Renting out a property.. Is it worth it?
Discussion
Not too sure if this should be in the Homes, Gardens and DIY but made more sense here.
So the situation - I have a 2 bed terraced house in North Wales that I currently live in. Fully refurbished, wired, plumbed, plastered, all new woodwork etc. start of this year.. I'm in the middle of arrangements to buy another property next July (my parents' house - my home since I was a kid)
So my question is - Is it worth renting it out or just Selling it on?
I've had it valued rental wise at £450pcm (£500 if council/DSS rental)
But all the other costs associated with it are putting me off. little charges here and there. My mortgage is £300 PCM (House worth £95K to sell) so would be looking to cover that and maybe adding to the monthly payment to about £350 - 375 if I could, just to get the term shorter.
What do we reckon? Any different viewpoints would be good.
Dion
So the situation - I have a 2 bed terraced house in North Wales that I currently live in. Fully refurbished, wired, plumbed, plastered, all new woodwork etc. start of this year.. I'm in the middle of arrangements to buy another property next July (my parents' house - my home since I was a kid)
So my question is - Is it worth renting it out or just Selling it on?
I've had it valued rental wise at £450pcm (£500 if council/DSS rental)
But all the other costs associated with it are putting me off. little charges here and there. My mortgage is £300 PCM (House worth £95K to sell) so would be looking to cover that and maybe adding to the monthly payment to about £350 - 375 if I could, just to get the term shorter.
What do we reckon? Any different viewpoints would be good.
Dion
The lettings agents advised me to charge rent at £450 to everyone (private individuals or couples) but if the house is being rented through the Local council (e.g. they are placing social housing or for someone on benefits etc. and are covering the cost)
The advice is to charge a little more because they will pay it and it gives me a little extra in case I do get a 'bad' tenant to make things right.
Dion
The advice is to charge a little more because they will pay it and it gives me a little extra in case I do get a 'bad' tenant to make things right.
Dion
At that end of the market it's 50/50 on whether you'll get a good tenant or nightmare tenant. When my wife (gf at the time) moved into my house, she rented out her 2 bed terraced for £425. 1st tenant seemed fine but then it became apparent she started dealing drugs from the property and stopped paying rent. We evicted her and had to redecorate the entire house, replace some kitchen units, fix broken windows etc etc etc. 2nd tenant, single mother seemed fine, inspected quarterly and all was well but when she moved out, house was left a complete tip, grease dripping down every wall downstairs and up. Bath had obviously been leaking for months without her telling us as the ceiling downstairs was coming down. After that, she sold the house.
When my wife and I moved house I decided to rent mine, again 2 bed semi at £475. Managed to get amazing tenants who are still there 3 years later. I've checked the house over recently and its immaculate, very well looked after and the tenants are lovely people.
So that's my 2 pence worth, similar properties for similar prices, 1 nightmare tenants and 1 lovely tenants. It's a complete gamble tbh. Oh and don't bother paying a letting agent, do it yourself. Wifes property we used an agent, all they'd do is act as a messenger. My property I paid an agent to find a tenant and do background and credit checks, but I manage the property myself. It helps that I get on with the tenants though and I've not had many issues, leaking toilet and a boiler that wouldn't ignite which took all of 10 minutes to ring up a tradesperson to resolve.
When my wife and I moved house I decided to rent mine, again 2 bed semi at £475. Managed to get amazing tenants who are still there 3 years later. I've checked the house over recently and its immaculate, very well looked after and the tenants are lovely people.
So that's my 2 pence worth, similar properties for similar prices, 1 nightmare tenants and 1 lovely tenants. It's a complete gamble tbh. Oh and don't bother paying a letting agent, do it yourself. Wifes property we used an agent, all they'd do is act as a messenger. My property I paid an agent to find a tenant and do background and credit checks, but I manage the property myself. It helps that I get on with the tenants though and I've not had many issues, leaking toilet and a boiler that wouldn't ignite which took all of 10 minutes to ring up a tradesperson to resolve.
dionbee93 said:
The lettings agents advised me to charge rent at £450 to everyone (private individuals or couples) but if the house is being rented through the Local council (e.g. they are placing social housing or for someone on benefits etc. and are covering the cost)
The advice is to charge a little more because they will pay it and it gives me a little extra in case I do get a 'bad' tenant to make things right.
Dion
Will they pay it? I thought they pay a set amount (different in some areas) my DSS tenant has to top up the rent each month out of her own money (well my taxes) if I increase the rent the tenant would have to make up the difference and maybe fall into financial difficulties and leave or fall behind with the payments and put me in financial trouble.The advice is to charge a little more because they will pay it and it gives me a little extra in case I do get a 'bad' tenant to make things right.
Dion
dionbee93 said:
I'm in the middle of arrangements to buy another property next July
You need to consider additional rate stamp duty if you already have one property.https://www.stampdutycalculator.org.uk/
It could also effect the mortgage for the new property.....you will need to get either 'consent to let' from your current lender or remortgage it to a buy to let mortgage.
(Dion, Im local to you in Bangor...used to work at Motorsport tools)
zedx19 said:
At that end of the market it's 50/50 on whether you'll get a good tenant or nightmare tenant. When my wife (gf at the time) moved into my house, she rented out her 2 bed terraced for £425. 1st tenant seemed fine but then it became apparent she started dealing drugs from the property and stopped paying rent. We evicted her and had to redecorate the entire house, replace some kitchen units, fix broken windows etc etc etc. 2nd tenant, single mother seemed fine, inspected quarterly and all was well but when she moved out, house was left a complete tip, grease dripping down every wall downstairs and up. Bath had obviously been leaking for months without her telling us as the ceiling downstairs was coming down. After that, she sold the house.
When my wife and I moved house I decided to rent mine, again 2 bed semi at £475. Managed to get amazing tenants who are still there 3 years later. I've checked the house over recently and its immaculate, very well looked after and the tenants are lovely people.
So that's my 2 pence worth, similar properties for similar prices, 1 nightmare tenants and 1 lovely tenants. It's a complete gamble tbh. Oh and don't bother paying a letting agent, do it yourself. Wifes property we used an agent, all they'd do is act as a messenger. My property I paid an agent to find a tenant and do background and credit checks, but I manage the property myself. It helps that I get on with the tenants though and I've not had many issues, leaking toilet and a boiler that wouldn't ignite which took all of 10 minutes to ring up a tradesperson to resolve.
That's what I'm scared of! I have been reassured that I can choose my tenant and meet them beforehand but as you said - first impressions, all can seem fine!When my wife and I moved house I decided to rent mine, again 2 bed semi at £475. Managed to get amazing tenants who are still there 3 years later. I've checked the house over recently and its immaculate, very well looked after and the tenants are lovely people.
So that's my 2 pence worth, similar properties for similar prices, 1 nightmare tenants and 1 lovely tenants. It's a complete gamble tbh. Oh and don't bother paying a letting agent, do it yourself. Wifes property we used an agent, all they'd do is act as a messenger. My property I paid an agent to find a tenant and do background and credit checks, but I manage the property myself. It helps that I get on with the tenants though and I've not had many issues, leaking toilet and a boiler that wouldn't ignite which took all of 10 minutes to ring up a tradesperson to resolve.
Dion
Mortgage_tom said:
You need to consider additional rate stamp duty if you already have one property.
https://www.stampdutycalculator.org.uk/
It could also effect the mortgage for the new property.....you will need to get either 'consent to let' from your current lender or remortgage it to a buy to let mortgage.
(Dion, Im local to you in Bangor...used to work at Motorsport tools)
Hi Tom -https://www.stampdutycalculator.org.uk/
It could also effect the mortgage for the new property.....you will need to get either 'consent to let' from your current lender or remortgage it to a buy to let mortgage.
(Dion, Im local to you in Bangor...used to work at Motorsport tools)
i am aware and it works out at under 3K so not too bad.
And consent to let has been granted from my mortgage provider already - just don't know if I want the hassle or if I should just sell it and forget about it!
My plan was to just have it ticking over in the background paying for itself and be there for when I retire or need to release the funds..
did you work in MST the same time as I was there? I was taking the photos for the new catalogue.
Dion
dionbee93 said:
That's what I'm scared of! I have been reassured that I can choose my tenant and meet them beforehand but as you said - first impressions, all can seem fine!
Dion
We both met all our tenants, first impressions were fine of the 2 nightmare ones. We also had references and background checks done, all fine. Once someones in though it can be a nightmare to get them out. For the one we evicted the letting agent told us that all they can do is send a letter and give them an eviction date but if they don't leave, you'll have to go through court. This was after she'd paid zero rent for 6 months. That's when we decided to not bother with agents.Dion
Like I say though, just need to land a good tenant and it can be plain sailing. I make a bit of pocket money out my house and all the time, the mortgage is being paid off. Don't forget to declare it all with the HMRC if you do go ahead.
dionbee93 said:
Hi Tom -
i am aware and it works out at under 3K so not too bad.
And consent to let has been granted from my mortgage provider already - just don't know if I want the hassle or if I should just sell it and forget about it!
My plan was to just have it ticking over in the background paying for itself and be there for when I retire or need to release the funds..
did you work in MST the same time as I was there? I was taking the photos for the new catalogue.
Dion
Sounds like you've got it sorted ;-)i am aware and it works out at under 3K so not too bad.
And consent to let has been granted from my mortgage provider already - just don't know if I want the hassle or if I should just sell it and forget about it!
My plan was to just have it ticking over in the background paying for itself and be there for when I retire or need to release the funds..
did you work in MST the same time as I was there? I was taking the photos for the new catalogue.
Dion
I did indeed!
dionbee93 said:
That's what I'm scared of! I have been reassured that I can choose my tenant and meet them beforehand but as you said - first impressions, all can seem fine!
Dion
Meeting them means nothing IMHO. You'll never know what they will be like. Dion
If you can afford to deal with a disaster (non payment of rent for 6 months, they smash the place up and steal the central heating etc etc) then go for it if you fancy it.
If any arising issues would place you under big financial stress (could your own home come under risk if you have 2 mortgages to pay?) then I wouldn't risk it...
An extra £50 a month won't be enough if you get a s
t tenant. Double it and add £1000. 
s.
t tenant. Double it and add £1000. zedx19 said:
That's when we decided to not bother with agents.
I struggle to see the point in agents. I've heard similar stories and the agents were like chocolate fireguards when it came to problem tenants which is when you need expertise. All they did was put the landlord through to a lawyer (of which the agent probably took a cut). s.It's a hard one.. I would like someone to take care of everything so I don't have to bother with it. But then again I don't want them taking 10% or whatever they decide out of the final rent for doing sweet FA and contacting me everytime there is a problem.
That's why I was wanting advice/opinion from others that had done the same.
Thank you all up to now!
That's why I was wanting advice/opinion from others that had done the same.
Thank you all up to now!
I've been renting out a property for around 10 years which I never plan to live in....unless things went horribly pear shaped. Fortunately I have had the same tenants in for most of that period and although I don't charge a lot for it they have been reliable and looked after the place to a reasonable level.
I think agents are mostly a waste of time, I got rid of mine about 7-8 years ago and never noticed anything that could justify them taking the 10% and I now manage it myself, I think if you had a lot of property and worked away it could be worth having an agent though.
Getting back onto your point I think you have to look at what you want to do in the longer term, what are your goals? Is the property likely to go up or down in value...maybe at its ceiling price? I think with a small margin between what you owe and potential costs it's certainly a bit border line in terms of what you might make out of it, yet you will open yourself up to potential costs that come with running a house, new boiler...that'll be £1500 etc.
For me I'm now considering selling, the place doesn't owe me anything but even though I have good tenants I still see it as a bit of a burden at times despite it being relatively low maintenance, everyones situation is different I suppose and what you want to make of it.
I think agents are mostly a waste of time, I got rid of mine about 7-8 years ago and never noticed anything that could justify them taking the 10% and I now manage it myself, I think if you had a lot of property and worked away it could be worth having an agent though.
Getting back onto your point I think you have to look at what you want to do in the longer term, what are your goals? Is the property likely to go up or down in value...maybe at its ceiling price? I think with a small margin between what you owe and potential costs it's certainly a bit border line in terms of what you might make out of it, yet you will open yourself up to potential costs that come with running a house, new boiler...that'll be £1500 etc.
For me I'm now considering selling, the place doesn't owe me anything but even though I have good tenants I still see it as a bit of a burden at times despite it being relatively low maintenance, everyones situation is different I suppose and what you want to make of it.
NLA - landlords.org is a great resource. Sign up for a nominal amount and you can use their advice line as much as you need.
Avoid agents as much as possible. If you must use an agent, make sure it is just for tenant find only and no recurring commission (they will act like you've just raped their mother when you suggest this, but stand firm).
It sounds like the monthly income won't be great after your costs - the real question is what do you think the capital value is going to do over the mid term?
Avoid agents as much as possible. If you must use an agent, make sure it is just for tenant find only and no recurring commission (they will act like you've just raped their mother when you suggest this, but stand firm).
It sounds like the monthly income won't be great after your costs - the real question is what do you think the capital value is going to do over the mid term?
- If you think it'll decrease then sell
- If you think it'll stay the same, then sell
- If you think it'll increase then hold and rent
Very interesting from both of you.
As to what I want from it.. I don't want to 'make money' on it monthly.. But I would like for it to be a stand-alone house i.e. not needing any money from my personal account to keep it running etc. and for the rent to cover the mortgage.
Essentially when I decided to sell the house on, that (same as the poster above) the house will 'owe' me nothing and I can take the money and do as I wish with it.
I bought the house as a long term investment really. Struggled to buy it at 23 but though i would be better off doing that than pissing it down the wall, would give me something to fall back on in the future if needs be and it gives me an incentive to work extra shifts etc.
Dion.
As to what I want from it.. I don't want to 'make money' on it monthly.. But I would like for it to be a stand-alone house i.e. not needing any money from my personal account to keep it running etc. and for the rent to cover the mortgage.
Essentially when I decided to sell the house on, that (same as the poster above) the house will 'owe' me nothing and I can take the money and do as I wish with it.
I bought the house as a long term investment really. Struggled to buy it at 23 but though i would be better off doing that than pissing it down the wall, would give me something to fall back on in the future if needs be and it gives me an incentive to work extra shifts etc.
Dion.
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