Renting out property

[marts1711]

Hi. I wondered if anyone has any thoughts on the pitfalls and upside of renting out my fathers property. He has been in a nursing home for 3 months now and is totally self funding so we need to create some income to help with the care bills. We are on an LA deferred payment scheme so any care costs built up will have to eventually be paid from the sale of the property but any help we can give to reduce the debt will be very welcome. The property does need substantial refurbishment before we could even think about renting it out. I will be funding this refurbishment myself so need to know everything I can about how to go about it. Just wish I had Sarah Beeny on hand

thank you in advance

 

[Kevinl]

Here's my comments on the subject from an earlier thread on the subject:

I looked into doing it with my mum's house but gave up with the idea and sold it, the main reasons were: she'd have to pay income tax as her pensions plus the rent would have been over the tax threshold, the cost of having all the set up checks you need before you can rent our (gas, electric checks and again annually), legal cost of tenancy agreements, landlord's insurance and any furniture has to be fire safe so the list went on. I could have handed it over to an estate agent to lease out and manage but that would have been 10% of the rent gone too.
Leaving a house empty has risks so maybe going down the rental route is best as it's in a trust so you don't want to sell but I'd get someone else to do all the work, estate agent to do all the letting side and an accountant to do all the income tax side of things then if there's any money left over the SS can have it. It probably would be better for the house to be lived in specially over the winter too.
K

 

[Witzend]

Have you had any quotes for a full refurb? Not that I want to sound negative, but from experience these things do often cost quite a bit more than you bargained for.

Of course, if you already know good, reliable tradesmen that is a huge help. If you don't, finding any can be a big hassle in itself. Do you live close by? Managing and organising it all can be extremely time consuming even if you do. (Again speaking from experience).

We looked at doing up an aunt's house after she went into a care home, with a view to renting it. It was clean and liveable but very dated (avocado bathroom and 70s kitchen etc.) and the cost of doing it up properly to the standard any good tenants would want would have been £30-40K. And since none of us lived close enough to organise/manage it all easily, it was eventually sold as it was. However we did do our own research on local sales vs rental values first, and took both estate agent and letting agent advice too.

The bottom line question is, will all the expense and hassle actually be worth the net rent in the end, after all the expenses/fees/any tax have been taken off? All these can make a very big hole in the 'on paper' rent. So much I think will depend on location, local demand for rental properties, and how much it would all cost vs. expected net rent.

 

[Jinnyspinner]

Hi my mum went into a home two years ago and is self funding. She has a deferred payment on her property and we decided to rent it out. I went through a letting agent from a local estate agent and found the experience a good one. They arranged for all the relevant checks to be done. All I have done is change the insurance policy and notify the utilities company. They have found a suitable couple to rent. The checks and fees will come out of the rent to start with, but at least she will come out with some income towards the care home fees. It wasn't the hassle that I thought it would have been.

Hope this might help

 

[fredsnail]

We rented out Grandad's house while he was in a care home - he was in a care home for over 6 years before he passed away.

We let it through an estate agent and they took 10% of the rent each month - however they also dealt with finding the tennants, any issues and a lot of the paperwork of being a landlord.

I set up a spreadsheet to produce the accounts which wasn't too bad to do and Grandad never paid more than £100 rent in any year due to offsetting allowable expenses and using up all of his personal allowance - bear in mind that not all benefits are taxable - attendance allowance is not so it doesn't take up any personal allowance band.

During the time we let on Grandad's behalf we had 5 tennants - 3 good, one not great and one nightmare (luckily the bad ones were followed by the good ones).

If you do chose to rent get the opinion of several estate agents as to the value - there was £100 per month difference with the ones we asked - and also the commission levels were different.

Good luck.

 

[marts1711]

We rented out Grandad's house while he was in a care home - he was in a care home for over 6 years before he passed away.

We let it through an estate agent and they took 10% of the rent each month - however they also dealt with finding the tennants, any issues and a lot of the paperwork of being a landlord.

I set up a spreadsheet to produce the accounts which wasn't too bad to do and Grandad never paid more than £100 rent in any year due to offsetting allowable expenses and using up all of his personal allowance - bear in mind that not all benefits are taxable - attendance allowance is not so it doesn't take up any personal allowance band.

During the time we let on Grandad's behalf we had 5 tennants - 3 good, one not great and one nightmare (luckily the bad ones were followed by the good ones).

If you do chose to rent get the opinion of several estate agents as to the value - there was £100 per month difference with the ones we asked - and also the commission levels were different.

Good luck.

thank you all for your comments. Especially good to know that AA isn't taxable so I think even with rent coming in dad wont meet the threshold.
Do I have to notify DWP if we decide to rent it out?

 

[jenniferpa]

thank you all for your comments. Especially good to know that AA isn't taxable so I think even with rent coming in dad wont meet the threshold.
Do I have to notify DWP if we decide to rent it out?

Not unless he is receiving some kind of financial needs based supplement such as pension credit.

 

[dottyd]

I rent out two houses.

No problem at all. I spent 12,000 doing up my aunts house. New bathroom, new kitchen, new rewire, new plastering, painting.

Mums was in better condition.

Ive got some lovely tenants.. Some have improved the property even.

It's kept the assets in the family.

To me its a no brainier.

 

[Witzend]

I rent out two houses.

No problem at all. I spent 12,000 doing up my aunts house. New bathroom, new kitchen, new rewire, new plastering, painting.

er.

Crikey - you'd be looking at around double that anywhere near here.