Guest The Cutches Posted July 4, 2008 Share Posted July 4, 2008 Hi All, Like so many other PIO'ers, we have not been able to sell our house and now have to face the prospect of potentially renting it out. We have started looking into this and wondered if anyone has any info regarding things such as: Do you have to advise the building society and change mortgage or can you keep existing? How expensive and how good is rental insurance? Do you have to continue paying life insurance policies that were taken out with mortgage? How much extra is guaranteed rental and do you think it's worth it? Did you/would you use a friend as an agent if you had a possible tenant lined up? Marks out of 10 for stress of renting out vs stress of not selling:goofy:(we're at 10!) Would really appreciate any input, especially from anyone who is thinking about renting out or anyone who has already done it. Stax of thanx CC x Link to comment Share on other sites More sharing options...
getus2oz Posted July 4, 2008 Share Posted July 4, 2008 Hiya, sorry not got any answers but bumping this thread as I would also like any views on rental options and tax implications too. Advice anyone ?? Link to comment Share on other sites More sharing options...
Guest spock Posted July 4, 2008 Share Posted July 4, 2008 Hi, I don't know all the answers but we were going down the rental route and then once we decided we would rent we had an offer on the house! The rental agent told us we could get £1000 p.m rent, this is for a 4 bed, detached in Yorkshire, they would take 10% of that. Anything left over, after our mortgage was paid each month, would go into an account so that there was some money there for any repairs that might crop up. They re-assured us that they 'vet' potential tenants very carefully and have had very few problems. We would have to have the gas and electricity checked and certified for safety, smoke alarms fitted if we didn't already have them. The mortgage lenders (abbey national) insisted we filled in a form asking all sorts of questions and then they would see if they would let us rent! I don't really know why it matters as long as the mortgage is paid each month. The building insurance people said we would have to get insurance elsewhere for rental property. As it turned out the Abbey would let us rent. We had decided that if it got us to Oz then renting would have to be the way to go but we did have reservations, eg. if the present tenant moved out and no one else rented it we would have to pay the mortgage here and rent in Oz. Also, all those repairs that we do around the house as they occur - would a tenant do them, or get people in to do them and then send us the bill. So, on balance, I'm glad we are selling and have only had to drop £5000 off the asking price. Once we leave for Australia we know we haven't got any 'ties' left in the UK and can concentrate on our new lives without the hassel of property so far away. Sorry, I've rambled a bit. Hope some of it helps. Jo Link to comment Share on other sites More sharing options...
Guest Hannah Posted July 4, 2008 Share Posted July 4, 2008 Hi the Cutches, We have a couple of flats that we already rent out. We've never really had a problem. We havent been able to sell our house as yet so we might end up renting it out too. If you appoint an agent to 'manage' your property while you're in oz they will probably deduct tax before they pay you the rent unless you get permission from the inland revenue otherwise. I noticed that you have your 475 visa alrady. We are still waiting for ours. Hopefully it wont be too long............. What state ate you going to? Hannah and Steve x Link to comment Share on other sites More sharing options...
Guest beermeister Posted July 4, 2008 Share Posted July 4, 2008 It's not exactly the same, but we've had our Australian house rented out for over 6 years while we live in the UK. It's certainly do-able and we haven't had any really major issues. A couple of things we learnt along the way: Have low expectations of the managing agents - they're all pretty useless and are only interested in taking their commission. Even after changing ours twice over the 6 years, service never really improves long term Try and line up some local contacts to do repairs as needed - the managing agents use the most expensive (probably get a kick-back) and don't really discriminate on what really needs doing and whether it's good value or not. When you engage handymen who you don't know, as soon as they know you're 10,000 miles away, they take the p*ss. Arrange to have some local friends keep an eye on the property while you're away - someone close by so as not to inconvenience them. They don't need to get heavy and go inspecting it for you, just let you know if something looks sus. Be preared that, even with the best of tenants, your house will deteriorate in condition - if possible, try and think of it as an investment, not as your home that you get emotionally attached to Have a cash reserve to fix any big ticket item - e.g. if the boiler fails, it needs fixing pronto so you need to have a cash reserve When you get a good tenant, make sure they're kept happy - if you get some that care for your house rather than the type that complain they need an electrician every time a light bulb goes out, they're worth their weight in gold Try and get some advice from an accountant that knows both Oz and UK tax law - there's a lot to double taxation, particularly when it comes to capital gains tax Link to comment Share on other sites More sharing options...
KazzE Posted July 4, 2008 Share Posted July 4, 2008 We are going down this route as we speak, I have just instructed an independant morgage advisor to find me a good morgage - we need to re morgage as our current one is not that great and we could do with some of the equity - just need to decide how little or big an amount to take out. I had 3 letting agents out to give me an idea of rental income 2 said 8-850per month and 1 said 775 they were all confident of getting us good tenents, apparently there is a shortage of 3 beds in my area and of course there are the poor souls who are losing thier houses and now need to rent instead. All the agents quoted 12 0r 13% commission so around £100 per month - money for old rope but I don't want to put that responsibility onto my brother or a friend. We will use the agent that is letting my Dad's house, they inspect every 4 months and we have had no problems so far - Sequence (Fox&Son) had it before and they were rubbish. My sis had a small independant estate agency manage her house and they were not much good either, not firm enough with the tenents when they were breaking conditions of the lease (smoking in the house) I think you are better going with an agency that only does letting, hopefully they will be experts in their field. We are considering the landlords insurance that covers you against tenents running away without paying (as happend to my Dad with Sequence) and or them trashing the place - but that is more expence. Karen Link to comment Share on other sites More sharing options...
Guest The Cutches Posted July 6, 2008 Share Posted July 6, 2008 Hi the Cutches,We have a couple of flats that we already rent out. We've never really had a problem. We havent been able to sell our house as yet so we might end up renting it out too. If you appoint an agent to 'manage' your property while you're in oz they will probably deduct tax before they pay you the rent unless you get permission from the inland revenue otherwise. I noticed that you have your 475 visa alrady. We are still waiting for ours. Hopefully it wont be too long............. What state ate you going to? Hannah and Steve x Thanks for your post H & S, information is power (and all that!) We're going to TAS on our 475 and always expected that it would be the visa that held us up not the house sale. I guess if you've already decided to rent, you will go as soon as you've got ur visa's? Where are you heading? Thanks everyone for your input, think we have made the decision to rent, we aren't gonna tell the building society as we've got a pretty good flexible mortgage with no tie in so we can change to interest only and back again easily. We're getting some agents in to get info at the start of the week, so I'll post anything interesting. Keep the posts coming :notworthy: CC x Link to comment Share on other sites More sharing options...
Alan Collett Posted July 6, 2008 Share Posted July 6, 2008 Three comments re taxation: - Temporary visaholders who are resident in Australia are taxed differently in respect of UK source pension income to those who are permanent visaholders - New legislation has been introduced in Australia that appears to allow "negative gearing" - ie the offsetting of rental losses against other assessable income in Australia - in respect of overseas derived rental losses (so long as you are not a temporary visaholder). I will be preparing an article on the subject for Go Matilda News in the next few days. - In my experience many accountants in Australia are not across the special situation of newly arrived migrants with overseas source income/profits and losses. I would therefore encourage those who move to Australia with such issues to seek out a competent advisor. For what it is worth, I will be pleased to advise as to our fees upon receipt of a PM or email from affected persons. Best regards. Link to comment Share on other sites More sharing options...
Guest The Cutches Posted July 11, 2008 Share Posted July 11, 2008 Had 2 agents around yesterday and today and both gave the same figure for rental p/m and don't seem to think we'll have a problem getting tenants, in fact had a viewing yesterday from potential tenants so looks like things are finally moving. We had to apply for permission to rent from Building Society which we should get within the next week or two but looks like we can keep the same mortgage which is great! O/H is handing notice in on monday so looks like we'll be buying our one way ticket soon......yey!:jiggy: CC x Link to comment Share on other sites More sharing options...
Guest Pinhead Posted July 11, 2008 Share Posted July 11, 2008 Last time I went to Oz (2004) I tried to rent out my house and it turned into a disaster, long story basically I was going to screwed £4K by my agent for work that I had done later for less than £200!. To cut a long story short I returned to the UK after 6 months and I'm now on the verge of selling up and going to oz permanently. Personally I would not rent out your house, dealing with it even if you have a fully managed agent is just not worth the stress. And yes you will almost certainly be taken advantage of because you are 10,000 miles away, plus you don't have the extra hassle of tax issues & potentially having to change to a buy to let mortgage. Yes I would notify your lender, if they do find out you rented out your property contrary to their T&C they could forclose on the loan, you don't want to go there! House prices will continue to fall for at least another 2 years (-25%+) so financially it's not the best option either. Sticking the remaining equity in the bank will be a better option than seeing it shrink in your house even if you don't take it to Oz. I've had my house on the market for 6 weeks without a single viewing so I've just today agreed to cut the price by £10K (which equates to about the amount prices have fallen in that period). I would take £25K lower than the current listing price rather than renting out, if fact I'd even consider not going and allowing my skilled visa to lapse rather than renting. Link to comment Share on other sites More sharing options...
Guest The Cutches Posted July 11, 2008 Share Posted July 11, 2008 The renting is a last resort for us as we've had the house on the market for 10months and have dropped by £60k. Even doing that, the 2 parties that are interested in it are still waiting to see what happens with the market and it seems the more we drop, the more they wait. Unfortunately time is not on our side with regards to the ages of the kids with schooling, as well as other factors so for us this is the only way to go. I've heard both good and bad stories regarding renting and it's not ideal but it gets us where we wanna be. Fingers crossed we get decent tenants:notworthy: CC x Link to comment Share on other sites More sharing options...
Guest Hobbins2008 Posted July 15, 2008 Share Posted July 15, 2008 This is an interesting thread for me as I currently have a house rented out and am planning to move to Oz next year. I've had a look on the Revenue and Customs website and have found this: HM Revenue & Customs: The Non-resident Landlords Scheme It looks like you have to apply to HMRC to be allowed to receive your rent without it being taxed. I'll be getting in touch with them before I go. Link to comment Share on other sites More sharing options...
Guest Pinhead Posted July 16, 2008 Share Posted July 16, 2008 Correct by law your EA will deduct tax at 20% before paying it to you. It's easy to get the certificate from the IR but allow 4 weeks to be safe. Link to comment Share on other sites More sharing options...
Guest Hobbins2008 Posted July 16, 2008 Share Posted July 16, 2008 Correct by law your EA will deduct tax at 20% before paying it to you. It's easy to get the certificate from the IR but allow 4 weeks to be safe. Thanks for that Pinhead. Glad to know that it only takes a month to get the certificate. Was worried about the 20% deduction as our finances over there may be a little tight. I'll get in touch with my local tax office to discuss it. Link to comment Share on other sites More sharing options...
Guest Pinhead Posted July 16, 2008 Share Posted July 16, 2008 When you speak to them just make it clear that you are moving to Australia permanently and that you will be a taxable resident there and no longer in the UK. I didn't need to present anything to prove that, they just sent me the form to complete. Link to comment Share on other sites More sharing options...
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