So, you want to go travelling for an extended period of time, but you have a mortgage to pay? Same! Don’t worry we got you!
After the first lockdown, Dan and I were in the position to buy our first home, which was a huge life goal for both of us. In September 2020 we got the keys, and we were so happy. After about 4 months of pretty major renovations and two more lockdowns, we were finally settled and able to start saving our money for another huge life goal we both had…. to take time off work to go travelling for 6 months.
Now you might be confused as to why we did it that way around and the answer is quite simple, buying a house is really hard! After the first lockdown we had a lot of savings, house prices were low and stamp duty was gone! We could not miss that opportunity!
So, what are we going to do about our mortgage when we are away?
For us personally, we are renting our home out to a tenant for the period we are away. This made the most sense to us, however it isn’t the only option. So, what can you do to cover your mortgage whilst you are away?
(I would just like to add that this article is based on our own experiences and the research we have done, I am in no way a professional when it comes to this stuff. I am writing this on the 13th of May 2022 and legislation changes all the time, so please do your own research, or get professional guidance before making any decisions.)
Leave your house empty
We unfortunately weren’t in the position to have enough savings to leave our house empty and just continue to pay the rent ourselves. If this is something you can do, then I would be inclined to say that this is the easiest and safest option. However, you really need to make sure that you get empty house insurance, invest in security cameras, and maybe ask friends or family to check in or even stay in your home every now and then. Empty homes can often be easy targets for burglars and squatters, so take all the precautions you can.
Short term rentals
As mentioned above we have decided to go down the short-term rental route, so that our mortgage is covered whilst we are away, but we get to move back into our home when we return. Short term rentals are a popular choice for those who want to go travelling for that very reason.
Get permission to rent
The very first thing you need to do if you are wanting to rent your house out for a short-term rental, is seek permission from your mortgage provider. You will need to contact them to speak to an advisor and ask for a consent to lease or change your mortgage to a buy to let rate. Without either of these you do not have the right to rent your home out and your mortgage provider can take legal action against you, which could ultimately result in them repossessing your home. Not an ideal situation if you ask me!
Once you have received written permission from your mortgage provider you can start listing your home on rental sites. We choose to do it all ourselves so that we didn’t pay any agent fees, but there are some advantages to having an agent do all this work for you, which we talk about later in this blog. We used sites like Spare Room and Open Rent to put up our listing for free.
Do your research
If you aren’t using an agent during this rental process, you will need to do some research to see how much you should be charging monthly for rent. Try finding properties that are similar to yours in the area and see how much they are charging. Make sure you are completely truthful in your property description and include as many up-to-date images as possible. You don’t want to waste your time showing people around if they don’t have the full details, as they are most likely not going to be interested. You will need to mention in the description how long this property can be rented for. We did up to 8 months, even though we were only going to be gone for 6 months. This is because we knew it might broaden the pool of those looking for short term rentals and we luckily had family we could stay at if needed for the extra two months.
Host viewings
Once you have posted your listing, you should start getting messages from people who are interested in renting your property. Make sure you are replying to these people quickly and in a polite and professional manner. Start inviting people to viewings. Before they arrive, ensure that you clean your house, as it will be more appealing to them and there will be more of a chance that they will want to live there.
Ask for a holding deposit and do tenant checks
If someone has told you they want to rent your property and you have agreed the price and length of time, then you can now ask them for a holding deposit. This can be the amount of one week’s rent and will help make sure that the tenant won’t back out before they sign the contract. Once that has been paid you can start doing your tenant checks. Sites like Open Rent and Spare Room offer these services for a small fee. You can also use an independent company to do this for you by doing some research on the internet. Doing these checks is very important. Not only does it allow you to ensure that your tenant is legally allowed to rent your house and is able to afford the rent, but also is a necessity for most landlord insurance.
Get your insurance, write your contract, and sort your inventory
Once you have received the results from your checks and are happy to go ahead with the tenancy, it would be a good idea to think about getting your landlord insurance. Price comparison sites such as Compare the Market or Money Supermarket can help you see what options are best for you.
At this stage you need to also create your tenancy agreement for both the tenant and you to sign. We used a template online to help us create this. You can also pay an agent to help you out with this.
Once the tenant has signed the contract, you have agreed the move in date, and your insurance is in place you can start moving your stuff out of the home. We were lucky enough to be able to move our possessions to our families houses as we were leaving our furniture for the tenant. There are plenty of storage options available if this isn’t something you are able to do, such as Big Yellow Storage and SafeStore.
Once all your possessions are out of the home you can get the inventory sorted. If you are doing it yourself, you need to ensure you take a lot of photographs and include anything you are leaving in the property, so that they know to leave it there when they move out. You can also pay a company to do this for you if you want a more thorough job.
Ensure they pay the deposit and protect this
Before the tenant moves in, they must pay a deposit. The deposit must be no more than 5 weeks of rent. Once they have paid the deposit you have 30 days to pay it into a protected deposit scheme.
Hand them the keys
Once the deposit is paid, they have signed the inventory and you have shown them around the property on their move in day, you can hand them the keys and be on your way. Make sure you give them your best contact details, so they know how to contact you if something to stops working or if they have any questions throughout their tenancy.
Airbnb
Some people choose to put their house up on Airbnb instead of doing a short-term rental, due to higher ROI opportunities, but also because it is sometimes quite hard to get someone in who just wants to rent for the time they want to travel for.
There are companies that you can pay to run your Airbnb for you whilst you are away, so they can deal with the check in and check out process.
Should I get an agent or not?
Renting your house out can be a daunting task, so getting in a little bit of help might be a good idea. There are many advantages and disadvantages for getting an agent. We personally decided to do it all ourselves for various reasons.
Advantages
The biggest advantages of having an agent help you are that it is a massive time saver for you and that you know everything will be done correctly, so that you are complying with both the law and your insurance.
Agents can help find suited tenants for you and also do the tenant checks on them. Some agents will offer tenant check ins as part of their package, which means the will go around the house during the tenancy a couple of times to check if there has been any damage to the home and that they are complying to their tenancy agreement. This will give you peace of mind that your home is safe whilst you are away and unable to get to it.
Another advantage is that they will deal with any tenant requests. For example, if something is broken in the property, most agents will sort out getting it fixed, once they have sought your approval. This means whist you are away you won’t have to spend time trying to find handy men and arrange they go around to the property.
Finally, agents will deal with the checkout process, including going through the inventory and looking after the deposit process. This means when you want to move back into the property it will all be sorted for you.
Disadvantages
There is really only one disadvantage in my eyes, but this was enough for us to choose to not use an agent and that is the fees they charge. It can be quite expensive to use an agent for this process with most agents charging between 10-20% of the monthly rent. If you want a more in-depth service, it could be even higher. This for us was too much, considering we wanted to use every last bit of savings we had to travel the world.
We are also lucky that our tenants decided to pay all the money for the entire time they are living there up front, which meant we didn’t need to worry about rent arrears. We also have family and friends nearby and as Dan is a plumber, he has links to trades people that we would trust helping us out if something went wrong whilst we are away.
If you don’t want to do the whole process yourself, or you are worried that you won’t be able to sort out issues whilst you are abroad, then it is highly recommended that you use an agent.
Without A Paddle Travel 