You are going to move to Spain. The big question is what to do with your property in the UK? For many, the answer is clear - they sell their home. For others it may be a better option to rent out their UK property while they go to live in the sun. Renting it leaves a bolt-hole to return to and the feeling that you haven’t completely cut your ties with your homeland, plus offers an income.
Renting has implications if you decide to become a Spanish resident, which by law you must do if you spend more than 183 days a year in the country. This is 6 months, so you may only want to rent out your UK home for that period of time if you do not wish to be resident in Spain and therefore pay your taxes in Spain, and if you want to have a home to go back to. Alternatively, you could choose to become a resident, and let out the property for a longer period, but you will have to pay tax to the Spanish Tax Authority on the income you receive from the UK for the rental - and for all other income. As a Spanish resident you will also be required to declare your assets outside Spain, which will include your UK property. Seeking advice from a reputable financial adviser with knowledge of both UK & Spanish law will help you decide which is the better option for you.
Generally British people who rent out their UK home use a local managing agent to take care of finding suitable tenants and the day-to-day problems that crop up. It isn’t easy to be on top of things if you are living in another country unless you have family members or friends in Britain who will help you. Using a managing agent incurs costs as they will take a percentage of the rental income as fees, but this could well be worthwhile as it leaves you free to enjoy life in Spain. All the same, you should keep in regular touch with the agency to make sure that everything is running smoothly.
Renting your home in the UK presents another question, which is what should you do with the income - keep it in Sterling or send it over to Spain? Obviously this depends on what the rental income will be used for. If your Spanish bank account needs topping up, you could send part of the income over to Spain (and therefore convert it into Euro) as a regular payment plan with a currency exchange company, like Smart Currency Exchange, who will offer a better exchange rate and you may find you do not have to pay transfer charges. Some Spanish banks offer bank accounts with no fees, if you pay a minimum regular sum into the account each month, so you should be able to transfer your rental income or part of it at no cost at all. Get in touch with Smart Currency to see how they can help.
Nowadays, tenants expect property to be in tip top condition and to have a good management company to call when there is a problem, so it’s a good idea to walk round your home and imagine you are a potential tenant to see if there is anything that needs tidying up or repainting. Make sure all the appliances are in working order and that the garden is looking good - you can stipulate that it is kept in the same condition during the tenancy. People rent for many reasons, but during their tenancy, they will be wanting a temporary or more permanent home for their family, so to warrant the best rental income your property needs to be attractive and welcoming.
How do you find a good management agency? Look for one which is a member of Association of Residential Letting Agents (ARLA), the National Association of Estate Agents (NAEA) or the Royal Institution of Chartered Surveyors (RICS). These associations require a code of practice from their members. Ask friends if they have used such an agency or know of one with a good reputation. In the first instance offer the property to several agents as they will only charge when they have secured a tenant. Check your contract carefully to make sure you understand what services they are providing. Fees vary between 10% and 15% of the rental price.
This all takes some time to arrange, but if you plan ahead you will be able to move to Spain comfortable in the knowledge that your house is in good hands while you are away and that you have a home to return to should you need to.