Letting a property to sell.

[.Mark]

I would welcome some advice from the gang here if possible.
I have a spare house. Sitting empty right now and don't honestly know what to do with it. While the wife and I were pondering one day the guy over the road comes over and tells us he'd like to rent it - paid upfront for 6 - 9 months while he does his flat up and then sells it. Eventually he wants to buy it, at a premium, because he wants it quite badly, he loves the close we live in and doesn't want to move away from here. The story is he has met a lady and they need more room and our place is ideal.
He is in his 60's so I'm not too worried about him trashing the place, and to be honest this seems like a good deal for little work (always favourable).

I'm guessing we are going to need to draw up some sort of contract for the rental part but not sure how to go about it or what terms and conditions to put in there. I don't suppose a letting agent would be too keen to help as there is no benefit to them and a solicitor will want an arm and I need both to drive the TVR - any ideas guys? Or for the easy option should I get it legally drawn up and bite the bullet on cost?

TIA.

[beano500]

I might be wrong, but you can probably get some pack from W H Smiths for drawing up your agreement.

If not, you'll find something on the Worldly-Wise-Interwebbie. It's purely your call as to the risks involved of a private agreement, but you're right that the most cost effective is the D-I-Y route.

And

Will it be trashed, do you need to be insured about not getting paid, you'll still need some insurance on the property, it's not like you need someone to market it, is it, you'll want to check the tax situation for renting, furnished v unfurnished, you need a full inventory, who's paying the bills, make sure the council knowns who's paying council tax, et cetera... - just a string of thoughts to consider!

[minimax]

.Mark said:

I'm guessing we are going to need to draw up some sort of contract for the rental part but not sure how to go about it or what terms and conditions to put in there. I don't suppose a letting agent would be too keen to help as there is no benefit to them and a solicitor will want an arm and I need both to drive the TVR - any ideas guys? Or for the easy option should I get it legally drawn up and bite the bullet on cost? TIA.

dead easy. approach reputable local letting agent, explain situation, hand over £XXX and get chummy to sign the subsequent agreement. sorted. it's known as a let only agreement (as opposed to fully managed etc..)




you'll need landlords insurance and to draw up an inventory plus a few other bits and bobs that your letting agent will help you with. have you electrical/gas certificates? you'll need them


of course, you could just do it on the sly, but I personally wouldn't advise it - although each to their own etc!



>> Edited by minimax on Thursday 20th October 19:42

[chrisgr31]

Shorthold Assurred Tenancy agreement is what you need. However must stick to the terms for it to avoid creating the wrong type of tenancy.

When your house is at risk the cost of professional advice to ensure it doesn't go pearshaped is priceless!

[.Mark]

Thanks Guys all good advice.

Beano500 said:

Will it be trashed, do you need to be insured about not getting paid

I've known the guy for 8 years, like I say he's in his 60's so the likelyhood of it getting trashed is slim, also he is offering to pay a long term up front.

minimax said:

have you electrical/gas certificates? you'll need them

Hmmm..No. Didn't realise I'd need them. Thanks.

chrisgr31 said:

Shorthold Assurred Tenancy agreement is what you need

Thanks, will google that.

Any other advice out there, I'm currently between doing it all right and proper and being a bit sly!

[minimax]

chrisgr31 said:

Shorthold Assurred Tenancy agreement is what you need. However must stick to the terms for it to avoid creating the wrong type of tenancy. When your house is at risk the cost of professional advice to ensure it doesn't go pearshaped is priceless!

oh yeah, forgot this!

[Eric Mc]

Don't forget the tax Self Assessment requirements too.

[cirks]

not only do you need gas/electrical certificates but if you are going to let it furnished then all your furniture must meet with current fire retardant regulations.

[Eric Mc]

Is that true for ALL lettings or just Council Approved Lettings?

[Davel]

Don't do it on the sly, even if he does pay all the rent up front.

You need to be protected so that you can get him out on the due date and, if you then sell the property, you have vacant possession at the time- which is more valuable.

And you have rights in case repairs need to be carried out.

[.Mark]

Christ it all seems a bit of a mare!
It'll be going unfurnished so no worries about that. Didn't think about the tax either. I think I'm going to be a busy boy!

I wonder if I can twist his arm just to buy the bloody place without renting it first!

[.Mark]

Been thinking about this.

Does anything change if I change the word 'Letting' to 'Renting'?

[beano500]

.Mark said:

Been thinking about this. Does anything change if I change the word 'Letting' to 'Renting'?

Nope.

(Not unless you take off the "ing" and add the word "boy" afterwards....)

[.Mark]

beano500 said:

.Mark said: Been thinking about this. Does anything change if I change the word 'Letting' to 'Renting'? Nope. (Not unless you take off the "ing" and add the word "boy" afterwards....)

I'll pass on that if I may

[Eric Mc]

Do some homework on what you can offset against your rental income - and what you can do with rental losses, if there are any.

If you sold it now, you would have to take into account Capital Gains Tax issues too.

[hustlebabe]

.Mark said:

I would welcome some advice from the gang here if possible. I have a spare house. Sitting empty right now and don't honestly know what to do with it. While the wife and I were pondering one day the guy over the road comes over and tells us he'd like to rent it - paid upfront for 6 - 9 months while he does his flat up and then sells it. Eventually he wants to buy it, at a premium, because he wants it quite badly, he loves the close we live in and doesn't want to move away from here. The story is he has met a lady and they need more room and our place is ideal. He is in his 60's so I'm not too worried about him trashing the place, and to be honest this seems like a good deal for little work (always favourable). I'm guessing we are going to need to draw up some sort of contract for the rental part but not sure how to go about it or what terms and conditions to put in there. I don't suppose a letting agent would be too keen to help as there is no benefit to them and a solicitor will want an arm and I need both to drive the TVR - any ideas guys? Or for the easy option should I get it legally drawn up and bite the bullet on cost? TIA.

Dead easy
No need for letting agent or solicitor
Have done similar
Tax not much of an issue
pm me if you want more advice

[.Mark]

Eric Mc said:

If you sold it now, you would have to take into account Capital Gains Tax issues too.

Why? It's mine, I paid for it, there is no mortgage. What am I missing?

[beano500]

CGT is only exempt from your "main residence" - hence, if you're not living there (or it is otherwise not your main residence) you'll have to pay tax on any gain.

[hustlebabe]

errrr...not quite...there is a 3 year rule

[nightmare]

three year rule very useful...my siblings and I play 'pass the extra houses' game quite regularly!

.Mark. It erally ISNT a big deal. It might sound it, but it's not.

I dont think you need worry about fire stuff at all but you will need the certificates (again, dead easy as long as you ca get a f**king plumber to actually turn up!)

i think i could send you a basic tenancy agreement if you want one. Do make sure you have one...very nice people can get very un-nice in the oddest of cirumstances. Also...make sure that he does NOT assume you WILL sell him the property at the end of the rental period. I suggest you're very upfront about this. you might change your mind and you must leave yourself that option.

cheers
Night

p.s last time i was in Moscow I could have bought the entire palce with apre change. Now im sitting in a plush hotel with a web connection! mad