Updating post from Reddit.
My brother and I inherited my late mum's flat, currently vacant. Someone is interested in renting it - a friend of a friend, effectively. We've never been landlords before, so we would probably get it managed by an agent. However, we also have family friends who we have included in the inheritance (there was no will, but we know what mum's wishes were). So from a tax point of view, this seems a bit complicated - i.e. my brother and I would be paying tax on the earnings but then passing on some funds to them, minus an estimate of our tax, I assume. In other words, for a newbie landlord, the fact that the property is co-owned seems less than simple to deal with, let alone trying to include some others.
Then there is a second concern - we want to sell the flat, but the exterior looks pretty bad at the moment. This will markedly improve by Spring next year. So we would ideally get a 6-month tenancy, and sell after that. However, if the provisions of the Renters Rights Act (to be) are brought in within that time, the tenant can stay for a year, if I understand things correctly. At the moment I find the idea of being a landlord for a year a bit overwhelming, it's not something I've ever wanted to be.
My question is, with these considerations in mind, would you go ahead and rent the place out? I'd be grateful for any experienced viewpoint on this!
Renting to friends of friends.... Typically a nightmare.
Rent to unknown people through an agent. The relationship (a business one) is then clear.
The correct answer
No. Too complex. Refurb it sell split the profits if your brother wants to be a landlord he can do it on his own.
I would get it sold asap.
Don’t make life difficult by preparing all the landlord stuff first. You won’t make enough money to make up for it either as to money or as to hassle.
Unfortunately probably best not to allow anyone to move in, even informally and free. These things can go very wrong.
You will need a grant of letters of administration to sell, so start the paperwork now. You can almost certainly do it yourselves - the gov.uk website is great.
You will need to do an EPR, electrical safety, gas safety, maybe a licence, all for 6 months income and if you rent for longer capital gains.
20 years ago yes. Now it's an absolute PITA keeping up with all the ridiculous new rules and red tape, while the council and government constantly think up new ways to fleece you.
I’d sell it now if you are going to sell it and split the funds after sale. It’s really a no brainer if you are not committed to renting it out for years.
I had an empty place that was on the market to sell. Would have loved to have let someone live in it on the understanding that they move out before the house completes. Wouldn't have even asked for any rent. It stayed empty for a year because that setup is incompatible with current and future legislation, even if they're a friend of a friend.
It was cheaper for me to keep it empty than risk a short term tenancy.
Agree with all the other ‘sell it’ posters. Your scenario is far too complex, plus prepping everything for a short rent… nah. Another issue is that even if you issue a 6 month tenancy they have no obligation to actually leave then, and you could find yourself with the headache of many months of expensive eviction proceedings.
Never do business with friends, plus the overhead of a proper tenancy, the risk of a tenant not leaving, the difficulty of selling a property with a tenant in situ and the reduced price as a result tell you this is a bad idea.
Never needed to read any further than renting to a friend .
Worst idea ever , please don’t do it , if you do decide to, do it all above board and legal and use an agent of you don’t know anything about letting . There is just too much legislation at the moment , you could lose a lot of money if you decide otherwise .
If you're planning to put it on the market in 6 months anyway, and it needs working doing to it before you sell, then don't bother renting it out, you're just inviting a whole world of pain and up-front cost to get it ready to sell, and your agent will stick you for a bunch of fees, too. Add the potential cost of getting rid of a tenant who has decided to stop paying rent and now needs evicting, and your hope of making a few quid before you sell it next spring is down the drain.
Save yourself a ton of headache, just renovate and sell.
Have you gone through probate yet? HMRC need to sign the probate before you can sell.
They won’t be ‘friends of friends’ for long if they move in. I’ve been burnt too many times with this: strangers only, thanks.
Selling sounds like the simplest choice.
Landlording will only be more difficult in the future and anything that goes wrong down the line will come with added responsibilities and pressure from family friends.
Don't rent to a friend, or friend of a friend.
Do everything legally, use a proper contract, and be aware of your rights and obligations.
Last, and most importantly, be very careful who you rent to. And get landlord's insurance.
Never.....ever rent to friends/colleagues if they really want it list it with an agent