of the lease and the duration as well as the options for extension and the notice periods required on either side. There is law about this, so you won't be able to enforce a contract which goes against this, but if nothing goes wrong and you're happy to accept, say, a fortnight's notice for him to vacate, then let him know that. Save the legals for when things have gone tits up (with the caveat of having given both sides some protection)
Simon.
oh and technically if you have a residential mortgage it needs to become a buy to let.
but lots of people chance it, if its short term.
are you using equity from it to purchase somewhere else ? without a doubt, you'll have to remortgage and it'll be a BTL.
and you need to declare tax.
and capital gains when you do get round to selling it.
but lots of people chance it, if its short term.
are you using equity from it to purchase somewhere else ? without a doubt, you'll have to remortgage and it'll be a BTL.
and you need to declare tax.
and capital gains when you do get round to selling it.
With my BTL the vendor stayed in the proporty until they found another house and I organised it all myself.
Simple tenency agreement is easily taken from the web.
I took 1 months rent as deposit and registered it in one of the Goverment approved schemes which is an easy thing to do.
Got references from their employees and bank.
Agreed they would pay rent in advance on an agreed date by DD.
Also check with your lender if you can rent it out.
Some may be ok without changing to a BTL mortgage.
You also need landlord insurance which I paid £120 for a 3 bed semi renting out at £560pcm.
Simple tenency agreement is easily taken from the web.
I took 1 months rent as deposit and registered it in one of the Goverment approved schemes which is an easy thing to do.
Got references from their employees and bank.
Agreed they would pay rent in advance on an agreed date by DD.
Also check with your lender if you can rent it out.
Some may be ok without changing to a BTL mortgage.
You also need landlord insurance which I paid £120 for a 3 bed semi renting out at £560pcm.
Might be worth joining the NLA - lots of useful stuff on the website including tenancy agreements etc
http://www.landlords.org.uk/membership
http://www.landlords.org.uk/membership
austinsmirk said:
oh and technically if you have a residential mortgage it needs to become a buy to let.
Not true - my mortgage company gave me consent to let on my residential mortgage, didn't increase the fees either. However you almost certainly (due to small print in mortgage docs) have to inform them and they may insist on certain requirements (eg use a letting agency / serve certain notices).W99KSY said:
Might be worth joining the NLA - lots of useful stuff on the website including tenancy agreements etc
http://www.landlords.org.uk/membership
I'd second that; I certainly got cheaper insurance through it and there's other stuff like standard AST tenancy agreements and a reasonable forum.http://www.landlords.org.uk/membership
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