If you’re moving in with your significant other and you both own a property, then you might be wondering whether to sell or rent out the “spare” one.
You could sell…
If your property is your first purchase, then it could easily go to another first-timer. There are lots of new house hunters looking for a home, so you could find a buyer pretty quickly.
Selling releases any equity you have in the property and so you can either save it or invest it in your new place. Of course, you might want to keep it aside in case you decide to buy a bigger place with your partner. The good news is that as you’ve just sold your primary residence, you won’t pay any Capital Gains Tax on any increase in value.
You could let it out…
Renting out your property provides a source of fairly reliable income for the future, as well as, if you decide to sell, that lump sum of equity down the line.
The security of still owning the property might also be important to you. Relationships can break up and so it’s good to have somewhere to move back to. If you need to move back into the property for personal reasons, these are grounds for giving your tenant notice.
There are things you need to remember if you’re letting out the property.
You’ll need a buy-to-let mortgage
Simply contact your lender and tell them that you’re renting out the place and they can arrange to change the mortgage from a residential one to a BTL product. This is important, as using a residential mortgage on a rental is actually fraud.
You’ll need landlord insurance
Insurers see rental properties as higher risk than residential, so your old home and buildings – and possibly contents – insurance will need to change to reflect this. Your current provider can help you.
You need to make sure the place is safe
Your property must have an annual gas safety check and get the certificate.
The same goes for the electrics, and also fire safety requirements.
There are also the 29 named hazards listed in the Housing Health and Safety Rating System (HHSRS) – your property will need to be free of them.
You also need to make sure you’ve checked your potential tenant’s Right to Rent status and place their deposit in a government scheme.
