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Discussion Starter #1
Hi all,

Just wondering if anyone has any knowledge of renting a house out?

I'm trying to decide whether or not to make a career move which will take me and the family away from my home in Notts. So i'm thinking of renting my house out while i rent elsewhere.

I would really like to leave all the paper work and other bits to someone else (if this is possible) and just be set an agreed amount of rent each month??

I'm am completely new to this so all help will be greatly appreciated.

One good thing is there is a university basically on the doorstep, would this help in anyway?

Thanks in advance.
 

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jimfortune said:
Hi all,

Just wondering if anyone has any knowledge of renting a house out?

I'm trying to decide whether or not to make a career move which will take me and the family away from my home in Notts. So i'm thinking of renting my house out while i rent elsewhere.

I would really like to leave all the paper work and other bits to someone else (if this is possible) and just be set an agreed amount of rent each month??

I'm am completely new to this so all help will be greatly appreciated.

One good thing is there is a university basically on the doorstep, would this help in anyway?

Thanks in advance.
I have lots of knowledge in renting houses out. I run a lettings department for a large Estate Agent. :)

First and foremost, would you ever consider moving back to the house in the future? This should determine the sorts of tenants you can look to have in the property. Basically, if you want the place to be looked after well, families are the best option 9 times out of 10. You could have decent professional sharers, but parties do happen and drinks can be spilled. Unfortunately most tenant deposits aren't large enough to cover the damage a roudy party can cause. But, please don't rule out professional sharers because you'll find the affordability for the rent will be a lot better. Imagine a family in a 4 bed house - 2 adults = £48,000 income (on national average wage). But with sharers, a 4 bed house can have 4 adults = £96,000 income, so a smaller chance of late rent payments.

Another golden rule, and I hate to be picky here, but stay well away from council tenants. Stay the fcuk away. Any tenant that comes to you with a sob story about how they can't afford the deposit so the council will pay it for them, or that they're on housing benefits, politely tell them that your mortgage restricts you from letting to them. Basically, in short, if the government finds out that a person is claiming benefits in a fraudulent manner, then they will 'claw back' that money in a number of ways. Often, they'll take it straight back from the Landlord. Seriously.

As a Landlord you need to have a gas safety certificate issued by a CORGI registered engineer before tenants can move in. An electrical certificate isn't a legal requirement yet, but it's always a good idea. You also need to make sure that any furnishings left in the property comply with the F+F regulations. Just check stickers on pillows, sofas, matresses, bed bases etc to make sure.

Make sure your mortgage company give you permission to let the property out and make sure you have home or buildings insurance in place to cover any disasters like hot water tanks bursting. If you leave the property furnished then make sure your own contents are insured too. Once tenants move in they'll have their own contents insured in most cases.

Have a professional inventory made of the condition of the property before tenants move in. This is the document by which you can prove that a tenant has damaged the property, or left it in a perfect condition. Don't make one yourself as it would never hold up in a dispute as it is deemed a biased opinion as to the condition of the house.

Finally, don't worry. It's a large step at first, but once you get into the swing of it you may decide to invest in more property so you can have some other schmuck paying off your mortgage for you. :cool:

So, now here's what an agent should do for you.

1) Market the property to find tenants.
2) Reference potential tenants to confirm work status and previous rental history
3) Arrange gas safety checks if necessary
4) Perform fire and furnishings checks as necessary
5) Arrange professional and independant inventory creation
6) Set up the tenants rent to be paid by standing order
7) Move the tenants in.

That is what I would call a basic service. Most agents will take their fees on a drip so will calculate their fee as a percentage of the monthly rent. In these cases the agent will collect and account for the rent on your behalf.

A step up from this service would be a full management service where any maintenance problems are sorted out by the agent by one of their contractors. In these cases, the agent will usually have authority to sort out any repairs up to around £200 without consulting you first, but anything major they will get 3 different quotes for and let you choose. The full management service is more appealing to landlords who live away from the property and don't have time to sort these things themselves.

Now, to choose the agent.

Get 3 main agents round to give you their ideas, let them sell their service and then ask them what rent the property would fetch. Do your own research before hand. Check rental properties in your area and come to your own conclusions. If you get some jack-the-lad come round telling you you'll get £200 PCM more than all the other guys, don't listen to him. If any agent quotes you a rental value without backing up his case with 2 or more comparable properties, then don't listen to him.

Don't use a cheap agent. Pay peanuts, get monkeys. You really do get what you pay for in the property industry so choose wisely. Which agent has the most boards in your area? Which service appeals to you the best? Do the agent have a seperate lettings entity? Do they run their lettings from seperate offices (this is better than running from a centralised office)?

Also, make sure the agent is a member of ARLA (Association of Residential Lettings Agents), NALS (National Approved Lettings Scheme) and the TDSRA (Tenant Deposit Scheme for Regulated Agents). If they are members of these bodies then they are heavily regulated in the way they run their businesses. The TDSRA is a very important independant body for settling deposit disputes, should this ever be a problem for you. They will sort the problem for free if the agent is a member.

Finally, do the maths. Work out the realistic rent, deduct the agents fees and make sure what you have left over covers the mortgage comfortably. Remember, you always have to allow for the odd breakage here and there. Oh yeah, and don't leave a washing machine in the property. Let tenants supply their own as they can cause all sorts of damage if they leak and the last thing you want is the tenant calling you demanding you replace all their clothes!

Hope that helps. If you want any more advice just ask or PM me. Good luck mate.

:D
 

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Discussion Starter #3
WOW!!

Thanks ever so much, thats fab!! Just going to print it all out now and start looking for letting agents next week!!

It's all so much to take in:eek:

Thanks again,
 

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I let a house out when I was younger, its was an unbeliavable nightmare, I had bad tennants who wouldnt pay and knew the system inside out.

Basically it was going to cost me a fortune in lawyers and **** me about for 6 months minimum to get them out, they already owed me 3 months rent.

Anyway .. I never went down that road, lets just say I settled it unamicably with a few friends, either way house was in a mess.

Cover your **** on every turn is all I can say and be aware that there are people out there that jump from one rented accomodation to another with no though of paying. Ask for references where ever possible.

Xearo1 has given you some great advise, council tennets are one of those bits of good advice ... stay the f away, same with DHSS.

Dont let me put you off, it can be a great move and a good earner but ... do not trust anyone to do the right thing, in my experiance they will shaft you as soon as look at you.
 

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I rented mine out when I was in working abroad. First tenneants were marvellous. Changed letting agents in aid to get it rented again after the first couple left and the next set didn't look after the place too well. Plus we still get debt collector letters 3 years on.
 

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As Crail Loser said, there are always the odd few who do know the system inside out. They're nothing better than squatters. However, I have set up hundreds of tenancies and never come across any people messing my clients around with rent payments. Of the thousands of tenancies the company I work for created last year, we only had to take 15 cases to court. We won every case and the tenants were ordered to re-imburse the rent and pay the landlords court costs.

Some insurance companies will also offer Rent Guarantee policies for people worried that they may get bad tenants. These policies are expensive so really think about whether you would need one or not. If you decide to go with a larger lettings agent they may have a rent guarantee policy of their own, or they may take tenants to court on the landlord's behalf like we do. This is another advantage of going with a larger agent.

When choosing your agent, also test the agent's knowledge of property law. Ask them simple questions about what sort of tenancies they set up and what the implications are if a tenant doesn't pay rent on time - and what actions they will take to recover the rent for you. The basic tenancy you'll want is an Assured Shorthold Tenancy which falls under the 1988 Housing Act. This means that the tenancy will have a definite end date and an assured length which is agreed by both parties. Ask him what the maximum legth of an AST is (3 years) to see if he knows his stuff. Some agents simply don't know this information so you need to be careful.

You may also want to consider break clauses. A break clause allows landlords and tenants to serve notice (usually two months) in order to break the tenancy agreement legally. An example would be a 24 month tenancy with 12 month break clause. The tenancy can be broken any time after the 12 months is over, giving you a guaranteed 12 month tenancy, and the possibility for the tenant to stay even longer. Make sure you understand break clauses inside out, and the motivations behind people wanting them. If a tenant wants a 36 month tenancy agreement, then demand a break clause at a period you feel comfortable with, because if the tenant turns out to be a nuisance then you can legally end the agreement when the break clause comes into effect. On the other side of the coin, be careful with tenants that want a 12 month tenancy with 6 month break clause because these are more often people looking to buy when the right house comes along. At the end of the day, you don't want to have to remarket your house every 6 months do you? So, when choosing a tenant make sure you suss out their motivation behind wanting to rent before you agree to a tenancy length. Your agent should advise you in this respect because they work for you, not the tenant.

Rental payments are often an issue my clients get confused about. Either take monthly payments from tenants, or up front rent (foreign students will often pay 12 months up front!). The reason for this is simple: under the 1988 Housing Act you can take a tenant to court for late rent payment only after two rental periods, or a minumum two months worth have been missed. So if you're taking monthly rent, you can take the tenant to court after two months rent has been missed. Simple. However, some landlords get into ridiculous situations where the rent is paid in quarterly payments, or two payments per year etc etc. Imagine if the rent was agreed to be paid quarterly and the tenants never paid their first or second period payments - it would be 6 months before you could take them to court.

Finally, don't be afraid to negotiate! Negotiate on the agent's fees, negotiate when offers come in on your property and give the agent a hard time with the negotiations because they'll work doubly hard to keep you happy.

Again, any questions just give me a shout. I'd love to refer you a good agent in Nottingham but it's not an area we cover or have connections in so you'll have to do some homework.

Cheers.
 

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osxwhipswindoze said:
Great advice xaero.

I think I will be changing my agent!
Thanks mate. Unfortunately time and time again I lose business to the cheap agents in my area because people think that they'll save themselves some money by going on cheap fees. In most cases this isn't true, because a larger agent will often let the property quicker and have better contingency plans in place should things go wrong. Imagine a cheap agent quoting a fee £500 cheaper over 12 months, but taking an extra month to rent the property than a large agent would. That month could cost you an £800 mortgage payment, AND you'd be getting a lower level of service.

Remember, a large agent quoting a higher fee will always negotiate their fees when they hear you've had cheaper agents out to see them as well. It'll severely p1ss them off if they lose an instruction to a cheap agent, believe me! Just be hard nosed and get the best deal you can. :)
 

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Discussion Starter #9
xaero you are a superstar thanks ever so much i'll definetely keep you in mind for maybe some questions later down the line if this is ok?

Again thanks.
 

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jimfortune said:
xaero you are a superstar thanks ever so much i'll definetely keep you in mind for maybe some questions later down the line if this is ok?

Again thanks.
No problem mate. PM me any time.
 

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xaero1 said:
No problem mate. PM me any time.
I wish i'd had dealings with you!

I've been involved with the five lettings agencies/Lettings departments of an estate agent in my old town and at least 8 in the town i've moved to... Each one consistantly more difficult to deal with than the last - Rude, Ignorant, No idea what their job entails, not in the slightest bit interested once they have found someone despite quite happily taking 15% p/m...

Good advice and a straight up bloke by the sounds of it! :smokin:
 

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I wish i'd had dealings with you!

I've been involved with the five lettings agencies/Lettings departments of an estate agent in my old town and at least 8 in the town i've moved to... Each one consistantly more difficult to deal with than the last - Rude, Ignorant, No idea what their job entails, not in the slightest bit interested once they have found someone despite quite happily taking 15% p/m...

Good advice and a straight up bloke by the sounds of it! :smokin:
Hey, thanks for the compliments. :)

It sounds like you've had some bad service there mate. I think, as with all things, if you want results then go straight to the management.

If, right from the start, you make yourself known as a demanding client, I think you'll probably get a better level of service from your agent. If you're fair and straight down the line with them, not miserable and rude, then they'll act to get things done quicker. I've had some of the most harsh landlords in the world to deal with and then once I've moved the tenant in they've come in with a bottle of wine and said thank you because they got the result they wanted - a smooth a faultless service.

Whereabouts are the agents you're using at the moment?
 

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Leicestershire, i've given up with it now anyway... moved onto something else that i can control myself :)

The climate I was in didn't help I suppose as there was such a demand for houses at the time they didn't need to do anything except answer the phone to make their money, houses Let straight away as I was only at the starter house end of the market
 
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