Updating post from Reddit.
Hello, I was wondering if anyone knows any problems with renting out my home that i own while i rent and live in another.
I moved for work and family but cant sell house
Thanks any help or signposting appreciated
If you have a mortgage you will need consent from your lender, that may involve a change of mortgage rates or may not, usually you will need to have at least 25% equity built up.
You will need to get an EICR, EPC, Gas Safe cert, install carbon monoxide and linked smoke detectors, a legionella cert.
Then you will need to get landlord insurance for the building (contents if renting furnished), landlord specific boiler cover.
You will also need to declare the income to HMRC, so will likely need to sign up for Self Certification (all income from renting is taxable, though you will get 20% credit on mortgage interest only).
As you won't be local, you probably will want to employ an agent.
Edit: as for council tax, the tenants will be paying that. Most councils won't charge for periods of unoccupancy up to around 6 months (unfurnished).
What kind of problems?
Dp you mean legal problems?
None that I can think of.
Yes like signing a tenancy agreement this end or paying 2 lots of coincil tax, priority tenancy.
I dont know really but i feel there is something out there to trip me up
Well, I suppose it depends what your tenants pay, and what you are being asked to pay as a tenant.
You could end up paying 2 lots of council tax and utilities.
Yes money aside that doesn't create any weird problems does it?
I did it for 6 months and no, no issues.
It did make me think I was under valuing my own rental though lol.
Yes, you will need to get consent from your mortgage lender to rent it out. If you have a mortgage lender plus you'll require all the other legal requirements. As a landlord, gas, electrical certificate, etc. You'd be best advised on the nrla to find out the pre-tenancy requirements to make sure your house is up to standard. You will also require a landlord's insurance for the buildings. As a condition of the mortgage, you may want to consider rental guarantee insurance. If it's your first time renting a property, you will likely want to instruct a letting agent to help you
Whilst it is vacant you will have to pay all the bills still, such as council tax.
Nothing stopping you renting a new place..
We did this but rented abroad during Covid as we took the opportunity to try something new. We came back after 12 months. The following is a summary of what we did because we had no problems and theee may be something you have not thought of.
We used OpenRent to find tenants and were very open with them that it might be temporary, they are ok with this because at the time they were looking for a home.
We went out of our way to follow regulations so they had an Assured Shorterm tenancy agreement, protected deposit and all the certificates required. We did a check in report.
We did not have a mortgage so no issue with getting approval but we do need a landlord license in our borough so we applied for that. Fun fact the council did not approve it until 4 years later.
As my wife was a SAHM we got a deed of transfer of beneficial interest so that she could claim all the income and pay base rate tax on the income.
To mange the rental my wife l opened a personal starling bank account for the property rent and all costs. I set up the accounts spaces feature to move 20% of rent into a space called tax and 5% in a space called maintenance. The rest went into our current account.
We decided to move back after 8 months, let the tenant know informally befor issuing them a S21 notice and all was good.
My wife submitted a self assemble t when due and paid from the tax space.
It's not an issue, the situation you outlined happens all the time, moving for a job and not wanting to or being unable to sell a home is not exactly unheard of
I know quite a few people who did this, many who moved for work or move in with a partner do exactly this.
We do this - no issues at all. Having said that, we have no mortage on the house we own. Our tenants pay all their utilities and council tax - we pay those in our rental. Only thing to watch out for is it's not like-for-like income-expenditure - you need to account for tax on your rental income as well as all your costs (eg letting agent management fees if you go that way and any repair/maintenance costs on your owned home).
On top of complying with all the rental regulations and getting mortgage permission, consider the long term plan.
If this is only temporary and you plan to move back it's very important this is made clear to tenants who are selected carefully and you employ a respected competent letting agent with proven track record who will keep up with inspections, maintenance and the legal side of things.
Rental laws will soon be changing, making it harder and longer to evict bad tenants so its import to avoid people who might play the system and stay until the last minute (i.e. court eviction aglfter months) should you need the property back.
Otherwise it makes total sense from the limited info we have.