Due to a change in circumstances I am considering renting out my flat, which is in a purpose built block in a good rental area. I have to pay a quarterly service charge, council tax, etc and it would be rented furnished (unless there's a good reason to rent it unfurnished).
Regarding things like service charge & council tax. Is the tennant responsible for paying them or should I build them in to the rental price and pay them myself? I'm concerned about what would happen if the tennants didn't pay.
Obviously I would like reliable, hassle-free tennants and for everything to work well in the flat so I would have as little involvement as possible. I wouldn't have much time to work on repairs, chase late rent, etc.
Would you recommend getting a lawyer to write an official rental contract or just do it on a handshake & deposit and should I hand it over to an agency or do it myself?
I rent out two properties so I have some experience that may help.
Both of my properties are unfurnished lettings, As far as I know if it is furnished all the materials in chairs, sofas, beds, etc have to be fire retardent and you have to be able to prove it. If it is let furnished you can claim 10% of the yearly rental as a tax allowance for wear & tear.
Both of my tenants pay their own council tax, I do not have any service charges. If they do not pay it is their problem not yours.
Possibly look, as you say, at having them managed. An agent (up here Leeds) will typically take 10% of the rent plus VAT, For that they would fully manage the property and pay you every month the rent less their 'cut'. They would also arrange any repairs etc. with plumbers,builders etc. but should speak to you first so you aware of any costs involved. As far as the tenant is concerned you do not exist if you like, you could be sat next to them in the pub and they wouldn't know, effectively the agent is the landlord. I do not use an agent as I like to be in control of the spending and materials used, also why give an agent 10% + VAT for something I can easily do myself.
I would recommend having it drawn up proffesionally, although that was easy (and free) for me, my wife is a solicitor!
Another thing to take into account is you need to have a Landlords Gas Safety Check done on all gas appliances in the property. This is a legal requirement and is compulsary.
A very large % is still mortgaged and there is also other debt secured against the property. I'm sure if I sold there wouln't be enough to pay off everything. I'm also pretty sure the rent would be enough to cover monthly outgoings e.g mortgage, repayments to loan company. But if a month or two rent was missed I would struggle to make it up myself.
I would be a student so I'm not sure how that would affect things.
The tenant has to pay the council tax. Whether you include all the other charges in the rent is up to you, but it would be foolish not have them pay the gas and electricity as they would leave it on 24/7 if in the rental charge. You need a CORGI landlords certificate once a year. You need a mains connected smoke alarm.
Look at 6 months shorthold tenancy contracts, which is the standard official contract most use. Take references and guarantors and "check them out". Take a deposit. Don't have students, especially foreign students. Take British people rather than foreigners as foreigners can just flit off abroad owing 1000s, while British people are traceable.
The above is all from knowing people who have had serious problems with tenants. A good pay on time tenant is a rare thing.
Doctor Drivel wrote: Don't have students, especially foreign students. Take British people rather than foreigners as foreigners can just flit off abroad owing 1000s, while British people are traceable.
Thats what a £200 deposit is for and as far as I'm concerned if no occupant is paying the rent after one month they're out on their arse.
Not quite true. I'm a first-time landlord (my mam died and I inherited her house) and from reading the "Landlords Information Pack" that I got from our local council, and also advice from the letting agency we're using, there is
*no legal requirement* to fit *any* smoke alarms whatsoever.
We *have* fitted mains alarms because we just thought it was commonsense and the right thing to do, but we didn't *legally* need to - unless it's an HMO (house in multiple occupancy - which ours isn't).
You are responsible for the service charge. Council Tax is the responsibility of the tenant: make sure you write to the Council telling them the tenant's name and when they move in so that they don't come after you if it's not paid.
Agencies tend to take a lot of money for not doing a lot (their so-called vetting is not always very reliable). Having said that, the last time we let a flat we advertised in the local paper and Loot and got no response so ended up with an agent - possibly it's the case that would-be tenants just prefer the easy life so go to an agent who offers them a list with full details.
Thats tosh, a "200 deposit wouldn't, presumably, even cover one months rent. I was adviced to make my bonds £100 more than the monthly rent, so you were covered for at least some inconvenience etc if the tenant 'did a flit'. It is not as easy as you suggest to get a sitting tenant out of the house. So far, touch wood, I have not had any problems in the 5 years I have been renting out but you cannot just sling out a non paying tenant. You need to go through the correct procedures or you can find yourself in hot water!
To the OP go have a look at
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and click on the 'Forum' link at the top left and maybe post a question in there. The people that frequent that site are mainly landlords etc. and are very knowledgeable and helpful with it.
Check out 3rd party review of the agent if you do this. Ask for references that you can verify both from landlords and tenants.
I'm a tenant, and the agent is supposedly managing the property.
Bloody useless they are too. They manage the annual gas check and collecting the money. Heating failures I've had to deal with myself in winter, with a baby and bill the landlord when he returned ("nothing to do with us"). Most other faults I pass directly to the landlord.
If this is really the case, then you need to take a really good look at your finances - they're in a mess.
Sponix's advice is spot on - how would you cope if interest rates increased by 1.5-2%? They will. What about if your rental income dropped?
Your house will not be worth what it is now in two years time. If you don't believe that, go here:
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the second dropdown to select UK House Prices Adjusted for Inflation, and study the graph. Stare at it for a while, and try to convince yourself that we're not at the top of a peak.
"The3rd Earl Of Derby" wrote in message news:FjRTf.39520$ snipped-for-privacy@text.news.blueyonder.co.uk...
One month deposit.
Are they? The law says otherwise. You have no right whatsoever to enter the flat. The flat is lawfully theirs until they vacate or the contract ends. If you do enter the police will prosecute you. The police can't even enter. They don't need to allow the CORGI engineer in either. If their is an explosion then they are prosecuted not the landlord. You can only take legal action when rent is 2 months behind. So, a tenant can be a month behind for ever until you give notice to quit, which is 2 months notice. They can pay a deposit and one months rent in advance and do nothing. You can take legal action for possession when rent is 2 months behind, then can ignore it. You can turn up to their door and they can call the police citing harassment, and the police will remove or prosecute you. The legal action then goes to court and they sit in your flat paying nothing. The court awards you possession and the rent and legal fees due. This all takes time. They ignore it all. Then you arrange for the "court" bailiffs to break into the flat and give you possession. More time. They are given notice of the bailiffs date of arrival. They can vacate the flat on the previous day and just walk straight out. They can call the police if they think their is going to be a breach of the peace by the landlord. The police allows them out in safety and will prosecute the landlord if their is any harassment or assault or abuse. In short the police aid and abet a fraudster. All this may be 9 months and they paid two months rent in total. While they are ripping you off, you cannot cut off any services whatsoever. You must also attend to any problems of maintenance. If you do not they can pay to have the maintenance done and charge you.
After the bailiffs come you have your flat back and have lost a wedge in rent, legal and bailiff fees. They legally owe you all this. Then you have to trace them to collect. More money. Always take their employers name and address, if two of them then both, then the legal people can get the money directly off them via the employer (I think I am right on this point). Always take a guarantor and check them out and that they exist.
Many landlords start off honest people and after a while resort to heavies to counter the fraudsters and bad tenants. I know friend you had all this done to him. He now does all the checks thoroughly and very assertive when rent is not paid on time. Always send a demand letter when not paid on time, as this stacks in the landlords favour in court. If their are serious problems he get a firm in, who employ heavies, who will deal with any problems.
On speaking a policeman friend, the copper said if it happened to him, he would get burglars he knows to strip the place out when they are at work (can be done in 15 mins), then change the locks and securely board up the doors and windows with padlocks. When they come back, they will call the police, the landlord says I had wind that they had flitted and move in and secured the property, I now have possession. If they say otherwise then the lanmdlord can say they trying it on and ignore the lot. I'm not sure if in law the policeman is right on the last point.
Usually the tenant pays everything except for the service charge and the buildings insurance. Apart from anything else the council tax may vary according to the teneant's circumstances.
It's easy to get a proper form to fill in for a 'shorthold tenancy' which is what you want for this sort of letting.
Our experience over the years has been that direct letting with an agreement direct between us and the tenants has *always* worked much, much better than letting through agents. The agents we have been involved with (and others I have heard about before and since) just introduce an extra layer of hassle and do very little for you at all. Tenants seem to feel the same way about agents!
The one exception was a 'one man band' who was actually as much of an odd job man as an agent, he not only dealt with day to day enquiries from the tenant but would also fix/replace washing machines and such when they went wrong. Sadly he retired many years ago.
I believe Which do a good book on letting and have the contracts in. It is also full of advice for both sides. Never read it so don't know if it is all that good.
In message , at 12:20:45 on Tue, 21 Mar 2006, snipped-for-privacy@isbd.co.uk remarked:
Yep, all they'll do (from the tenants perspective) is delay things for three weeks while trying to locate the landlord to get his permission to spend any money, then send a tame odd-job man round to bodge the repair.
What do your mortgage providers and others who have charges on your property say about the idea?
They may not be too delighted at the prospect - as others have pointed out, rental values and sale values of flats could decrease, particularly in view of the huge number of unsold conversions that will soon be looking for occupiers in many areas. Lenders (quite reasonably) want to be sure they'd get their money back, even if they were selling in difficult circumstances (repossession, difficult tenant, trashed internally), so at very least they'd probably want to move you to one of their "buy to let" mortgages, at a higher interest rate.
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