Tuesday, March 08, 2005

For Rent

First of all I should post the most important fact de jour - My mother is OK - Biopsy results came back clear. However she needs to be kept an eye on as she is a bit lumpy in the breast area and needs to have mammogrammes every six months. It is a good job she does not know how to use a PC or else I would not be getting my pocket money this week!
So it is back to the Harper of old, I can feel a few jokes coming on - One of them being the sheer injustice I discovered yesterday when I had a dreaded Estate Agent to my castle to tell me how much I was gonna make becoming a landlord. Hummmmm, I decided to reserve judgment on the guy, who was called Chris and looked younger than Garath Gates. But I cannot bite my tongue any longer. What a rip off. Renting one property is not a fast way to becoming the next Richard Branson. The fees are extortionate and I am compelled to let the world wide web know what to expect if they go off traveling for 5 months, come home, become a landlord and get the hell out of dodge back to the land of opportunity.
The finders fee, which consists of putting an ad in the local paper and posting the property on the net., conducting credit checks on the tenant and collecting a deposit and 1 month's rent is 750 quid (please not I do not have a pound sign on this PC).
Then that is it - I am on my own, living 6,500 miles from home and I am responsible for collecting subsequent rents and dealing with any problems which occur such as malfunctioning washing machine etc etc.
Dealing with failing electrical equipment and hassling people for non payment of rent is not an ideal job if one is living 8 hours behind the UK and have a 10 hour flight to contend with when the demands call for it.
So, the full management package may seem appealing, that is if one is prepared to pay 65 quid a month on top of the finders fee to leave the Agents in charge. This does not insure one against anything. As a landlord one would be expected to accept the Agent's work men visiting the house to carry our any required works and would just get the cost deducted from the rent before it even reaches the bank account.
The inventory of items is costly, approximately 70 quid for the initial checks then the same again for them to calculate the exact extent to which the tenant has fleeced you of your life time collection of pots, pans and crockery.
Each time a 6 month lease is signed the finders fee is payable and the tax for one traveling abroad is automatically deducted from any rent at 22% or 40% (I do not get these figures, but I am sure I will once I speak to my accountant).
If all of that is not enough one has to change the mortgage to let out a property, which will cost about 500 quid, get all the gas safety certifications from a Corgi registered geeza and make sure any furniture one leaves is fire proof!
I have slept on the idea of renting, and as I am only planning on doing it for 6 months and have no intentions on planning to live here again. It seems that out of the 6 months rent I will only get 3 months, the Agent will get the same. Now if he looked like Garath Gates and has as big a willy as Jordan put it in her autobiography (yes, I can admit to reading this but only as an aid to get me to sleep through the jet lag!) I may be prepared to throw away so much lolly. But he wasn't, and I don't think I will thank you very much.
I am getting a second opinion this evening, which means hoovering, dusting and hiding all my mess under the sofa yet again. Then listening to all the dribble about what I will be liable for if anything so much as a cup of tea gets spilled on the carpet.
Decisions, decisions I want to sell, however all my elders are advising against this, as it is an investment. So is putting the cash in a high interest account. What are the tax implications? Any comments?

1 comment:

Russell CJ Duffy said...

Hi Jo,

My next door neighbours did something similar to what you are thinking of doing.

Similar but not the same.

About seven years ago now, Ray and Barabara (lovely people) decided that since their eldest son was going to uni in Portsmouth that it would be cheaper for them and their's if they, by releasing the equity in their home, bought a property in Portsmouth for Jon, and a bunch of other students to rent.

It worked very well for them because they had a son who could kind of keep an eye on the place and also because Ray, unlike me, knows how to use implements such as hammers and screw drivers and could maintain the place.

A couple of years later they did the self same thing for their other son.

They now have three properties, including their own and are making a nice bit of readies.

All of this has relied on Ray's ability to do running repairs to the seperate places.

The only way you could conceivably do it is if you can possibly find someone, business partner, that can act as a handy man and look after your property. This of course will mean paying him to do effectively what those rip of merchants wanted to do.
Another thought is to find someone you know and trust to move in, with the proviso that they do all the running repairs that you would then have to reimburse them for.

Not an easy one is it?