As with pretty much everything in life, there are of course pros and cons to this. You need to remember that your UK property will not be there for you to go back to whenever you wish, whilst it is being rented. If you are planning to go back to the UK regularly, you really need to do your sums and add up whether the cost of staying with friends/B&B/hotel when you go back “home” is going to be offset by the amount of rent you receive by renting out your place!
Looking long term though and from an investment point of view, renting your UK property may well be the best option and you can always have a 6 month break clause in your contract, that allows you to rethink every few months and see if it is still working for you.
Many people rent out on a semi informal basis, without employing the services of a property company to whom you will undoubtedly have to pay at least 10% of your rental income. If you do decide to do it on your own, you still need to draw up a contract setting out the landlord’s (you) and the tenant’s (them) obligations and make sure your tenant understands this. You can find simple forms on line that will help you to draw up your contract – it does not need to be hugely complicated or wordy. For better peace of mind, have it looked over by a solicitor so that if anything does go wrong you have some come back.
Going it on your own means you will have to take time to make sure the property is properly maintained and deal with repairs and any problems which crop up. If, for example, the boiler goes wrong or a window gets broken, who would you call on to have these things dealt with whilst you are sunbathing in the South of France?! Ideally, you should have a back up of a few expert trades who will be able to deal with problems in your absence.
So, hiring a rental company to look after your property may pay dividends if you are not always going to be around. They will collect the rent for you, see to regular maintenance and also find you new tenants when the time comes. Make sure you take steps to ensure you are dealing with a competent rental company, and that you are getting a good deal: fees do vary. It’s a good idea to check references and find out what other properties the rental company manages, and even talk to the owners if possible. Ask about their weekend service: will someone be on call if there is an emergency on a Saturday or a Sunday? What about evenings? Check the contract carefully before you sign.
Whether you choose to manage your property yourself or hire a rental company, get your calculator out and compare the rent you will be getting with your costs (leaving some aside for contingency and emergency repairs). You need to think long term: maybe at first there will not be a great deal of profit but think about the future and the fact that most properties’ values do appreciate. You are also adding to the capital value by simply keeping the property, although obviously general wear and tear need to be taken into consideration.
Rental income is taxable and you will need to add it to your tax return. However, there may be some tax breaks by renting out your property and you are best to take legal advice on this. Obviously your income will be in sterling which has recently got a lot stronger against the euro so it is likely to make sense to keep your money in sterling – or at least some of it. You can, of course, set up a regular amount to be sent over to you in France by using Smart Currency Exchange who offer a fantastic service and who will obtain for you the very best rate possible. You can of course also ask them to let you know when the pound reaches a certain good rate – and then arrange to send over a lump sum to your euro account.
Rental income is a good way to earn money without doing very much – just make sure you do your homework regarding your tenants and safeguarding your property.