4 Things to Think about If You’re Thinking of Renting Out Your Home
I’ve been renting out my house in London for seven years now and while the extra money has been welcome, it’s been a pain at times (the renting out bit, not the money). Here’s what I’ve learnt so far and what you should think about if you’re thinking about renting out your home.
1. Consider using a letting agent’s full management service
Because my first tenant came via the council, I received a full management service for the price of their standard letting fee (where they charge you for finding a tenant and sorting out the agreement and stuff but then leave you to collect the rent/sort out any repairs, etc.) As my at-first-perfectly-fine-tenant turned into the tenant-from-hell, this service came in handy (although, it could be argued that I wouldn’t have needed a full management service if she hadn’t been such a rubbish tenant in the first place).
Although – touch wood – my current tenants have been fine, I’ve recently had some costly repairs to make to the bathroom and the roof. Sorting out contractors can be stressful, so it’s been good to let the agency take care of this.
Of course, you might want to skip the middle man and put an ad on Gumtree and hope for the best but the letting agent will vet your tenants for you, collect the deposit and rent and arrange any repairs for you (they don’t pay for the repairs though, unfortunately). And if the worst should happen and you have to evict your tenant, they’ll do all the paperwork for you, including arranging for the bailiffs to visit the property and *ask* the tenant to leave and then change the locks (be warned though, it can take months for all of this to be sorted out – it took me 9 months to get rid of my tenant).
2. Read the agreement carefully
The letting agent will draw up an agreement for both the landlord and the tenant (and the cost of this is usually split between you). Read this carefully as it sets out what is expected from both parties. Also make sure the letting agent doesn’t try and sneak in a clause about allowing the tenant to keep guinea pigs without telling you (as mine did).
3. Get a deposit
I hadn’t realised my first tenant’s deposit was only guaranteed for two years (coincidentally, this page was missing from the agreement the agent sent me. Funny that. See above about reading the agreement carefully and make sure there are no pages missing). Because my tenant had been fine and had lived there for two years with no complaints and because she (or so I thought – I hadn’t realised she’d moved in her boyfriend) was a single parent, I let her stay there with no deposit. BAD MOVE! As soon as I did this, she became the tenant from hell. She complained about doors falling off, radiators falling off the wall, the stair bannisters being broken and I had to pay for all of the repairs, even though they were obviously caused by her as these things don’t happen by themselves. When I eventually got her out of the house and went round to check the damage, my neighbour said she’d been having parties every weekend. The (once cream) carpet was black, there were cigarette butts on the floor, and she’d somehow managed to smash the bathroom ceiling light. She wouldn’t have seen a penny of her deposit had I taken one from her. So much for trying to be nice.
4. Have some back-up savings
As you can see, letting out your home can be costly. There may be expensive repairs to make and the house may be empty for a few months while you’re cleaning up after a previous tenant and finding a new one. So, while you’re spending money on repairs, you haven’t got the rent money coming in and so you’ll need some savings to fall back on.
I’ve probably put you off ever renting out your home but it’s not all bad – I’ve had a good income from it over the last seven years and all houses need repairs done to them now and again.
This post was in collaboration with homelet.co.uk who have an ebook coming out this month (August). Here are a few ebook quick facts:
- HomeLet are launching the second edition of their ebook series that offers advice to local landlords.
- The first edition of the ebook focused on three key UK regions (Greater London, South East and North West).
- Issue one featured key tips from current and past landlords and had contributions from Tessa from the Landlord Law Blog, Jonathan from The Money Shed, and was featured on HomesGoFast.com.
- It reached over half a million organic impressions online and was also endorsed by Henry Pryor, leading UK housing and property expert.
- August’s edition of the ebook is a collaboration of top industry professionals, including useful, insightful and expert information on the effect of Brexit, the importance of good tenant referencing and using HomeLet’s unique rental index data.