Fri 19 Jun 2020
Paul Bennett, Director
Have you ever heard of rent-to-rent or rent-to-buy? It’s where an owner-occupier rents out their current property in order to facilitate a move.
Sometimes property owners rent out their existing home instead of selling it – perhaps to become chain-free when they buy their next property, or to capitalise on high rental demand where they live. Others turn their home into a buy-to-let so they can advance other plans yet retain a property they own – maybe to pursue a lifestyle change or to relocate temporarily for work.
Renting out your residence – especially if it is a family home – is a little different to buying a property specifically with renting out as its purpose. Your home will be set up for owner-occupier life, and may be full of memories and cherished possessions, so Behr & Butchoff has produced a quick guide to renting out your main residence. As always, if you need further detailed advice, please do contact us but for now, you’ll need to know the following:-
Check mortgage restrictions: unless you own your property outright, there will be a mortgage attached to your property. Many owner-occupier mortgages prohibit buy-to-let activity so you’ll need to contact your lender, financial adviser or mortgage broker. They will establish any restrictions on your current mortgage and help you transfer to a buy-to-let mortgage, if necessary.
Switch to landlord-specific insurances: your existing insurance cover will not be designed for a buy-to-let and moving tenants in will probably invalidate your policies. Ensure you have lettings-specific insurance in place before a let begins. Landlords’ buildings and contents insurance will cover damage to your property’s structure, along with any fixtures, fittings and furniture you choose to leave behind. It’s also worth considering rent guarantee and legal protection products.
Decide whether to offer furnished or unfurnished: to some degree, your local rental market will influence how you offer a property to tenants, and the Behr & Butchoff team are only too happy to advise on what local tenants expect furniture wise. If you intend on leaving behind personal items of furniture, bear in mind these will be subject to wear, tear and accidental damage, and that they need to conform to fire safety standards. Ask us about the 'cigarette/match test'.
Choose to self manage or delegate to a professional: if you want to try your hand at being a landlord, there is a wealth of information available, as well as membership bodies and groups you can join. Beware: managing tenancies in your former family can be quite emotional, so be prepared.
If the legal compliance, rent collection and tenant liaison seems like too much hassle, Behr & Butchoff can manage the property on your behalf. As members of ARLA and with a dedicated property manager in house, we can offer an end-to-end solution so renting your home out is as ‘hands off’ as possible.
Get your home ready for the open market: you may have got used to living with unusual quirks with the central heating, a missing cupboard door or some stubborn mildew in the bathroom but your tenants won’t. The lettings industry now requires an exceptionally high standard of let to tick all the compliance and tenant welfare boxes, so consult with Behr & Butchoff as to what works are necessary ahead of marketing. Take, note, you’ll have to pay extra attention to gas, electrical, water and fire safety, as well as ensure you have a valid EPC certificate with a rating of at least an E.
If you’d like to start the process of renting out your own residence, we’re here to help. Contact us for a rental appraisal, a local lettings market update and compliance advice.