There are a number of reasons why you would consider renting out your home. For instance, you may have been unable to find a buyer for your property and are desperate to move to a larger property to accommodate a growing family. Another reason could be that you would like to move overseas for two or three years but would still like to come back to the same property in the UK after that period.
Renting out your home is a big decision and there are a number of factors that you need to consider before committing yourself so let’s have a look at some of them.
Find out about property rental
You need to do your research to make sure that the property rental market is for you as it is not always “plain sailing”. For instance, you may find yourself in the unfortunate position of having to evict the tenants for some reason.
Suitability of property
Your home needs to be suitable to rent out. For instance, will it attract tenants and are those tenants the sort of people you would be comfortable letting to? For example, you may own a brand new 2-bedroom apartment that has been built close to a university. Therefore, it could make ideal living accommodation for students but would you be happy allowing students to rent out your new, desirable home? However, if it were an old four bedroomed terraced property you may feel comfortable renting it to students.
There is no point in renting out a property if it is not financially viable to do so. At very least, you would want the monthly rent to cover any outgoings the property has such as mortgage repayments, landlord insurance and maintenance. Ideally, it would be nice to make some net profit.
You could deal with the whole letting process yourself or employ a letting agent who will receive a percentage of the rental income for providing their services that could include advertising the property, vetting the tenants including taking up references, visiting the property periodically to check it is being satisfactorily maintained by the tenants and deal with the collection of any rent and chase any arrears.
If you have a mortgage on the property you will need to inform the lender of your intentions to let it out and obtain their permission to do so. This may involve a change in your mortgage terms such as the interest rate.
You will need to protect your investment property by arranging landlord insurance as ordinary owner-occupied buildings and contents cover is not suitable for a property that is rented out. Further information can be found on this website.
We trust that the above has been informative.