[Poppy09]

Hi All,

We currently have a 2 bed flat and I am desperatley wanting a house with a garden! Now if we sold we wouldnt have enough equity to put down a deposit on a house. I was thinking maybe we could rent our flat for say 6mth - 1 year and the money we would be paying on a mortgage we can save then sell and that should give us enough to buy a house. In the meantime we would stay with the mother in law (if she will have us!)

But I know nothing about renting...what are the pros and cons? Do I have to tell my mortgage company etc?? Any advise much appreciated!!

 

[Lily's Mum]

hi there!

I rent out a property in London and have done for many years.

Firstly you do need to inform your mortgage company.

Secondly you also need to inform the Inland Revenue.

Will you be managing the Rental yourself or getting an agent in on your behalf?

 

[Guest]

I have rented a property! personally I would not rent one out for such a short time if I intended selling it at the end of the period! No matter how good you think the tenants are of how high the bond is you could end up having to spend a fair bit of money on putting the property right should the worst happen! Also you need to be looking at the net profit you will make from such an exercise! taking into account that you are also going to have to pay out for alternative living even if with in laws!!!
regards
DT

 

[Poppy09]

I dont really know I was just quoted 10% per month from a local estate agent.

Will we have to pay tax on the rent as it suppose it would be like an income??

 

[Poppy09]

We wouldnt have to pay rent just towards food etc so we would be saving alot. I just cant see another way of us being able to move!

 

[zanussi]

If you have a mortgage on the property you'll get tax relief on the interest you pay so you'd only have to pay tax on the difference.
We've been renting my OHs house out for the last year and the tenants are moving out at the end of the month.
As far as using an agency there's little point in getting them to manage it for you unless you live far too far away to deal with any problems. As well as losing the 10% you'll most likely pay over the odds for any work that needs to be done that the agents arrange for you as they'll charge commission either to you or the workmen.
It's worth using an agency to find tenants, get guarators/ references and do contracts for you if you don't know what you're doing.
Also you have to get an energy performance certificate before advertising the property (around £65-£100), have all gas & electrical appliances tested, and organise a deposit scheme. Seems like a lot of hassle if you're only doing it short term...

 

[Poppy09]

Hmm...it does sound alot of hassle...I think we may be stuck here :-(