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Old 27.05.2015, 23:45
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Tips on renting out flat in England (relocating to Zurich)

Hello,

I am relocating to Zurich in September and wanted to see if anyone had any advice on renting out their property in England (and becoming a 'non-resident' Landlord). From my current research, going via a letting agent seems to be very costly - especially if they are managing the property too.

I will be leaving my London flat and hopefully renting to a friend. What are the benefits of using a Letting agent, any advice on the taxation? Or, any thoughts on the process in general?

Would be grateful for any advice!

Many thanks,
Emma
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Old 28.05.2015, 00:03
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Re: Tips on renting out flat in England (relocating to Zurich)

I use an agent simply to find a tenant for me. The guy does nothing else. If you can get a tenant yourself, then you could save having to pay the agent.
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Old 29.05.2015, 16:18
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Re: Tips on renting out flat in England (relocating to Zurich)

Lots of pitfalls on this one. First the UK tax authorities make bandits look like helpful samaritans. You need to make sure that you have the correct exit forms signed sealed and delivered. (Notice of being abroad, registration as an expatriate landlord to start with)

Second. You need to have an agent on full maintenance retainer, this is now a requirement of the infernal revenue. Pick a good one since agents can be very ropy. I was unlucky with the first and lucky with the second. Expect to pay a contract fee and 15-20%.

Third Depends how long you plan to be abroad. If it is longer than 5 years, it is probably better to sell, especially whilst property and the £ is on an uptick against the CHF.

Fourth. Get a proper currency account. Many on this forum will say otherwise, but I use SwissQuote. You can transfer money from CHF to GBP with ease and much closer to the cross rate than a regular account as well as transmit to the UK easily. You will need to do this since rentals in the UK are not reaching the levels of mortgage and maintenance costs. Post Finance is also good.

Finally, get an accountant. You will need one in the UK able to deal with the pests in HMRC as well as one familiar with the rules in Switzerland.

Good Luck!
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Old 29.05.2015, 20:42
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Re: Tips on renting out flat in England (relocating to Zurich)

Thank you so much to you both for your advice!

I am predicting it won't be the easiest of experiences but hopefully will get there.

Have a nice weekend
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Old 31.05.2015, 22:02
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Re: Tips on renting out flat in England (relocating to Zurich)

I had similar questions when I moved over from London 18 months ago. I got 3 options when I asked a local agent (Earlsfield near Clapham):
1. Let only (~7%) - basically find you tenant & sort contract
2. +collection (~10%) - I think this is if there are problems, they will write letters, etc but I don't think
3. Fully managed (~13%) - covers maintenance

In the end, I had friends & family nearby so ruled out fully managed as they could help & decided that 3% was quite a lot to write letters if & when tenants defaulted so just went with the let only. But if you have a friend taking it then I would looking into paying the legal stuff, inventory, deposit, etc as a fixed fee rather than paying 7% per month to do nothing.

In terms of tax, fill out a NRL1 for non-resident landlords to receive rental income without deduction of tax - it is better you pay the tax to HMRC rather than your tenant & you will have to fill out a tax return anyway. You can also deduct 10% for wear and tear and any letting fees which will bring tax liability down. I think you should get the 10k personal allowance, although I know the government are looking into this for non-residents.

One other thing to call out is that there is Swiss (worldwide) wealth tax on your assets - some people choose not to declare, I did declare & believe it has a small impact so I wouldn't worry about this.

Hope this helps - I remember all the questions & confusion when I did the move
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Old 31.05.2015, 22:10
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Re: Tips on renting out flat in England (relocating to Zurich)

I would also recommend you take out
Landlords Insurance
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Old 31.05.2015, 23:21
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Re: Tips on renting out flat in England (relocating to Zurich)

You'll also need an EPC before it can be let and if there are gas appliances, it'll need a gas safe certificate annually.

The services you need from a letting agent will depend on whether you have reliable friends or family who can help when there are problems.

It's not very difficult to keep a property in the UK, just needs some organisation skills.

Unless I was sure never to return, I would never want to sell up in the UK.
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Old 31.05.2015, 23:42
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Re: Tips on renting out flat in England (relocating to Zurich)

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I will be leaving my London flat and hopefully renting to a friend.
Renting to friends or family would be my last resort. If I did, I would treat the transaction no differently to one with a complete stranger.

Proper tenancy agreement, check-in, inventory, tenancy deposit etc.

Also, don't forget to check that your mortgage provider, (if you have one) will permit you to rent the house. You can ask them for an in-principle decision in writing before you decide.
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Old 31.05.2015, 23:49
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Re: Tips on renting out flat in England (relocating to Zurich)

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Renting to friends or family would be my last resort. If I did, I would treat the transaction no differently to one with a complete stranger.

Proper tenancy agreement, check-in, inventory, tenancy deposit etc.

Also, don't forget to check that your mortgage provider, (if you have one) will permit you to rent the house. You can ask them for an in-principle decision in writing before you decide.
Or not as the case may be. I know that my bank did not have a BTL license so could not have converted the mortgage. Don't ask, don't tell and we were both happy.
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Old 01.06.2015, 19:11
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Re: Tips on renting out flat in England (relocating to Zurich)

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I had similar questions when I moved over from London 18 months ago. I got 3 options when I asked a local agent (Earlsfield near Clapham):
1. Let only (~7%) - basically find you tenant & sort contract
2. +collection (~10%) - I think this is if there are problems, they will write letters, etc but I don't think
3. Fully managed (~13%) - covers maintenance
They should also deal with eviction and court processing as part of the service. It happened to me. Since it is the YUK you will have no chance enforcing the debt order, but at least you will get your property back after 3 months or so.

Quote:

In the end, I had friends & family nearby so ruled out fully managed as they could help & decided that 3% was quite a lot to write letters if & when tenants defaulted so just went with the let only. But if you have a friend taking it then I would looking into paying the legal stuff, inventory, deposit, etc as a fixed fee rather than paying 7% per month to do nothing.
it is amazing how quickly friends and relatives become uninterested in helping you out. In the long run I think it is better to hire a professional

Quote:

In terms of tax, fill out a NRL1 for non-resident landlords to receive rental income without deduction of tax - it is better you pay the tax to HMRC rather than your tenant & you will have to fill out a tax return anyway. You can also deduct 10% for wear and tear and any letting fees which will bring tax liability down. I think you should get the 10k personal allowance, although I know the government are looking into this for non-residents.

One other thing to call out is that there is Swiss (worldwide) wealth tax on your assets - some people choose not to declare, I did declare & believe it has a small impact so I wouldn't worry about this.
Like I say get an accountant. A UK one should be about 500 notes to prepare the statements properly and a Swiss one c. CHF500 so long as you do not have other complicated affairs. It pays to get it right.

Incidently As my memory serves HMRC are getting increasingly twitchy about offshore private landlords and are insisting on them using an accountant and a letting agent. The local authorities are doing the same for the latter. If there is a problem they want feet on ground and not in another country.

Hope this helps.
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Old 01.06.2015, 19:25
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Go through a property management company (estate agents) yes you pay more, but that can be negotiated, and they will always be the ones to sort out problems when they arise and quickly. Also you can claim back a bit on the expense in your income taxes. I even list my flights back to the UK. The down side is if you need something major doing like something new installed, then its best to be there to make sure the jobs done proper, like... And if your renters are strangers, they do the credit checks and make sure that payment reminders are sent out, they deal with all the legal work too. (of course for 15 quid you can buy the rental agreement from WH Smiths and do it all yourself).

Other things are EPC and annual Gas/boiler checks, a legionella certificate is now also a legal requirement, smoke and carbon monoxide detectors and rent indemnity insurance would be good to have, along with appliance insurance because when a fridge goes kaput or the wash machine dies at least you are covered.

You also have to declare the value of your asset over here for wealth insurance, if you plan to live here any length of time.

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Like I say get an accountant. A UK one should be about 500 notes to prepare the statements properly and a Swiss one c. CHF500 so long as you do not have other complicated affairs. It pays to get it right.
Mine only costs me 200 notes a year he's great.

Last edited by 3Wishes; 01.06.2015 at 21:22. Reason: merging consecutive replies
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Old 01.06.2015, 21:02
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Re: Tips on renting out flat in England (relocating to Zurich)

I let a house fully managed (15%). The change to a permission to let mortgage cost £1000 but they put that on the mortgage. Landlords insurence is slightly less than homeowners. I have no accountant, my letting agency sent me a form so that they had no liability if I didn't pay tax (or they would take it off directly) and I fill in my tax decleration myself, first year I got a rebate (because I had worked in the UK for 6 months and had overpaid my PAYE) next year I paid one months rent and last year I was told I was eligable for the tax free allowence so owed nothing and got my money back for the last year (the HMRC woman said that might change) Now I have let for over three years I think I am eligble for capital gains if I sell, but at the minute if you are abroad for more than 5 years you don't have to... (Again, they might change that). I personally want to keep my house because I don't know if I will move back to the UK and I know I will never be able to get back on the UK housing ladder if I get off.
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