No idea if this will work..will it??

notlongnow_2

Thanks. It was us who suggested the £300 rent as we are not out for every penny we can get. This couple are in financial difficulties and need somewhere else to live and we have a house they can live in for a while.

As long as the rent covers the secured loan and then a little left over for emergencies then we are happy.

I will try to do as much of the cosmetic work as possible. I dont for the life of me know how to tile a floor..lol. We have the tiles though so maybe we could find a friend who could. The painting isnt a problem.

So its looking more likely to be able to work.

Who do I declare the income too??

Premier_2

notlongnow wrote: »

...As long as the rent covers the secured loan and then a little left over for emergencies then we are happy....

Why?

How much capital do you have tied up in the property? How much could this earn elsewhere? The rent should cover the capital employed, all the costs involved in letting out the property (not just the interest on the money borrowed) & hopefully a bit of profit to boot.

Else it's a business that sounds doomed from the start.

notlongnow wrote: »

...Who do I declare the income too??

Your accountant.

Your apparent lack of business understanding means he would more than pay for himself

barnaby-bear

notlongnow wrote: »

I will try to do as much of the cosmetic work as possible. I dont for the life of me know how to tile a floor..lol. We have the tiles though so maybe we could find a friend who could. The painting isnt a problem.

to be honest if tiling a floor (a pretty easy DiY task) or even finding someone to do it (a non-regulated, general trade task) is a bit difficult I really would be wary of becoming a LL. When the toilet starts leaking on christmas eve it's you who has to sort it, when the roof leaks and you are on holiday you have to have the skills and contacts to sort it out....

notlongnow_2

Premier wrote: »

Why?

How much capital do you have tied up in the property? How much could this earn elsewhere? The rent should cover the capital employed, all the costs involved in letting out the property (not just the interest on the money borrowed) & hopefully a bit of profit to boot.

Else it's a business that sounds doomed from the start.


Your accountant.

Your apparent lack of business understanding means he would more than pay for himself

We would be happy to accept £300 because we are not out to get every last penny from a couple who have found them unable to afford their rental increase (its increased by £200). We want to do a couple a favour. We would rather rent to someone we know until the time comes to sell it than it just be left empty.

If we charged £300per month rent then we would have £110 left over after paying the loan on the house. This would be put to one side for things such as insurance and emergencies, and if/when this couple would still be there in 18months then we would have £300 to put towards insurance and emergencies and a little left over.

You are completely right about my lack of business understanding...lol. Thats why I asked for help from here. But renting a house out to a middle aged couple whom we know is hardly Richard Branson standards..lol, and so I think I must be able to make a go of it.

Thanks for the help, it really is very helpful .

notlongnow_2

barnaby-bear wrote: »

to be honest if tiling a floor (a pretty easy DiY task) or even finding someone to do it (a non-regulated, general trade task) is a bit difficult I really would be wary of becoming a LL. When the toilet starts leaking on christmas eve it's you who has to sort it, when the roof leaks and you are on holiday you have to have the skills and contacts to sort it out....

I wouldnt be able to tile a floor..no way..lol.

They are stone tiles approx 1ft square. I wouldnt have the first clue about how to cut one, and im sure that for every lucky one I cut there would be plenty more wrong ones. The floor isnt level either so id have to level it.

I can turn my hand to many other things (Laminate, real wood floors, decorating, flat pack assembling, unblocking things etc)but wouldnt be confident enough to tackle this. Im a 32 yr old female and dont think I do badly with the things that I can do around the house.

I think people are thinking that im thinking this will be some easy get rich quick scheme. Its not and thats not what we want. We would like to not have a empty house whilst the housing market is rubbish, and by coincedence this couple need somewhere to live, so as long as the loan is paid then we are ok with that. Im no big businesswoman and have no desire to be..lol. I just want to make sure we do it right.

Thankyou very much for your help.

Kynthia

You could get an agency to manage the property even though you have selected the tenants. It means you would pay the agency less as you wouldn't be paying them to find a tenant. I think some agencies charge 6% of the annual rent to find a tenant and do the checks, 5% to manage and 2% to collect the rent each month.

They would charge a percentage of the rent just to manage. They have contacts so they can arrange the EPC and Gas Safety Certificate for you. Also when something goes wrong, the tenants contact the agency, then if you want they can call out an electritian, plumber, etc.

You need to keep records of all your income and costs for the taxman for 6 years plus current financial year. You need inform HMRC that you are receiving rental income as you will need to pay tax on it. If you rent this financial year (2008/9) you will need to complete a paper tax return by 31st October 09 or online by January 2010. There is good information about rental income on www.direct.gov.uk

You need to make enough in rent to cover costs, tax, running costs, emergencies, etc.

Good luck :-)

Ladybird20

you need to be aware of the tenent deposit scheme.Portable appliance testing and you need the certificates for it, the energy certificate(EPC),,plus you will have the expense of your accountant,,,,,its not an easy way to make money, i have been renting for nearly 10 yrs now and believe me you are at their beck and call, they have you over a barrel for almost anything and i have heard on the grapevine that us landlords may soon be responsible for making sure that they have provision to recieve digital tv!!!!!!!!!!!!!!

franklee

notlongnow, I can see your heart is in the right place but that isn't good enough to be a landlord. Really for that you do need a business head. I see you are trying to do this couple a favour but that's bound to come to grief if you don't realise what you are getting into. You will have responsibilities as a landlord that you would be foolhardy to renege on. Therefore you need a decent income to cover these costs. You also need to comply with the law, some of the more obvious points having been mentioned above I hope you will take the advice given, of which I'd say your first step is to either engage an agent or join a landlord's association.

zaksmum

notlongnow wrote: »

Now thats more like what I was thinking. The couple(middle aged) who want OH's house are both working and have lived in their current house for 8yrs (not DSS)so I know they arent complete muppets. Im sure references wont be a problem. We toyed with the idea of an initial 6month lease and if it wasnt working then they leave and we sell.

The gas system was serviced less than a year ago and is less than 2 years old. It has smoke alarms, carbon monoxide alarms but there is no door on the attic staircase leading to the attic room so I suppose its classed as 2 bed not three??

Thanks, you have been very helpful.

Although the gas safety check was done less than a year ago, you still need to get a new one done annually.

As far as declaring the rental goes, if you are not working, you have your own tax allowance of about £100 per week...your rental of £300 a month falls below this so if you have no other income, the rent should be payable to you and would not be taxable.

The form you'd need is an ASSURED SHORTHOLD TENANCY AGREEMENT and has to be for a minimum of 6 months lease on the house.

If there are 3 actual bedrooms, door doesn't matter, then it's classed as 3 bed, not 2.

zaksmum

And by the way, I wouldn't bother with an agency. They are usually totally hopeless.