Should you rent your property out since you have been unable to acquire a quick house sale, then you must have to consider the real expenses of becoming a landlord. The following is a set of costs you should think about when generating a rental as opposed to a sale decision.
1) Mortgage; what happens when your interest rates change? Are you going to be able to cover an increased interest payment? Mortgage rates are at an all time low, with only one direction to go...up! Will the rent you receive cover the interest payments when they increase?
2) Leasing gap periods; what are the results if it requires you a long time to get a tenant? Who will fork out your mortgage along with your rent for your new property you've shifted into? What happens between tenants? Tenants can certainly vacate whenever they want and probable every 6 months. It could mean that approximately 4 months every year of mortgage payments are actually unable to be insured by rental revenue.
3) Insurance; don't forget, you are still liable for preparing your insurance payments, which is normally a few hundred pounds per year.
4) Property Management; do you desire to take care of the property yourself or pay another person to maintain this on your behalf? You must budget between 10%-20% of your rent to pay a management firm.
5) Maintenance; this may be costly. What will happen should your boiler fails or a ceiling falls in? It needs to come out of your pocket right? Make sure you budget at the very least 10%-15% of your rent to cover this over the year.
6) Tenants Default on Rent; what if you get new tenants move in and they stop paying rent on day 2? It may take you six months to evict them, so how do you make your payments in the meantime?
Therefore renting your house away might appear to be a quick and easy remedy if you're struggling to sell your property quickly in a sluggish market. But, as the details above reveal, private property rental isn't clear of its downfalls and definitely doesn't promise an alternative.
So are there some other options available that will assist you to vacate your property now, assure your current mortgage payments as well as related charges are covered, and allow you to move on? The reply is yes! There are a small number of companies, principally focused on the London property market, which will now accept to pay you rent at a corporate rental price for your property. The fact is that the total amount they pay you will take care of all associated expenses in addition to your mortgage payments, insurance and property maintenance costs. The rental earnings you obtain will be assured. The entire process is completed through solicitors for your peace of mind.
Furthermore, these companies can guarantee to buy your property at a later stage, so you have the benefit of renting it out now to a stable company, without the tenant and cost issues, as well as a guaranteed sale at a later date.
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