According to the Office of National Statistics, every year, over 300,000 of us Brits choose another life abroad.
The big question is, “what do we do with our house when we move abroad?”
Should you let your property or sell it when you leave the UK?
Traditionally, most emigrants would decide to put the house on the market for sale, however, with current house prices on the slump and difficulties in getting a mortgage, sellers are opting for rentals instead.
It can be a great idea to rent your property when you move abroad. You could potentially generate a second income stream or pay of the mortgage on an asset for the future.
If you have never rented out a property, the thought of it can be daunting – moving abroad and renting, for most people, would be out of the question. But don’t stress, it is not as hard as you may think.
You have two choices as to how you will manage the tenancy agreement. You may choose to manage the agreement yourself or enlist the services of a local or online letting agent.
Option 1 – Using a Letting Agent to Manage your Property When You Leave the Country
If you have opted for a letting agent to manage your property, they will be responsible for the day to day dealings with your tenant.
This would include the following minimum requirements:
- Finding a Tenant in the first place.
- Drafting up a Tenancy Agreement and carrying out a credit check.
- Ordering an EPC if required.
- Checking the Tenant into the property.
- Carrying out quarterly inspections and reporting back by email/post to the landlord living abroad.
- Maintenance and repair work.
- Arranging payment of tax on behalf of the landlord.
- Checking the tenant out at the end of the agreement.
- Dealing with any legal issues such as non-payment of rent etc.
- Re-marketing the property to find new tenants.
Most agents would charge a one-off payment PLUS and an ongoing percentage of the monthly rent.
The initial payment would be for the marketing of the property, drafting the tenancy agreement, setting up standing orders and arranging the changeover of utilities etc. This one off payment can range from £200 – 75% of the first month’s rent.
The monthly percentage would range from 8% – 18% (more expensive within the M25).
These fees are negotiable!
Option 2 – Manage the Property Yourself from Overseas
If you choose the second option, and that is to manage the property yourself, you could potentially save an average of £1000 over a 12-month agreement however, you are advised to know a little about the legal aspects of residential lettings such as:
- According to Section 48 of the Landlord and Tenant Act, you must give your tenants a local contact address in the UK as an address that they can use to issue notices to you. This could be a friend or a member of your families address.
- Keep an eye on the rent payments – if your tenants are either consistently late with rent payments or they are over 8 weeks behind, you may be able to issue a specific legal notice to evict.
- You must supply the Tenant with a Gas Safety Certificate before they move in and it must be updated annually.
- You must supply the Tenant with an emergency number so that they can contact someone for help after hours.
- Register with HMRC and declare any income on the rental property.
There are a good handful of Landlord guidebooks available if you want to brush up on your legal knowledge of residential lettings. It’s always handy to have one or two laying around just in case you get stuck. Check out our rental jargon buster too.