Looking to rent out

I bought my house, a 2 up 2 down semi in 2010 for £77k. It last sold in 2005 for £92k. Its in a buoyant rental area, indeed the house next door has had two tennants since I've been here, renting at £450 a month.
My house has several positives compared to next door: Driveway, new kitchen, better bathroom, new central heating, fully refurbished in the last 2 years. So I could achieve at least £475 - that seems to be the ceiling around here.

I bought the house when I was single, and now I have a partner and a slightly higher personal income, as well as her income, and I am looking at the future and thinking about somewhere bigger. But I want to retain this house and rent it out. Clearly usually one would sell and use the cash as a deposit on a new house / transfer the mortgage etc, but if I could get the deposit for a new house and mortgage, how would I go about with the old mortgage? Would it still be in my name? Would I have to have a different kind of mortgage?

If I were to rent out, I would use an agent. The mortgage payments are currently £350 a month (having just dopped rate onto variable) - though these might increase slightly so I just break even on this house until the mortgage is paid off, then use the rental as an income - I am thinking long term here.

Has anyone done this in the past? What would I be liable for in the house? Would I be only responsible for mortgage payments, building insurance and maintenance? Is there a website that tells me all about it?

If I use an agent are there agents that will guarantee me an income even during vacant periods? This is the risk factor I guess - what if I cant get a tennant and end up paying two mortgages?

Listen carefully Steve.
First thing is DONT use a agent . No matter what they say or promise- they obviously are in it to make money .
They take too long to get the ball rolling ie: checks on tenants etc .
If they put in a tenant on a 'Shorthold Tenancy'- and the tenant leaves after 6 months- then- you pay the agent again - and so on.

Makes sense to keep the property- ie: if you and new partner splits (it happens) -- you still have a place of your own.
Regarding your mortgage on the property- you Must inform the Lender-- and they will then increase the borrowing rate - usually by 1%.

Looking at your current financial position regarding your morgage--- It really would be a long term thing for you to benefit .
Consider the tax liabilities on your future rental income . You would pay at least 20% of the income (minus relief on mortgage interest payments, repair costs and a few other small ancillaries).

Finally- if the place is empty for a few months- that is the price you pay for being a Landlord/speculator/investor.
If it's not empty- you may break even ..

Trust me- I have been a landlord for almost 15 years now .

Unfortunately- due to a thread of mine being removed lately- regarding the pitfalls of being a Landlord- - you have missed a bit of information .

It's your call Steve--

I'm on the other side to you. My advice: use an agent to advertise it, don't use an agent to manage it.

Agents' fees are ridiculous. The last flat I rented cost me nearly £300 just for 'paperwork'. This one cost me the sum total of £0.

If I had a problem in the last place, I had to get in touch with the agent who got in touch with the landlord. That's not as easy as it sounds. Here I just send a text/e-mail/make a phone call and it gets sorted.

There are template contracts freely available online. You'll be responsible for mortgage payments, maintenance and insurances etc, but if you went with an agent you'd be paying them a nice premium for something you could easily do yourself.

EngStudent said:

I'm on the other side to you. My advice: use an agent to advertise it, don't use an agent to manage it.

Agents' fees are ridiculous. The last flat I rented cost me nearly £300 just for 'paperwork'. This one cost me the sum total of £0.

If I had a problem in the last place, I had to get in touch with the agent who got in touch with the landlord. That's not as easy as it sounds. Here I just send a text/e-mail/make a phone call and it gets sorted.

There are template contracts freely available online. You'll be responsible for mortgage payments, maintenance and insurances etc, but if you went with an agent you'd be paying them a nice premium for something you could easily do yourself.

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Makes sense bud.
Agents take a tenants pants down when charging them for anything and everything (ref checks, etc etc ). So agents get 'double wonga'-- .
Landlords who do the checks themselves- should charge prospective tenants- for doing so. NON refundable if the checks dont come out satisfactory-or lies have been told (just like agents do).

I have a full time job, as does my partner, I was looking at an agent to remove the jobs involved - finding tennants etc, basically so I could sit back and watch the money roll in. And as a safety net so if anything does go wrong they could deal with it.

Steve said:

I have a full time job, as does my partner, I was looking at an agent to remove the jobs involved - finding tennants etc, basically so I could sit back and watch the money roll in. And as a safety net so if anything does go wrong they could deal with it.

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Well Stevie boy- my advice to you would be to go for it- and learn a lesson .

As long as the rent pays the mortgage and expenses-that's ok.
You just have to be patient and wait -- 'tread water'.
Gone are the days when we bought a property and sat back/ paid the loan/mortgage and covered our costs while the property appreciated in value every year after year.
You have to 'suck it and see .
Over last 15 years- the rent off my properties (all paid for now) have kept the game even.
However- up until 3 years ago- they have increased in value by maybe 600%.
Those days have gone forever .
May be different 'down south'-- but in Yorkshire -- not quite the same .

peterperfection said:

Makes sense bud.
Agents take a tenants pants down when charging them for anything and everything (ref checks, etc etc ). So agents get 'double wonga'-- .
Landlords who do the checks themselves- should charge prospective tenants- for doing so. NON refundable if the checks dont come out satisfactory-or lies have been told (just like agents do).

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Exactly this. In my last place I had a credit check (I think), which was ~£60. 'Admin' fees were ~£200, and they charged me an extra £60 just to add my fiancee as a 'permitted tenant'.

Obviously I have no experience on this, but depending on the tenants you might not have to even bother doing the checks. My current landlord didn't; I'm a student, my fiancee works for the NHS, I guess you could argue that unless you have a bad feeling about tenants you don't need to. My neighbour was unemployed, housing benefit paid for the flat...and they did a runner, owing £600.

I think you're over-estimating the amount of time you'd need to dedicate to running the property. If everything's up to scratch (plumbing, electrics, gutters, roof etc) then barring any major issues you wouldn't actually need to do that much.

EngStudent said:

peterperfection said:

Makes sense bud.
Agents take a tenants pants down when charging them for anything and everything (ref checks, etc etc ). So agents get 'double wonga'-- .
Landlords who do the checks themselves- should charge prospective tenants- for doing so. NON refundable if the checks dont come out satisfactory-or lies have been told (just like agents do).

Click to expand...

Exactly this. In my last place I had a credit check (I think), which was ~£60. 'Admin' fees were ~£200, and they charged me an extra £60 just to add my fiancee as a 'permitted tenant'.

Obviously I have no experience on this, but depending on the tenants you might not have to even bother doing the checks. My current landlord didn't; I'm a student, my fiancee works for the NHS, I guess you could argue that unless you have a bad feeling about tenants you don't need to. My neighbour was unemployed, housing benefit paid for the flat...and they did a runner, owing £600.

I think you're over-estimating the amount of time you'd need to dedicate to running the property. If everything's up to scratch (plumbing, electrics, gutters, roof etc) then barring any major issues you wouldn't actually need to do that much.

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hey for a student-- you seem to be on the ball.
How old are you ?.

As a landlord- who does NOT use agents at all.- I usually go with my 'gut feeling' and common sense.
Any doubt at all- ask for a guarantor.
Whatever you do- NO DSS. Keep your place respectable and nice.
Landlords who accept DSS are usually 'Rackman' type. Quite happy to see people live in shyte.. Certainly not the way I like to live my life.

Just have to say- If anyone askes for advice- IF you want truthful, experienced advice- listen carefully.
Otherwise- if you dont hear the things you WANT TO HEAR-- go elsewhere .

Peter how many properties do you own? Clearly if I was doing this as full time thing and had say 100 houses I would do it myself and make a career and livelihood out of it. But I just want the security of having money invested in bricks and mortar, getting me a better return than if it were in the bank.

Maybe eventually I will have a "portfolio" of properties but for now I just want this property to earn its own keep, possibly saving it as a retirement fund.

Steve said:

Peter how many properties do you own? Clearly if I was doing this as full time thing and had say 100 houses I would do it myself and make a career and livelihood out of it. But I just want the security of having money invested in bricks and mortar, getting me a better return than if it were in the bank.

Maybe eventually I will have a "portfolio" of properties but for now I just want this property to earn its own keep, possibly saving it as a retirement fund.

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1 property 50 properties or 100 properties dont matter.
Same rules apply..
One bit of advice I would give you though- is- if you are a WORRIER' forget it. Not worth the hassle

Always make sure you're happy with their work before you pay.

We use agents to find and vet the tenants, they take the deposit and put it in the deposit fund as it's now illeagle to put it into your own account,when the 6 months are up, if the tenants are ok, put them on a rolling contract, i do it verbally, so far no problems.

The more names on the mortgage = less capital gains tax to pay when you sellthe property, although you dont pay capital gains on your own home, my wife assures me this is the case even if you rent it out.

You'd be a fool to not use an agent to find a tenant. Anyone who is anyone looks on Rightmove, if you ain't advertising on there you're gonna end up with a much poorer selection.

you can buy Doncaster for £400, what a total dump... i am biased however. SHUT junction 32 off the M1.

EddieM said:

you can buy Doncaster for £400, what a total dump... i am biased however. SHUT junction 32 off the M1.

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what basis do you have for this outburst? Doncaster is served by at least 6 motorway junctions anyway