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Can you rent out your house to someone and keep it up for sale?

Discussion in 'Personal' started by MrsBauer, May 29, 2011.

  1. Hi,

    I need to sell my house to relocate but the Market is slow. Can we get a tenant in and keep it up for sale as long as they are ok with it? Anyone done this or have any advice?

    Thank you!
     
  2. I could be wrong, but I imagine it'd be hard to find a tenant who'd be happy with this arrangement. I myself would feel a bit insecure and unsettled by it!
    Maybe you could compensate by dropping the rent though.
    Good luck [​IMG]
     
  3. giraffe

    giraffe New commenter

    Maybe students would be useful tenants rather than someone who wants to make it into a family home?
     
  4. Anonymous

    Anonymous New commenter

    I live in rented accommodation. I could not imagine living with the insecurity of knowing the house might be sold and the hassle of viewings. Still I suppose someone might.
     
  5. catmother

    catmother Lead commenter

    That was my thought too,especially as OP was speaking about her parents dropping in before viewing to "tidy up". I'm pretty sure that tennants have the right to not have their personal belongings "tidied up"!
     
  6. By that I meant the things you'd do before a viewing- cut the grass/clean windows and floors etc.
    I'm not so stupid to expect to mess around with their "personal belongings". I'd have to expect that they would be willing to tidy up if asked and yes, I would agree the terms and therefore the price with the tenants.
     
  7. jubilee

    jubilee Lead commenter

    You, or your representatives, can't just drop in whenever you want to if renting to tenants. They have a legal right to quiet enjoyment of the property. Any inspection visits must be with the agreement of the tenant and you have to give them at least 24 hours notice in writing. You can't just use your master keys to gain access unless it's an emergency such as a gas leak or burst pipes.
    Think of it as being the same as someone renting a Council house. No-one from the Council can drop by and gain entrance whenever they want.
    You, or your representative, cannot tidy up someone else's home either. Imagine if someone you were renting from arrived and started sorting out your things.

     
  8. jubilee

    jubilee Lead commenter

    Cleaning their floors would not be acceptable. It would also involve moving their things.
    Gardening services and window cleaning can be provided by a landlord if the tenant agrees.
    The tenant has to agree to you or your rep making periodic inspections (one or two per year perhaps) but they don't have to agree to viewings by prospective buyers. They would not want to take time off work, for instance, to protect their possessions during a viewing and might not be satisfied that an estate agent , or other person, would be super vigilant on their behalf.
    I've seen auction properties with a sitting tenant advertised where it specifically says that no viewings are possible.
    I have a rental property (students) and need my tenants' permission for prospective new tenants to look around.
     
  9. Phoenixchild

    Phoenixchild Occasional commenter

  10. MayKasahara

    MayKasahara New commenter

    You would need to take proper legal advice with this. My understanding is that under an Assured Shorthold Tennancy you don't have a legal right to get your property back until six months after the tenancy started, regardless of how long the contract is for. I also think you need to give two months notice to the tenants that you would like them to leave (called a Section 21 Notice) which might be difficult if you don't know how long the property will take to sell. However I could be wrong! I would suggest getting some advice from someone who knows about property law. Good luck!
     
  11. Thank you for your help- I'll look into it.
     
  12. jubilee

    jubilee Lead commenter

    Correct. You'd need to declare the rental income after each tax year (you need a tax return form with property pages). You'll have to keep accounts with different columns for income, mortgage interest, repairs, legal costs, insurance, any commnunity charge or utilities that you pay etc. If furnished, you can claim 10% of rent received as a Wear and Tear expense too.
    You'll find the Inland revenue booklet IR150 useful for making sure that you claim all the allowances to reduce you taxable profit. I made a taxable loss for several years and you roll over the losses each year until you eventually record a taxable profit (ie, you can't offset losses to reduce tax on your employed income).
    When you sell, you would have a potential liability for Capital Gains Tax based on any increase in the value of the disposed asset but that is unlikely to lead to a tax bill as everyone has CGT allowance of over £9k per year and as you have a partner, you would have 2 allowance in the sale year if he is a co-owner of the house. You would also apportion any profit between the owner-occupied years and the rental years and only the rental year would potentially give rise to a CGT bill. Also, you are allowed to deduct your property acquisition costs and sale costs from any profit and any property Capital improvement costs since renting. If you sell in a year or two, I think we can safely say that you're unlikely to be ba making over £18k profit on the current market price after deducting costs.
     

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