Letting a house

I part own a house that I inherited.   We've been letting it through an agent but I was wondering whether to just try and find a tenant myself - what do people think - anyone do it -  more bother than it's worth or not too bad ?    

It's only a cheap terrace - would probably sell it but prices seem to be going up now and I don't have anything else to spend the money on.   

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Comments

  • Nose NowtNose Nowt ✭✭✭

    Not fortunate enough to be in that position myself, but family members are.

    Generally, the opinion is that agents are worth it - unless you think you can get a very long term stable, pay-on-time-every-time set of tenants.  Maybe you find your own, though family/friends' network, but renting to people you know has big potential drawbacks, alongside some big potential benefits. Care needed.

    Agents take the hassle out of it all... stop you having to deal day-to-day with potentially stroppy people. Contracts are tight.  You never need to chase payments... etc etc.

    If tenants change every 12 months then, on average, you'll probably have more "empty", zero-rent months if you find people your own tenants.  And one or two empty months can cost a fortune... costing as much as, or more than the agent's annual fee.   And if you do need to find new tenants, then you'd have to pay to advertise, whereas agents might well fill it just because tenants go directly to agents.

    Bottom line... if it was me, I'd feel resentful about paying out a chunk of my income to agents every month... but it's probably good value.

     

  • popsiderpopsider ✭✭✭

    Some good points

     

  • Big_GBig_G ✭✭✭

    Hi, I have a slightly different view, as I think managing it yourself is doable and don't see what the agents do for their 10% or whatever (I'm not trying to annoy any letting agents who may be lurking!).

    I'd recommend getting the property onto Rightmove.  You can't do this as an individual, and by far the cheapest way is to use a web company such as Visum (I have no connection with Visum at all, apart from I've used them myself).  You'll need to sort out your own ASTs, gas certs etc and I suppose it depends on if you think this is worth the hassle or not, but I don't think the agents do a great deal for the money.

    Relating to your not knowing what to do with the money, have you considered borrowing against the property and buying another one out right?  Depends what you're in it for I know, but it's something to consider I think.

  • popsiderpopsider ✭✭✭

    Big_G,  thanks.   On your last point I only own 25% of the property it's just as I'm the only one in the same city it falls to me to sort everything out.  I may end up buying the others out though (seeing as every time I have to spend time doing stuff to the house I only get quarter of the benefit !)  in which case I might do something like that.   

  • booktrunkbooktrunk ✭✭✭

    popsider: if you end up doing it yourself, you might make a few quid more, but it sounds like it's not really worth the hassle.  You'll split everything and only get 1/4 of the benefits whereas the others would be putting nothing extra in and getting all the benefits of your doing the work yourself....

    Sounds way easier to just let an agent do it all, if they are a good agent that do take all the hassle out of it.

  • RicFRicF ✭✭✭

    Get a decent agent, get them to find decent tenants, get them to manage the property and run spot checks every three months.

    Accept you're feeding off some poor sods efforts and take less profit. 

    At least three people I know let out their property and all they did was ask an estate agent to find someone. That's all. Their properties were all trashed.

     

    🙂

  • popsiderpopsider ✭✭✭

    Yeah love would be optional, I didn't love the previous lot though I did buy a new washing machine for them and all I got was an iron shaped burn mark in the carpet !

     

  • popsiderpopsider ✭✭✭

    Sounds like heaven.   I sometimes say hello to my neighbour if he's outside when I leave the house, that's as far as it goes.   I don't like to strike up a conversation in case he complains about my dogs barking.  

     

  • Big_GBig_G ✭✭✭

    Following up on Ric's point, if you do it yourself trust your instincts.  What I mean is, if you feel uneasy about a prospective tenant for whatever reason when you're showing them around, let them go.

    I don't think that getting an agent to vet the tenants is any guarantee that the tenant will be a good one, so personally I wouldn't use that as a reason to keep with an agent.  booktrunk's point about doing all the work for only 25% of the return is a good one though....

    For info, you can do your own tenant checks (I.E., TenantVerify do it and again I have no connection with this company.  Why do I feel the need to say this on here?  Not sure) and get references etc just as well as the agent can, but at the end of the day a tenant can still trash the place so going via an agent offers little protection from that, unfortunately.  If anything, an agent may paint an overly rosy picture of a tenant so you go with them in order that they get their commission sooner.

  • fat buddhafat buddha ✭✭✭

    we have 2 flats we rent out and manage ourselves. but they are fairly local to us so it's easy to manage them if our presence is needed. and as they are in good order, maintenance issues are easy to look after.

    however, we do use a local estate agent (who offer a letting service) to find tenants (and also vet but we also do our own checks) and they will hold the rental deposit on our behalf (saves having to register to do so)

    if you join the National Landlords Association - http://www.landlords.org.uk/ - you get access to a wealth of information, legal helpline, draft documents etc as part of the service.  that helps a lot in managing matters yourself.

    it's not difficult doing it yourself, you just need to make some time to keep on top of matters

  • Big_GBig_G ✭✭✭
    fat buddha wrote (see)

    however, we do use a local estate agent (who offer a letting service) to find tenants (and also vet but we also do our own checks) and they will hold the rental deposit on our behalf (saves having to register to do so)

     

    Just following up on this point, if you want to register the deposit yourself use the DPS (Deposit Protection Service).   It's free and straight forward.

  • Do something good for  humanity and rent it at lower than market levels. You'll feel good.

  • Big_GBig_G ✭✭✭

    PC, managing them yourself enables what you're getting at, as if you're so inclined you can knock the Letting Agent's 10% (or whatever it is) off the rent.  Also, a tenant generally has to pay a fee to agents whereas they don't if they go privately.  

    From a landlord's point of view it may be better having their properties full as opposed to getting top whack on the rent.  Getting top whack is fine, but it potentially leads to people moving out regularly and having the place empty for a month or two whilst a new tenant is found.

  • fat buddhafat buddha ✭✭✭
    Big_G wrote (see)
    fat buddha wrote (see)

    however, we do use a local estate agent (who offer a letting service) to find tenants (and also vet but we also do our own checks) and they will hold the rental deposit on our behalf (saves having to register to do so)

     

    Just following up on this point, if you want to register the deposit yourself use the DPS (Deposit Protection Service).   It's free and straight forward.

    yes I know but the agent offered it as part of their service so it seemed easier than a DIY option.   by the way - I should have mentioned that the agent charges 2 weeks rent for finding a tenant which is less than many others and saves me the hassle of advertising..

  • fat buddhafat buddha ✭✭✭
    Big_G wrote (see)

    From a landlord's point of view it may be better having their properties full as opposed to getting top whack on the rent.  Getting top whack is fine, but it potentially leads to people moving out regularly and having the place empty for a month or two whilst a new tenant is found.

    we've not charged top £ and as a result have one tenant who's been in one flat for 5+ years (she's a lady in her late 70's who has family locally to help and is likely to be in the flat until she dies.  that's not meant to be callous but is a fact).  in the other flat the tenant has just moved out after 3 years as they have now bought a place outside the town.   we have had in the past a share of not so reliable tenants, one of whom we had to turf out due to non-payment of rent.

  • popsiderpopsider ✭✭✭
    Peter Collins wrote (see)

    Do something good for  humanity and rent it at lower than market levels. You'll feel good.

    Yes quite happy to rent it for a bit less, I'm really just hanging onto it for a bit while some other financial stuff is sorted out (inheritance from a distant relative I've never actually met).    At that point I might sell it next time it is empty.   

  • fat buddhafat buddha ✭✭✭
    popsider wrote (see)

    Yes quite happy to rent it for a bit less, I'm really just hanging onto it for a bit while some other financial stuff is sorted out (inheritance from a distant relative I've never actually met).    At that point I might sell it next time it is empty.   

    that's what we are doing at the mo with the one that's just become vacant.  it's a Victorian property that had been completely refurbed when we bought the flat in it, but due to it's age the maintenance is only going to become more burdensome as time goes by so we think now is the right time to sell.  

  • RicFRicF ✭✭✭

    I'd like to know how many people would have become landlords if they first had to own the 'rented out' property outright first, instead of playing with the 'but-to let' advantage.

    Easy isn't it. Piss all your money up the wall and when you've messed up and have nothing to retire on, move the goal posts and screw someone else to pay for it.

     

    🙂

  • fat buddhafat buddha ✭✭✭

    bit extreme there Ric.  

    not every b2l landlord is in it to screw their tenants over. sure, there a number who are but I would suggest they are in the minority.  many of us are in this for the long term as the investments are part of our pension plan - being self employed I don't get the luxury of an occupation pension like many get so have to look after myself. the properties are part of a diverse investment strategy so that if some go uptits hopefully others will balance it out.  anything wrong with that??

     

  • RicFRicF ✭✭✭

    fb, you are lucky that the baby boomers (1946-1948 set) realised that they had screwed up. They had enjoyed every advantage which their parents had fought a war for, and when they got into their 50's, could see that unless they made some big money fast, their wonderful lifestyles were going to come crashing around their spendthrift necks.

    Being aware that having a house to rent out could be the solution, they changed the rules to allow them to buy (on borrowed money) the things and rent them out for a profit. It used to be called mortgage fraud.

    Its a one sided investment where one party benefits totally at the expense of another. Investment it isn't. You're not paying for it, the tenant is.

    If the deal was fair (which in 1995 I argued it wasn't) the landlord would only be able to charge the tenant the % of the rental value that the landlord had invested themselves, ie 10%.

    No chance. It was full mortgage and the rest.

    I don't give a toss about someones's sense of entitlement. Its up to the individual to accumulate enough assets without having to feed directly off someone else's efforts. That goes for agents and anyone taking a cut of someone's wages.

     

     

    🙂

  • popsiderpopsider ✭✭✭
    RicF wrote (see)

    I'd like to know how many people would have become landlords if they first had to own the 'rented out' property outright first, instead of playing with the 'but-to let' advantage.

    Easy isn't it. Piss all your money up the wall and when you've messed up and have nothing to retire on, move the goal posts and screw someone else to pay for it.

     

    Well I never have had a buy to let mortgage, neither did my dad as he bought it outright for cash about 20 years ago.  

    Having said that if the rules are there that allow that it's hard to condemn people for taking advantage of them - I don't agree with private education or medicine but I wouldn't blame people for taking advantage of them seeing that they exist.   

  • SuperCazSuperCaz ✭✭✭

    So you don't think that people have the right to invest their own money as they see fit then, Ric?

    Do you have a pension or ISA? Aren't they just ways of making your money grow at the expense of someone else?

  • Big_GBig_G ✭✭✭

    Ric, how do you earn your money (I know the answer to this as you've said it a few times, but I would like to see how you write it down)?

  • RicFRicF ✭✭✭

    No SuperCaz, its the way that ,Buy to Let is sold as an investment that is the problem.

    If you like the idea of making someone wealthy by paying their mortgage for them, then go ahead. Millions will never own their own home because (1) they'll never be able to save up due the rent they are paying, (2) the traditional cheap starter homes are all in the hands of investors.

     

    🙂

  • popsider wrote (see)
    Peter Collins wrote (see)

    Do something good for  humanity and rent it at lower than market levels. You'll feel good.

    Yes quite happy to rent it for a bit less, I'm really just hanging onto it for a bit while some other financial stuff is sorted out (inheritance from a distant relative I've never actually met).    At that point I might sell it next time it is empty.   

    Or give it away and go to heaven? (I'm not being entirely serious, you know)

  • popsiderpopsider ✭✭✭

    I don't believe in heaven anyway, having just had a 20% pay cut recently I feel I'm giving away my labour most days as it is.  

  • RicFRicF ✭✭✭
    Big_G wrote (see)

    Ric, how do you earn your money (I know the answer to this as you've said it a few times, but I would like to see how you write it down)?

     

    Ok, the pension fund that I was stupid enough to max out from 1988 has, due to compound interest and my belief in it, gone up today around £60.

    The cash that my wife and I saved due to living in the smallest property in a good area has today made about £20 (foreign interest).

    The house (maisonette) which I threw everything at to get rid of the mortgage (took less than ten years) is apparently appreciating at least £100 a day.

    And my day to day gardening jobs (9:15 to 3:45) for which I suggested around £100, actually got me £125. 

    There you go. That's a lifetime of having an investment mentality, and not trying to shaft people.

    I've also got MEN1 syndrome. Ying and Yang and all that shit.

     

     

     

     

    🙂

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