1st time btl needs advice

rent_and_buy

Ive got the agent in place, sorted british gas full homecare with gas certificate and buildings insurance.

I want to make it self efficient so i can just leave it in the letting agents hands and just forget about it.

btl mortgage all sorted now, but have i missed anything else?

poppysarah

A tenant?

Landlord insurance?
Membership of landlord association?
Good references for letting agency.

rent_and_buy

poppysarah wrote: »

A tenant?

Landlord insurance?
Membership of landlord association?
Good references for letting agency.

the letting agency said they would sort the membership for the landlord association, ive been in touch with 2.

the other one wanted a fee up front of 300 pound and then 10% of the rent.

One said they charge either 3 weeks rent for finding a tennant and you manage it youself or they will manage it for us for 10% of the rent.

ive heard about references, but i would like to do a bit of backround checks on the tennants myself as well.

I have been advised by someone that you can for a few pound you can find out a load about potential tennants history by the electoral roll.

oh and of course i need a tennant.:eek:

cheers sarah

poppysarah

Interviewing tenants in their current home gives you a really good idea of how they treat that place and how they'll treat yours. However as background checks go it's probably a bit invasive.
References off their last landlord should in theory be useful.

rent_and_buy

my mate has been doing it a few years and he told me people go on about tennants, but it works both ways, has if they mess the previous landlord about, they will always find it hard to get another rental property.

infact ive got a mate who has ccj's and his rent his really high, has he cant rent from agents has he can not get refferences.


Its a 3 bed semi so it should attract people who have been renting before.


So hopefully the tennants will be okay, but you never know, i could have nightmare tennants.

2912pwil

The reference of the current Landlord is not worth much if the current Landlord wants shot of them (I speak from experience...) you really want the reference from the Landlord before the current one.

EPC?? Think that's a legal requirement now (but then the agent will have told you that).

I sincerely hope you have funds stashed away to cover (say) 10 months no rent if the tenant turns out to be the "tenant from hell" variety...

Is you agent offerring rental insurance with the referencing?? I was speaking to 3 agents in essex last month (MiL house) and all 3 offerred that - probably worth the premium (hundrfed quid? can't recall in detail) if this is your first time...

Good luck! (To you AND to the tenants,...)

SouthCoast

Have you registered your business with HMR&C?

rent_and_buy

i dont think we will be making that much infact it will be less than 100 pound a month, but will be taking 55000 pound out of it for a deposit for our new house.

Its between me and the missus so it will be less than 50 pound each a month, i dont think we will get taxed much on that, but i will declare it.

socrates

rent_and_buy wrote: »

i dont think we will be making that much infact it will be less than 100 pound a month, but will be taking 55000 pound out of it for a deposit for our new house.

Its between me and the missus so it will be less than 50 pound each a month, i dont think we will get taxed much on that, but i will declare it.

The profit is not the difference between the mortgage and your rent. Its much more complicated than that. Try LandLordzone.com for even more information.

m_13

rent_and_buy wrote: »

i dont think we will be making that much infact it will be less than 100 pound a month, but will be taking 55000 pound out of it for a deposit for our new house.

Its between me and the missus so it will be less than 50 pound each a month, i dont think we will get taxed much on that, but i will declare it.

I think you need to get some tax advice. The house you are letting out has a 'capital account' which cannot become overdrawn and withdrawing funds from it for a new personal private residence may cause you problems. This means that whilst it possible to take £55,000 out to put a deposit on a new home this may have an impact on whether or not the mortgage interest on your BTL mortgage is allowable against the income.

Take a look at this post on the www.taxationweb.co.uk property tax forum. If you did not make a declaration on your BTL mortgage application similar to the examples given then you may find yourself unable to claim interest relief. If this were the case then more of the income you receive from the rental less the expenses of letting will be treated as profit.

For example, if the rent is £400 and the mortgage is £300 consisting of £150 interest and £150 capital repayment then normally you would be able to claim interest relief of £150 against the rent making your profit £250. From that you can also claim costs of letting such as agents fees, buildings insurance etc. If you are joint tenants then this will automatically be split 50/50 between you and your partner. If the tax man decides that you are unable to claim relief on the percentage of the mortgage that paid the £55,000 for your new personal private residence - say in this example £100 of the interest - then your profit has just jumped up to £350 per month.

I strongly suggest you take good taxation advice. Have you considered, for example, that for capital gains tax and general taxation it might be better to hold the property as tenants in common with different shares? If you and your partner are in different tax bands then it could be sensible for the person paying lower tax to hold a higher share of the property.

There's a lot to consider here.

rent_and_buy

Had the agent come round today said he would get a tennant more or less straight away, but told me before he markets the house, we need to find somewhere to move asap.

got landlords insurance and buildings insurance from simple
rent gaurantee from ensleigh
homcare from british gas with service and certificate yearly
got epc

got agent who said they would join us up to the landlords association, just need to find somwehere to move to, is there anything i have missed??