Best way to structure three sharers contact?

by Readers Question

13:03 PM, 8th December 2014
About 5 years ago

Best way to structure three sharers contact?

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Best way to structure three sharers contact?

I have just refurbished my first 3 bed house bought on BTL mortgage. The property is, in Croydon (Article 4 area) a prospective tenant has just approach me wanting to rent it with 2 other friends.

Best way to structure three sharers contact

Do I sign AST just with him, or joint AST with 3 people.

As an “inexperienced” landlord, renting a property on room by room basis would breach the terms of my BTL mortgage.

If I don’t let it out to one family as a single let, what are my options?

Do I need to inform my council, if there are 3 unrelated people (they will be sharing the bills,) living in my property? Croydon council is very restrictive!

Do I need to inform the insurance company?

It is my first rental property and hearing about the nightmares people had, signing guaranteed rent contracts with the agents, I don’t want to choose that route.

Thank you in advance for all constructive feed back.

Regards

Iwona



Comments

Iwona Kowalska

13:44 PM, 15th December 2014
About 5 years ago

Thank you everyone. You are right Mandy about changing the strategy.It seems almost impossible to maximize the rent from 3 bed property with all the restrictions imposed by the Council.

Iwona Kowalska

13:46 PM, 15th December 2014
About 5 years ago

Reply to the comment left by "Puzzler " at "13/12/2014 - 12:09":

Hi Puzzler, it would be interesting to know, which council is so liberal?

Iwona Kowalska

13:53 PM, 15th December 2014
About 5 years ago

Reply to the comment left by "Jill Coyne" at "11/12/2014 - 22:46":

It seems like a good idea. I will research it with Croydon Council. It might be tricky from the insurer's or a lender's perspective. Do you mean holiday lets?
It seems to me that most people would want to stay longer than 6 months. So how would you market a property which only offers up to 6 month stays. My property is unfurnished, I guess I would need to furnish it then?

Jill Coyne

22:22 PM, 15th December 2014
About 5 years ago

Reply to the comment left by "Iwona Kowalska" at "15/12/2014 - 13:53":

My suggestion about short lets was probably a bit irrelevant to you- & it wasn't intended to confuse you! But if you were interested talk to some good agents about options. I supposes it's a bit like holiday lets. For short lets the property needs to be fully furnished so that people can just move straight in & you pay all bills. Might suit people who are having their own property refurbished or people who have short term jobs in a different area- company lets etc. Rents higher but more void periods- you have to decide what works for you in your location & situation.
Whatever you do, get info so you can stay legal, is my advice!

Shakeel Ahmad

22:25 PM, 15th December 2014
About 5 years ago

"They have referred me to the website – under licences "
Typical Council or they will not talk to you & quote you data protection Act.

The Website & data protection has given the Council to not to do anything as if they did anything in the first place.

The Councils are now only & only interested in extorting money out of people & make it plain obvious barring honestly stating it.

Iwona Kowalska

23:08 PM, 15th December 2014
About 5 years ago

Reply to the comment left by "shakeel ahmad" at "15/12/2014 - 22:25":

Sorry to hear that Shakeel. You are clearly having a similar experience to mine.

Iwona Kowalska

23:12 PM, 15th December 2014
About 5 years ago

Reply to the comment left by "Jill Coyne" at "15/12/2014 - 22:22":

Thank you Jill. There is no other way but legal as far as I'm concerned.
It certainly is an eye opener.

Mandy Thomson

10:07 AM, 16th December 2014
About 5 years ago

Short term letting, assuming Iwona wants to consider it, might be an option. I know Croydon well and it's a major business centre as well as a good base for Central London and the South East.

Nippon Properties http://www.nipponproperty.co.uk/en/landlordregister/index.html, that lets good quality local property to Japanese business people and their families while they're based on contract in the UK, has been around for some time. My mother knows a couple of Japanese ladies who came to live in Croydon while their husbands are on business.

I don't know the logistics of how Nippon's scheme works - i.e. whether the landlord leases them the property, and they take care of management, or whether the landlord is directly responsible, but I suspect the requirements for shorter letting in general could be similar or even stricter than letting as an HMO, plus there might be different tax implications to consider.

This is a link to another short term letting agency that explains how their scheme works: http://www.burghleys.com/short-lets-for-landlords.html

Puzzler

15:59 PM, 14th February 2015
About 5 years ago

Reply to the comment left by "Iwona Kowalska" at "15/12/2014 - 13:46":

Hi there, sorry I only just saw this question. Those are the national rules, see the link I posted. I don't know what you mean by "liberal"? I don't know if your council imposes additional ones, I believe some do, especially in London.

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