Nixs

Does anyone have any experience with becoming a landlord of your own property and renting it out to tennants? Just looking for a bit of general advice or good websites to visit for info.

imlach

Yep - did this last year. Didn't use a letting agency - did it all ourselves.
First set of tenants began to not pay rent.....not much you can do *legally* to get them out until lease is up, so was a pain. Got all the rent out of them in the end though...

Our 2nd tenants are much nicer, and haven't had any trouble with them so far.....touch wood.

It is easy if things go well, but be prepared for effort if you have problem tenants.

You need to do :
1) Gas & electricity safety checks every year or 2
2) Landlords buildings & contents cover (commercial insurance)
3) Tell your mortgage lender (if you have a mortgage)
4) Get a tenancy agreement drawn up by your solicitor
5) If furnishing, furniture must be fire safe
6) Install smoke detectors etc

Loads more....but can't think of rest right now.

Brendan Hughes

Don't buy furniture you like, buy cheap strong stuff.

Unfurnished saves you that money and saves you conforming to fire regs.

Check house insurance is valid, mortgage is valid. Taxman?

Agencies care less about who is in there than IF they're in there. Tenants mean fees, even if they're lowlife.

Check if there are relative strengths of tenancy - when I rented a room as a student my landlord gave me 3 pints of milk and a packet of cereal every week, specifically so he could say it was bed and breakfast and I could not get legal rights (he'd had probs before).

Sorry, that's not info but questions, but hope it helps!

Father Jack Hackett

Get a deposit of about 1 months rent that you give back when they leave if everything's in order and they've paid rent up to date.

Speak to an accountant. You'll pay tax on the rent but you can make some deductions of costs against your tax.

ScoobyWon't

If you don't want to be collecting the rent every week/month, maybe if you are not resising in the country of your property, then a property managemer will be needed. They will take care of all maintenance and rent collection and should provide all contracts and legal documents. A property management service will normally add a fee on top of what your asking for rent. Some will ask for a 'finders fee' but if competition is fierce then most will not.

If the rent you are taking is more than your mortgage repayments then it's worth asking the bank about increasing your repayments to match the rent you receive to see about paying it off quicker.

It's also worth checking what tax liability you have for capital gains etc.

Should you ever consider selling then it is easier to have viewings when you don't have any tenants in side it as the estate agent will need access at random times.

Hope that helps, you've got my email address if you want to know more.

imlach

FYI, letting agents generally charge 12.5-17.5% of rental income per month for full management.

Note that FULL management does not guarantee rental payment. If the tenant does not pay the agent, the agent does not pay you. The agent will certainly do something to rectify the situation, but you still won't get YOUR money until the letting agent has received the money from the tenant.

You can get "rental income insurance", but I've never looked into how much it costs. That is the only way to GUARANTEE monthly rental income to pay your mortgage.

[Edited by imlach - 9/25/2003 12:00:48 AM]

Chris_

Nixs

Its important that you get the correct advise on this subject as you could lead yourself into a very difficult situation by doing it wrong. The Landlord and Tenancy laws here are very strict. If you want to mail me I will help you.

btw. I own an Estate Ageny and specialise in Residential Letting and Property Management.

ps Your profile says you are in Canada. If this is the case, I suggest you speak to people near where you live as the laws governing this subject will be entirely different.

Chris

Scoobydick

Great idea becoming a Landlord, but you don't want Tennants in your pub - it is a horrible lager!

TimGR

Probably been said above, but here's a checklist:

- Furnishings - if furnished must comply with fire regs (just about
all furniture these days complies - look for the tag on the piece
of furniture).
- appliances and gas fittings must be checked and approved yearly
- insurance. renting is not covered by normal household insurance
- you will need specialist cover or obtain waiver of certain clauses from your current underwriter
- mortgage, if you have one, you will need to obtain permission from the bank building society
- Tax. you will be liable to tax on the income (not capital gains tax) you may make deductions for legal and professional costs, repairs, insurance and other items.
- agreement. You will need one with the tenant, there are various pro-forma agreements that agencies and solicitors use.

My advice is to get a letting agent - they cost money (12-17% as stated above) but their fees are % tax deductible against the rent and they will do the leg work like advertising, contracts, background checks on tenants, statutory checks.

Cheers

Scooby96

Definitely do it unfurnished

Nixs

Thanks for all the tips

I do Live in Canada at the mo so I'm guessing the laws will be slightly different over here. I think I'd have to go down the letting agent route because If I decide to do this, it's unlikely I'll stay living in Canada.

There are some useful bits of info on here though. Thanks

Nixs