A guide if you want to rent your house
More homeowners are renting out their properties, whether to allow them to move without selling or to try and make ends meet, find out what you need to know about letting your home.
Before deciding to rent out your home you will need to make sure the plan works financially.
Firstly, you need to know how much you can rent your home for and how this compares to your other costs and mortgage payments.
Get to know the local market and see what similar properties are asking in rental. Having done this, invite three rental agents round to assess your property and give you an estimate of the rent you could receive. This will give you a broad base to work out the rent you can expect from and carries no obligation to go with that agent.
Once you have an estimated monthly rent, compare this to your mortgage costs and other costs. Take into account any rental commission taken by an agent, your monthly mortgage payments and also the cost of maintaining the property, as you will be responsible for repairs and maintenance etc. Bear in mind that by renting out your home and moving to another you will be maintaining two houses, although your new tenants will pay utility and council tax bills.
A lettings agent will find you a tenant, do all the paperwork and manage the rental for you. They will charge for this, typically up to 15 per cent of monthly rent and may also ask for a tenant finding fee. Check charges carefully. They can be high, especially in London, and make sure there are no hidden extras such as landlord charges for contracts, inventories, cleaning. Compare agents and choose a good one rather than just a cheap one, this will save you a lot off hassle in the long run. Also beware those offering excessively high rental estimates, they may take longer to rent your property and in the meantime you’ll still be paying the mortgage. If you decide not to use an agent, be aware that you will need to be able to sort out any problems, do all the leg and paperwork and get repairs done swiftly. When choosing an agent experience and reputation is vital. It doesn’t have to be a big firm - small independent letting agents with years of experience will often go the extra mile for you. Lettings agents are not regulated but there are trade organisations, such as the Association of Residential Lettings Agents. Often you will be told to always choose one of these organisations’ members, however, some long-standing small agents choose not to be members and should also be considered. If you have any concerns as to why they are not members, ask them to explain why. Many people rent out their property and do not tell their lender. They should not do this. Technically your lender must be told if you want to let out your property and the best way to do this is to request permission to let. Explain why you need to do so, and if you run into difficulties explain that it is because you need to move but cannot currently afford to sell, or have financial constraints that would not let you do so or continue to live in the property. Explain it is a temporary arrangement. The lender should be reasonable on this and not force you onto a buy-to-let deal on a higher rate and allow you to let out the property for at least a year or two. They may ask for a fee for permission. If your lender RENTAL PLAN