How to let out a House with 4 Bedrooms to 4 Sharers

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    How to let out a House with 4 Bedrooms to 4 Sharers

    I've got a house with 4 double bedrooms, one of which is an ensuite.

    What's best way to rent it out to 4 people (either 4 students or 4 professionals)? I don't need to get any license I've checked as long as it's let out to maximum 4 people.

    I was thinking to let it out room by room and generate about £2500 including bills but I have questions regarding:

    1) Contract
    My lender requires me to have only one contract with AST but I was going to sign a separate contract with each of the sharers specifying which room they are renting.

    So should I have one contract then get each sharers sign the page relevant to each room with its price? e.g. Room1: £600, etc.

    Or the contract has one price for the whole house like £2500 then specifying broken down figures for each room?

    Is there any ready template I can use?

    2)
    What if one of them leaves in the middle of contract? should all again sign a new contract when a new tenant for the room is found? or only the new tenant signing a page of the contract?

    3)
    Is it better to put my own name in the contract as a person who lives there and add the 4 room sharers as lodgers? to protect myself in case one refuses to leave and requires enforcement.

    I live somewhere else in practice though.

    Any complications?

    4) Payment
    How should the payments be arranged? like they pay their shares on 25th of each month? Should they be paying someone else each then that person pays me the whole rent as one go or should I arrange to get the rents for individual rooms one by one?

    Like by opening a new bank account that they pay into that account e.g. 500 + 600 + 800 + ...
    then from that account pay to the main mortgage account the whole amount for the month? e.g. £2500

    5)
    Should they be let bills included or excluded?

    The advantage of bills included is that they don't fight over bill with each other! but the disadvantage is that the may use too much electricity so I better put a limit allowance on electricity.

    6)
    How can I ask/arrange for guarantor if they fail to pay? any template?

    I'd really appreciate your advice.

    Many thanks,

    #2
    I have a 4 bed student house and let it on a single AST. If I let it room by room I would be responsible for the Council tax whereas the students are normally exempt if they have a single AST.

    Comment


      #3
      OP where is the property>

      Thease are Letting 101 Qs, join RLA/NLA and complete their distance learning modules.
      Property sounds more suitable for 1 family, both jointly-liable adults in full time employment and a min joint gross income of say £50-60K rather thn ind students.

      Comment


        #4
        While you don't need a licence, that would be an HMO and most of the HMO regulations would apply whether it's licensed or not.
        I'd suggest that a "normal" 4 bedroom house would need some modification to be acceptable as an HMO.

        You also need to check that HMOs are allowed in the neighbourhood, there are planning regulations that are also relevant.

        1 There's no right answer to this. You can do this either way, you're trading off the ease of replacing individual tenants with the security of everyone being bound by a single agreement (but the entire agreement needs redoing each time someone leaves). If you rent the rooms individually, you can repossess a room rather than the whole property, but you have to collect rent from several individual people. If you let the rooms separately, you have to pay the council tax. While the money that can be made from this kind of renting can seem appealing, it is much more complex and demanding than renting a property to a family or couple. You earn the money.

        2 See above.

        3 That would be a bad idea. Where you live is a matter of fact, and the agreement would be an AST (not a lodger agreement) whatever your documentation says.

        4 If someone collects the rent from others, there's a risk that they would become a landlord themselves, and be your only tenant. That happens when the formal arrangements slip into informality and people start being "replaced" for convenience.

        5 Up to you, it probably depends on what your local competition do.

        6 Guarantors are a waste of time in my experience (unless you're renting to students).

        Why not use an agency for all of this?
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment

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