renting out a flat questions

Viewing 31 posts - 1 through 31 (of 31 total)
  • renting out a flat questions
  • cozz
    Member

    my brother wants to rent out a flat

    what sort of % would an agent take ?

    his flat has a ground rent payable every 6 months, would he be best paying this himself out of the rental income?

    should it be added onto the amount he wants for rent
    He’s worried that if he just asks tenant to pay it, they could not pay, and then move out having racked up debt on it (its about £500 every 6 months)

    dooosuk
    Member

    For our flat, we pay the yearly ground rent and monthly management fee out of the rent. As owners, they are our responsibility.

    Tenants pay council tax, water, elec/gas, phone etc.

    Whether he factors the cost into the rental price is up to him. But I guess he’ll research the market price for his property and work out whether it’s worth his while or not.

    Gary_M
    Member

    what sort of % would an agent take? Agent I use on one property takes 9.5%, there’s also a tenant finding fee of 50% of first months rent but remember everything is negotiable

    his flat has a ground rent payable every 6 months, would he be best paying this himself out of the rental income? No, the owner is responsible for the factors fees/ground rent

    should it be added onto the amount he wants for rent The property will be worth what it’s worth on the rental market, you can’t add a bit on to cover factors fees.

    Premier Icon mattbee
    Subscriber

    We pay our agent 8% management fee. We pay ground rent etc same as we pay the mortgage. tenant just pays rent. We make approx £8 per month ‘profit’ after all the costs.

    thecaptain
    Member

    Ours was about 10% and extra fees on top for anything they could think of. To be fair we were out of the country and in no position to get anything fixed if/when it broke. We didn’t make any significant profit (apart from the property price increase) but at least the flat was still standing and habitable 10 years later when we returned.

    If living locally, I think I’d go without an agent. They are expensive for what they do.

    mikewsmith
    Member

    Rent is at market rate, income is what’s left after that. Agents are variable and depending on your situation not always needed.

    After that take a lot of pics and make sure they do a very good survey.

    Gary_M
    Member

    As Mike says you don’t always need to use an agent to manage the property – One property I have is 200 miles away so I use an agent for that, another is 20 miles away so only use an agent as a tenant finding service.

    But remember to rent the property there’s a few things you’ll need to do – gas certificate for heating and all gas appliance, this is included if you get a landlord central heating maintenance contract, you’ll need mains fed interlinked smoke and heat detectors installed – I did mine myself but can be quite spendy depending how many you need. Agent will also say you need fixed wiring test, portable appliance test, legionella test but these are not legal requirements, not in Scotland anyway, so if you’re happy with the wiring etc then you can sign a disclaimer.

    Marin
    Member

    Fixed wiring and leginella not required in England YET. If you leave appliances in flat PAT not needed but you can write into contract you will not replace if they break down. Most importantly treat your tenants like people not cash cows and your life will hopefuly be easier. It’s a long term game unless your minted to start with.

    Presumably flat is mortgaged so your brother should tell mortgage company, and check insurance too.

    dooosuk
    Member

    Presumably flat is mortgaged so your brother should tell mortgage company, and check insurance too.

    And the tax man next year 🙂

    brooess
    Member

    Agents fees to landlords likely to be going up later this year as Chancellor is seeking to make fees to tenants illegal.
    Rise in BTL has increased supply this year – putting downward pressure on rents
    house prices go up with supply of credit, rents go up with wages. Wages are currently stagnant and when inflation kicks in this year, likely to be falling in real terms. It’s a myth that you can just charge whatever rent you like and increase it when you like to ‘cover your costs’
    Depending where in the UK the place is, rents are already taking up 40%+ of take-home pay i.e. severely detrimental effects on tenants financial wellbeing so expect tenants to be increasingly bolshie about being expecting to pay so much to rent – it’s crippling a lot of people
    Institutional investors are building to let. This will increase supply of places to rent which will also put downward pressure on rents as supply increases.
    BTL/renting is not the easy money game people think it is, and with more and more discouragement from government it’s going to get harder, not easier to make it work.

    jambalaya
    Member

    All fees have VAT on top

    When we last where Landlords we paid the agent a fixed fee for findi gbthe tennet and them nothing. We “managed” the property ourselves. This involved explaing how to reset the oven clock after a powercut and one plumber callout. Mate of mine who rents his place out in London does the same, no monthly fee and does the maint himself, visits once a quarter.

    Rise in BTL has increased supply this year – putting downward pressure on rents

    Interesting, am seeing the reverse. Removal of tax relief means people are pulling out. Rents down in parts of London esp top end as employers aren’t willing to pay high rents as they cut costs.

    Premier Icon bails
    Subscriber

    you leave appliances in flat PAT not needed but you can write into contract you will not replace if they break down

    So what happens if the fridge breaks? You just leave the tenants with nowhere to store their food?

    Gary_M
    Member

    brooess did you just copy/paste that from the last landlord/rental discussion one here?

    Rise in BTL has increased supply this year – putting downward pressure on rents

    Interesting, am seeing the reverse. Removal of tax relief means people are pulling out. Rents down in parts of London esp top end as employers aren’t willing to pay high rents as they cut costs.

    Yep lots of people getting out of btl due to squeeze on profits.

    Premier Icon tomhoward
    Subscriber

    Mine charges 8% plus VAT, monthly. Then £200 fixed tennant finding fee.

    Ground rent and buildings insurance is done annually.

    I also pay the building management fee quarterly

    Premier Icon Sundayjumper
    Subscriber

    Agents around here used to charge 10% (+VAT) ongoing for management, or a one-off payment of 1 month’s rent (+VAT) to find you a tenant and draw up the initial contract then leave you to run it. The tenant would also end up paying ~£500 in “fees” to the agent; these will be getting passed onto the landlord soon so those figures will change a bit.

    IMO that is all money for old rope if you’re able/willing to do stuff yourself.

    Free ad on Gumtree, answer some phone calls / emails, do a couple of viewings, get a standard tenancy template online. Between you & the tenant you’ve saved nearly £2k for the sake of a couple of hours’ work. You can drop your rent £100/month compared to going via an agent and still be better off.

    The only problem I have is finding reliable tradespeople to do maintenance jobs for me. Their rates seem eye-watering for what is generally unskilled work and the quality is usually no more than “adequate”. I end up doing it myself most of the time.

    Gary_M
    Member

    IMO that is all money for old rope if you’re able/willing to do stuff yourself.

    All fine and dandy until you get a tenant that stops paying their rent, etc. Having said that I’ve been lucky and had dream tenants but you need to understand the risk.

    Premier Icon Sundayjumper
    Subscriber

    …you need to understand the risk.

    An additional benefit of the DIY route is you can personally vet the tenants. In the early days I did use an agent and there were two sets of tenants that I didn’t like and would not have dealt with through choice. One set in particular were always late with the rent (although never quite failed to pay), upset all the neighbours, constantly lied to me and left the place in a right state. Fortunately it was before the days of the tenancy deposit scheme thingy, so when they asked for their deposit back I just told them to do one. I was still out of pocket after fixing everything though.

    The tenants I’ve picked myself have always been fine.

    I’m well aware of the risk, and to date I’m about £15k better off for it.

    Gary_M
    Member

    I’m well aware of the risk, and to date I’m about £15k better off for it.

    I’m sure you do, that was directed at the op.

    If I was dropping my rent by £100 a month by not using an agent I’d be earning less than I do with an agent – agent cost apporx £85 per month

    Premier Icon Sundayjumper
    Subscriber

    I’m sure you do, that was directed at the op.

    But seeing as you were quoting my post it seemed you were aiming it at me…

    If I was dropping my rent by £100 a month by not using an agent I’d be earning less than I do with an agent – agent cost apporx £85 per month

    £80. £100. It was an example. For me an agent would cost comfortably more than £100/month. You’re more risk-averse than I am. We’re all good. I’m sure the OP’s brother will do his own sums to determine whether it’s 50p or ONE MILLION POUNDS in his case.

    Gary_M
    Member

    Someone’s a bit on the touchy side.

    Marin
    Member

    No idea bails my tenants all brought their own fridges. They turned down my offer of supplying new ones. My evil empire is ever expanding.

    Moses
    Member

    All fine and dandy until you get a tenant that stops paying their rent, etc

    And what would an agent do if this occurred? My experience is that they tell you the rent hasn’t appeared, then leave you to it.

    Gary_M
    Member

    And what would an agent do if this occurred? My experience is that they tell you the rent hasn’t appeared, then leave you to it.

    You must have a really bad letting agent. If my rent has ever been late the agent has been straight on the case, it’s their income too.

    poolman
    Member

    My agent charges 8% plus vat intro only. I self manage as i know the contractors he uses so instruct them myself. Rents are rising in Sw london anyway, but i usually pitch just below the market and keep the tenants for a few years.

    Best advice i have is keep a rainy day fund, i have never used mine but i know landlords who have made stupid errors through being desperate, like taking on an unsuitable tenant. Its just not worth the risk.

    Btl still works it depends on your level of debt.

    project
    Member

    as someone who works in the rental /sub let sector a few things of note, some tennants dont care, most landlords dont care they just want money/property, .

    Things the tennat does, eg mises a months rent, you ask them for payment, suddenly boiler packs up, you get it fixed, iit breaks again you then get a letter saying boiler is faulty, and the tennant then stops paying rent,other stuff breaks, and tennant uses that excuse agian not to pay rent.

    you then try to get them outthey say no , and many months later you get them out with damage to flat, and void rent, then council ask for council tax, water ask for water rates or meter reading, same with leccy.

    or sometimes you get nice tennants, youre a good landlord and both help each other out, tennant does diy well and repaints/ckleans does gardening etc, and you do repairs etc, and take a small gift round at christmas as a thankyou.

    cbike
    Member

    A fridge is not a portable appliance.

    But as far as is reasonably practical any landlord worth their salt should be aware of electrical safety.

    iolo
    Member

    If you are ever looking to find your own tenants, always make a point of visiting prospective renters at their current home if at all possible. You will see how they treat a property. If it’s clean and unbroken, there’s a better chance they’ll be ok.

    cozz
    Member

    cheers, I know a bit, I rent out my old house

    do it myself, deposit holding co

    template contract

    got good tenants, who look after the place, and don’t expect me to go round to fix stupid things they just sort themselves

    i fitted them a new kitchen as i said i would, treat them right, they are great

    my bro will prob do the same, a family friend is interested but can’t quite afford the going rate, but going rate less 10% agents fees, its almost there, so might be his best bet

    thank guys

    footflaps
    Member

    All fine and dandy until you get a tenant that stops paying their rent, etc

    Agent won’t do anything, you need Landlord’s insurance which covers eviction costs.

    We had to evict someone from the Wife’s flat, cost about £5k all in and took over 6 months all in. Right PITA.

    Gary_M
    Member

    a family friend is interested but can’t quite afford the going rate, but going rate less 10% agents fees, its almost there, so might be his best bet

    If that’s an option it’s the one I’d take for various reasons.

    Agent won’t do anything, you need Landlord’s insurance which covers eviction costs.

    That depends on your agent, I’ve been a landlord for over 20 years and had one non paying tenant, my agent sorted it and it didn’t cost £5k.

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