It is fair to say that letting out your property can be a very long process, however it also allows an element of freedom as it provides an opportunity to move at a time where selling has become more difficult than it has been previously. This is due to the face that it enables you to move and rent elsewhere and/or buy another property without having to sell your own. In addition to this, you now will have the responsibility of being a landlord which can be stressful.
First of all you need to take care of your mortgage, because it can lead to terrible consequences if you end up breaching the term and conditions of your home loan. The easiest option would be to keep your mortgage as it is, and you can still rent out your property on a temporary basis, while you relocate and rent a home somewhere else. However, problems may arise when letting out your property, if you decide to buy another one. This will cause further issues, because you will be taking on two loans. In this situation, the problem can be solved by taking out a buy-to-let mortgage. Standard owner-occupier mortgages will have lower rates of interest and smaller upfront fees than the buy-to-let mortgage. Furthermore, the buy-to-let lender will need to know whether the rent that will be charged is going to cover the mortgage interest payments. Therefore, the lenders will have to ask for a higher amount of rent with interest payments of 125% instead of 100%. You will need to let your buildings and contents insurer that you are letting your property; otherwise your insurance will be invalid.
However if you be faced with some problems if you are planning to let out your current property to purchase another one, as you will be taking on more than one loan regardless of whether you aim to have your tenants pay off one of them. As a result you may find it is easier to take out a buy-to-let mortgage. These normally include higher rates of interest and larger upfront fees than the typical owner-occupier mortgages. The buy-to-let lender may want to be aware that the rent you are charging will cover the mortgage interest expenses. Currently, lenders are asking for rents that cover 125% of interest payments in comparison to the 100% they used to ask for. Your buildings and contents insurers should be informed that you are letting your property as this will ensure the validity of your insurance.
You may be thinking how much rent would be reasonable to charge the tenant. However, you will not need to decide alone as the letting agent will give you an estimate for the amount of rent you can expect to charge. You have to remember that the tenants may try to negotiate a lower price, so it is sensible to introduce the property at a higher price than expected. Also, there are situations when the market is overwhelmed with rental properties, so rental prices may drop.
Additionally, they will organise how the rent payments are going to divided and levy their fee. These can differentiate, depending on factors such as the market, the area the property is in and the property itself. However, you will be expected to pay 10% of the rent you receive in fees, or even more depending on the service you have selected. If you want to be safe, you should ensure that the agent is a member of a recognised body.
There has been a change in the law since April 2007 which prevents landlords from being unfair to their tenants. It states that your tenant's deposit must be kept in a government authorised tenancy deposit protection scheme which will be held there until the tenancy ends in which it will be returned providing that the tenant has kept your property in good condition.
First of all you need to take care of your mortgage, because it can lead to terrible consequences if you end up breaching the term and conditions of your home loan. The easiest option would be to keep your mortgage as it is, and you can still rent out your property on a temporary basis, while you relocate and rent a home somewhere else. However, problems may arise when letting out your property, if you decide to buy another one. This will cause further issues, because you will be taking on two loans. In this situation, the problem can be solved by taking out a buy-to-let mortgage. Standard owner-occupier mortgages will have lower rates of interest and smaller upfront fees than the buy-to-let mortgage. Furthermore, the buy-to-let lender will need to know whether the rent that will be charged is going to cover the mortgage interest payments. Therefore, the lenders will have to ask for a higher amount of rent with interest payments of 125% instead of 100%. You will need to let your buildings and contents insurer that you are letting your property; otherwise your insurance will be invalid.
However if you be faced with some problems if you are planning to let out your current property to purchase another one, as you will be taking on more than one loan regardless of whether you aim to have your tenants pay off one of them. As a result you may find it is easier to take out a buy-to-let mortgage. These normally include higher rates of interest and larger upfront fees than the typical owner-occupier mortgages. The buy-to-let lender may want to be aware that the rent you are charging will cover the mortgage interest expenses. Currently, lenders are asking for rents that cover 125% of interest payments in comparison to the 100% they used to ask for. Your buildings and contents insurers should be informed that you are letting your property as this will ensure the validity of your insurance.
You may be thinking how much rent would be reasonable to charge the tenant. However, you will not need to decide alone as the letting agent will give you an estimate for the amount of rent you can expect to charge. You have to remember that the tenants may try to negotiate a lower price, so it is sensible to introduce the property at a higher price than expected. Also, there are situations when the market is overwhelmed with rental properties, so rental prices may drop.
Additionally, they will organise how the rent payments are going to divided and levy their fee. These can differentiate, depending on factors such as the market, the area the property is in and the property itself. However, you will be expected to pay 10% of the rent you receive in fees, or even more depending on the service you have selected. If you want to be safe, you should ensure that the agent is a member of a recognised body.
There has been a change in the law since April 2007 which prevents landlords from being unfair to their tenants. It states that your tenant's deposit must be kept in a government authorised tenancy deposit protection scheme which will be held there until the tenancy ends in which it will be returned providing that the tenant has kept your property in good condition.
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