OP INION
Renting out your property
Homeowners will need a good letting agent if they are offered a spell of work overseas
J OHN STEPEK E X ECUT IVE EDITOR OF MONE YWEEK MAGA ZINE
Y 68
ou’ve been offered the opportunity to work overseas for a few years. You’d like to take up the offer – it’ll be a great experience. But you
already own a property in the UK. So what do you do? You could sell up, but that’s time consuming. Also, you’re quite fond of your house. And given the vagaries of the British property market, you can’t be sure you’d be able to buy back in, if and when you return from abroad. However, you can’t just leave it empty – the mortgage won’t pay itself, and you’ll need the funds to be able to rent (or buy) in your new country. So how do you go about letting it out?
BECOMING A LANDLORD If you’re moving overseas, it almost certainly makes sense to employ someone to manage and let your property on your behalf. While you’re getting used to a new culture and workplace, the last thing you want is the hassle of finding a tenant, or dealing with emergency plumbers at 5 o’clock in the morning. It is best to find an agent who will both
manage the property (deal with problems and get tradespeople in) and let it for you (find a tenant and manage deposit-taking, leases and the like). Get quotes from three different agents. Tey should be members of the Association of Residential Letting Agents (ARLA), which requires that they meet certain minimum standards in terms of deposit protection and training. Tis is important – in the UK, legislative demands on landlords are increasing, so you want make sure that your agent knows what they’re doing. Fees vary, but expect to pay between ten per cent and 18 per cent of your rental
JUNE 2 0 18
income, says independent property expert Henry Pryor. Also note that the laws around letting agency fees are changing in England and Wales. Letting agents will no longer be able to charge various fees to tenants, so make sure that this change is accounted for in any quotes you receive. Ask to speak to other landlords and tenants
of the properties that the agent manages – if they object, then clearly that’s a bad sign. At the end of the day, notes Pryor, your managing agent is representing you. An unresponsive agent with low standards of customer service will reflect badly on you. Moreover, you want your tenants to stick around for as long as possible, ideally until you return to the country – “voids” (periods of non- occupancy) are a landlord’s biggest bugbear and expense. Tat said, when draſting the lease, it might make sense to talk to your letting agent about including a break clause, just in case you need to return home early. Also, bear in mind that renting a property
If you want to secure professional tenants, your home really has to be in “move-in” condition
isn’t like selling one – if you want to secure professional tenants, it really has to be in “move-in” condition. So if the decor is a bit tired, or there are maintenance jobs that have been sitting at the bottom of your to-do list, then now is the time to make them a priority, and budget accordingly. Depending on whether or not your furniture is going overseas with you, you may also need to consider renting a storage unit for your valuables and anything that you don’t want to keep in the property.
THE PAPERWORK If you have a mortgage, you’ll need to tell your lender that you’re letting your property out, which means you may need a buy-to-let mortgage. Tat could imply a higher monthly bill, so talk to your lender early on in the process to get clarity for budgeting purposes. Also, be aware that mortgage-interest relief for landlords is being steadily reduced. Landlords used to be able to claim 100 per cent of the interest paid on their mortgage against their income tax bill, but this is no longer the case. In effect, it means that if you are a higher-rate taxpayer, then being a landlord with a mortgage is becoming more expensive. You’ll also need to talk to your insurers about getting a policy tailored to landlords. You have to pay UK
income tax on your rental income. If you live abroad for six months or more per year, you are automatically classed as a “non-resident landlord” by HM Revenue & Customs (HMRC), even if you are still a UK resident for other tax purposes. As a result, you will pay tax via the Non-Resident Landlord Scheme. Your letting agent must deduct tax at the basic rate (aſter allowing for expenses), unless
you apply to HMRC to have it paid gross. You will also need to report your rental income on your annual self-assessment tax return. Irritatingly, you can’t fill this part of the form in online, so you’ll need to send it by post by October 31 each year – so you might want to budget for an accountant as well.
BT bus ine s s tr a v el ler .c om
ILLUSTRATION: BENJAMIN SOUTHAN
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92
