Landlord Advice

[maddog]

Hi everyone,

 

Im thinking about renting my current flat rather than selling it as i have enough money for a deposit etc my next property.

 

Any advise on becoming a landlord would be useful, im thinking of going with an agency who want to take 10% of my monthly rental to manage the whole thing, included money collection and point of contact so i dont have a tennant hassaling me every minute of the day.

 

Any one have any experience of this? Also some advise on landlords insurance etc if my tennant decides not to pay would also be useful.

 

Thanks in advance :-)

[Block 18]

worth a read

 

http://www.direct.gov.uk/en/HomeAndCommunity/Privaterenting/RentingOutYourProperty/index.htm

[notnowcato]

I've rented a property out for 4 years now. I went with the managed option for the first year as I thought with property rentals being new to me I could do with the agencys assistance, frankly it was a waste of money. When the tenant had an issue they would contact the agency, who would then contact me if the issue or work required would result in the repair exceeding an agreed amount. With any costly work to be undertaken you should organise the quotes yourself as I would expect most agencies (not all) would have a list of preferred suppliers... if you know what I mean. During the first year the agency gave me a quote of £1350 for some work, I found a professional who did it for £650. I probably only save £40 a month by not having the property managed but that all goes into the kitty.

 

I've not gone with landlords insurance, I weighed it up and as with most insurance it wasn't worth it. I wouldn't put anyone off taking out insurance though. Probably the most secure payment you will find is when the rent is paid by housing benefit.

 

Have you looked at the mortgage deals for buy to let? Not a good market at present.

[maddog]

Spoken with my current mortgage lender and they are happy for me to rent the property out without a change to my mortgage, just have to pay a small admin fee.

 

Im like you i guess, in terms of i have never done this before so the management option is attractive but like you said i guessed they will just be a middle man, my flat is only 2 years old so i dont see any major work will come up, unless something really bad goes pop. Its in a nearly new condition and doesnt need any work so im thinking maybe i wont need the managed option, just let them sort out the cash which is a lot cheaper.

 

My major concern is what i do if im without a tennant for a long period of time, as finding the cash for 2 mortgages could be a struggle. I have a small fund which will cover about 4 months payments but im not sure if that realistic. Most of the agents i have spoken to have said thats fine, but im worried they are just pushing me into it, so wanted a real world view.

[notnowcato]

Understand your concern re vacant property. Rental market does seem strong at the moment and by the sounds of it your property is desirable, assuming you market it at a reasonable price you should be ok.

[toofarnorth]

Spoken with my current mortgage lender and they are happy for me to rent the property out without a change to my mortgage, just have to pay a small admin fee.

 

Im like you i guess, in terms of i have never done this before so the management option is attractive but like you said i guessed they will just be a middle man, my flat is only 2 years old so i dont see any major work will come up, unless something really bad goes pop. Its in a nearly new condition and doesnt need any work so im thinking maybe i wont need the managed option, just let them sort out the cash which is a lot cheaper.

 

My major concern is what i do if im without a tennant for a long period of time, as finding the cash for 2 mortgages could be a struggle. I have a small fund which will cover about 4 months payments but im not sure if that realistic. Most of the agents i have spoken to have said thats fine, but im worried they are just pushing me into it, so wanted a real world view.

 

Unless you ask for too much you shouldn't have too many problems finding tennants especially if your flat is quite tidy. I've been scanning the market recently as was thinking of moving but I there isn't much out there so have just signed on to remain where I am. As it happens I also rent out the property I own where I used to live and have used an agent since I left as i'm 400 miles away, but as notnowcato says if your local it's really not worth it. As it happens my agent has been great and they do monthly inspections etc and really work for their 10% which does not seem to be the case with the big nationwide agents you get down here. I have landlords insurance with Endsleigh and thats really just to cover buildings and contents as I let the flat furnished.

[Weston Super Saint]

I rent my house out, and DO use an agent to manage things for me.

 

However, the house is about 150 miles away from where I live, so the 10% fees per month save me a lot of hassle when things do go wrong with the house, as they sort everything out for me.

 

If you are gonna live close to the property I'd say do it yourself.

[maddog]

Cheers people, really helpful feedback. Im definatly thinking about taking the plunge, even for a year to see how it goes.

 

Can i ask whats the deal with the Tax man then, im assuming after having a veruy brief scan (need to do some more reasearch) i will need to declare the full amount each month as a mortgage payment is not seen as an expense? What does everyone do about this?

[SaintlyAnd]

I let out my flat for a year and half through an agency as I thought that would be the easy option (I was out of the country), but it was such a pain. They just forwarded any problems to me and got me to deal with it in the same way as I would have had to do directly (as a poster above says finding your own quote for work can save you a lot of money). And it felt so expensive with the agency - cost was 10% of the rent but there were so many additional costs for their admin at the start and the end. I ended up really regretting the fact that I was losing so much money to them and they were doing nothing.

 

Also through an agency they find a tenant, which obviously has some positives, but the tenant in my place was a nightmare to deal with - wanting to reduce the rent, paying late, wanting things done that I'd pay for (painting a room a colour he wanted). Guess its a bit of luck if you get a good tenant or not, but if you're meeting them before agreeing anything then you can get some idea of how they'll be.

 

Regarding landlord insurance, I think my mortgage provider insisted I had it for them to agree to me letting it. If you have a mortgage, it might be worth checking with them.

 

Good luck with it!!

[Wurzel]

Have done it both ways in the past. It's worth paying an agent for finding a tenant and collecting the rent, so far none they have found have left me with arrears, whereas one or two found without agents have. Plus they have always got a higher rent than I'd have asked for myself so effectively they pay for themselves.Not worth paying them to sort out problems if you're local though - as mentioned above half the time they still contact you about it anyway, plus they take a commission on the jobs so the rates charged are usually higher than you could get yourself.

[franny]

I think a good small agency will know the area better and give you a better service as opposed to one of the big boys. I have several properties with Chrurchills in Eastleigh and would recommend them, they charge me 8% and manage the properties well. There is a fee to find a tenant (they do all the credit checks, references etc and usually then sign up for min 6 months). If they get the right tenants and you look after the property people stay for a long time I find so the £250 charge for new tenants is not an issue. They tell me the market is buoyant and I have never had a property empty for more than a couple of weeks with them, they inspect regularly and deal with tenant issues. I had one tenant who paid late one month and they were on it quick as a flash, also when someone wanted out after just a couple of months they dealt with him well ensuring that if another tenant did not come in to replace him he had to honour the six month contract.

I don't have insurance cover for missed rent but the usual cover for damage, accidents etc..

[Gemmel]

The bigeest hassle with being a landlord is collecting the money and going with an agency to remove that hassle costs you 10%. If the maths add up then it's a safe option, but if you rent to DSS, then that is more guranteed than any agency. There will be no shortgae in people wanting to rent, so you will get you choice of tenants and if the flat is half decent, it is usually better than they would get from a council allocated one and my expereince was that they tended to really look after it.

May be we just got lucky, but i would recommend allowing DSS or housing benefit tenants anytime. The money is there every month without fail.

[maddog]

Thanks for all the feedback, seems like you all dont really have a problem with getting tennants and thats my main concern. If the flat pays for its self im not interested about making a monthly income its the long term "pension pot" im interested in. Think i might take the plunge for a year on a cash collection fee from an agent and deal with the issues myself as im local.

 

Thanks for all the feedback though

[GenevaSaint]

May be we just got lucky, but i would recommend allowing DSS or housing benefit tenants anytime. The money is there every month without fail.

 

I thought the money is paid to the tenant now rather than directly to the landlord? It's only there without fail if you get a good tenant who doesn't think mr Landlord could go without as my johnny wants his xmas presents surely?

[Dimond Geezer]

As a word of caution, I've known 2 people who have let their properties, both were managed by agencies. In my sisters case, the place was left in a mess when the tennant moved out, and the withheld deposit didn't cover the cost of repairs by about £1000. My mate couldn't get rid of his tennant, even after they stopped paying rent, after 2 trips to court, they were evicted leaving my mate with a bill of about £5k for legal fees & repair bills, on top of the lost rent for about 7 months.

 

I don't wish to sound like all is doom & gloom, as I'm sure there are many other examples of letting property being successful & profitable, I just thought you should be aware of the possible pit-falls. Good luck.

[Gemmel]

I thought the money is paid to the tenant now rather than directly to the landlord? It's only there without fail if you get a good tenant who doesn't think mr Landlord could go without as my johnny wants his xmas presents surely?

 

It's completetly the opposite. The money doesnt go anywhere near the tenant and gets paid directly from the goverment to the landlord. (Which is why it is so safe)

[maddog]

As a word of caution, I've known 2 people who have let their properties, both were managed by agencies. In my sisters case, the place was left in a mess when the tennant moved out, and the withheld deposit didn't cover the cost of repairs by about £1000. My mate couldn't get rid of his tennant, even after they stopped paying rent, after 2 trips to court, they were evicted leaving my mate with a bill of about £5k for legal fees & repair bills, on top of the lost rent for about 7 months.

 

I don't wish to sound like all is doom & gloom, as I'm sure there are many other examples of letting property being successful & profitable, I just thought you should be aware of the possible pit-falls. Good luck.

 

No worries its good to hear all experiences, i will be taking out legal insurance so my legal fees will be covered if i need to go to court. I found a joint insurance that covers for legal expenses for eviciting tennants etc and they will pay 100% of the rent for up to a year if your tennant wont pay.

 

I think although a lot of people have avoided insurances, they are worth it if this nigthmare situation happens. Really appreciate all the feedback though as its so hard to get a real world picture when an agent is trying to hard sell their services etc

[Wurzel]

It's completetly the opposite. The money doesnt go anywhere near the tenant and gets paid directly from the goverment to the landlord. (Which is why it is so safe)

 

Only if specifically requested, normally it's paid to the tenant nowadays (by the local council, not the government) . Plus even if it's paid direct to the landlord if there are any mistakes and/or fraudulent payments made it will be recovered from the landlord for quite a long period after the payment was made even though he will probably be totally unaware that anything is/was wrong with the payment

[SO16_Saint]

Cheers people, really helpful feedback. Im definatly thinking about taking the plunge, even for a year to see how it goes.

 

Can i ask whats the deal with the Tax man then, im assuming after having a veruy brief scan (need to do some more reasearch) i will need to declare the full amount each month as a mortgage payment is not seen as an expense? What does everyone do about this?

 

you can claim the interest element back - so may be worth looking at reverting to Interest Only - which will help with your worry about affordability too.

[GenevaSaint]

Only if specifically requested, normally it's paid to the tenant nowadays (by the local council, not the government) . Plus even if it's paid direct to the landlord if there are any mistakes and/or fraudulent payments made it will be recovered from the landlord for quite a long period after the payment was made even though he will probably be totally unaware that anything is/was wrong with the payment

 

Ah ok, so you can do either but I think the preferred route is to give it to the tenant. Personally I'd always want the direct transfer route; if you did get the wrong family in you can see it now, beer, fags, food, birthday, xmas present or pay Gemmel! That said I'm sure you interview all of your tenants.

[Wade Garrett]

Ask the council if they would like it. They'll repair any damage and return it in the same state as you gave it to them.

 

Much better than dealing with agents who take their cut for not a lot in return.

[Andy_Porter]

The maintenance work agencies usually do is un professional, rushed and usually left unfinished, they usually charge a premium for it as well.

 

Its always far better to shop around and get any sort of problem fixed yourself.

[Barney Trubble]

How does the land lie with regards to renting a property out furnished /partly furnished or empty?

 

I may need to move away for a year or two but don't really want to sell everything I have built up over the years and would prefer to rent furnished/unfurnished. I suppose I could sell TV's/DVD players etc but have a fitted kitchen, cookers, washing machine etc and it would be a nightmare to have to mess about with taking them out.

[Weston Super Saint]

Take them out and put them in storage.

 

Renting a property furnished is the same as sticking all your furniture into the street with a big sign on it saying 'take me, or destroy me, you choose'.

[bridge too far]

How does the land lie with regards to renting a property out furnished /partly furnished or empty?

 

I may need to move away for a year or two but don't really want to sell everything I have built up over the years and would prefer to rent furnished/unfurnished. I suppose I could sell TV's/DVD players etc but have a fitted kitchen, cookers, washing machine etc and it would be a nightmare to have to mess about with taking them out.

 

These days, don't you have to provide a washing machine and cooker, even in an unfurnished property?

[Clapham Saint]

How does the land lie with regards to renting a property out furnished /partly furnished or empty?

 

I may need to move away for a year or two but don't really want to sell everything I have built up over the years and would prefer to rent furnished/unfurnished. I suppose I could sell TV's/DVD players etc but have a fitted kitchen, cookers, washing machine etc and it would be a nightmare to have to mess about with taking them out.

 

Take them out and put them in storage.

 

Renting a property furnished is the same as sticking all your furniture into the street with a big sign on it saying 'take me, or destroy me, you choose'.

 

If you rent it furnished then you can claim a wear and tear allowance of 10% of the gross rent. Reducing the resulting tax payable on the rent.

[angelman]

I rent a house out in London. Agent takes 7% and it isn't managed by them. I can get on the telephone just as well as they can.

 

One thing that I did take out was British Gas's landlord service, which covers water, drains, gas, electricity etc. Lump sum - no call out charges, no other costs and they do the gas safety certificates.

[bolo]

Right Can anyone give me some advice on this. The place i am renting out has just had a PIR and the report has come back with 2 items. 1. No warning labels on cosumer unit, and 2 no ring continuity on kitchen sockets. HOw much would it cost to fix? Approx? The property is in London.... THanks!

[Barry the Badger]

Right Can anyone give me some advice on this. The place i am renting out has just had a PIR and the report has come back with 2 items. 1. No warning labels on cosumer unit, and 2 no ring continuity on kitchen sockets. HOw much would it cost to fix? Approx? The property is in London.... THanks!

 

http://lmgtfy.com/?q=electrician+london+yell

 

HTH :-)

[bolo]

Yes thanks for that badger, I wasn't asking for how to find one, more a bit of info regarding the problem and the expected cost.... To me point 1 seems ludicrous and it just seems to be a way to make me part with more cash....