basic help need with BTL

Dan_1976

GG I have just realised what you mean.

I apologise if I offended you. I am just growing a little tired of people taking apart opinions of those just trying to help. Your not the worse, but highlighting cutting and pasting to belittle other peoples posts in not very nice. (I am not saying you have done all of these).

Its becoming more and more common in here and I must admit I do put my defence up and bite.

My comments became to personal and for that I hold my hands up and apologise, If I could I would buy you a drink so I have posted one. I obvioulsy woke up on the wrong side of bed that day!

Daniel

:beer:

Thrugelmir

costingbunny wrote: »

Thanks for all the advice although, tbh, I am more confused than ever. Folk are talking about my borrowing on the BTL mortgage although I am not getting one of these??
As for falling out with my partner etc, we have our home in joint names and have been together for 11 years - the idea was to put the flat in his name as he is a lower tax payer. The legalities of this do not bother me re: falling out etc as I have provisions for this as I work for a solicitor's practice.

I think I will seek advice from some other people once I have some figures from my mortgage company re: borrowing against the house. No offence, but there seems to be more bickering between posters here than straightfoward simple advice!:D

If you have an interest in the transaction in any form, then you will be liable to part of the tax liability. Hence my comment. As yes you can protect your interest but not without incurring a liability.

The reason that the advice appears confusing is that BTL is a business. Its not a hobby. It can be extremely profitable or at the other extreme you will have the tenants from hell.

Take some time out to read other posts on this forum, to guage whether BTL is for you.

getmore4less

costingbunny wrote: »

Thanks for all the advice although, tbh, I am more confused than ever. Folk are talking about my borrowing on the BTL mortgage although I am not getting one of these??
As for falling out with my partner etc, we have our home in joint names and have been together for 11 years - the idea was to put the flat in his name as he is a lower tax payer. The legalities of this do not bother me re: falling out etc as I have provisions for this as I work for a solicitor's practice.

I think I will seek advice from some other people once I have some figures from my mortgage company re: borrowing against the house. No offence, but there seems to be more bickering between posters here than straightfoward simple advice!:D

Try answering the simple question

How much gross rent will this £75k place get.

<£350pm forget it.
>£650 check your costs but probably OK

In between you will struggle to make money unless you have costs under tight control.

costingbunny_2

getmore4less wrote: »

Try answering the simple question

How much gross rent will this £75k place get.

<£350pm forget it.
>£650 check your costs but probably OK

In between you will struggle to make money unless you have costs under tight control.

gross rent about £420 but I am only borrowing about £50K. Would be nice to get £650 per month for a £75K 1 bed flat!! My basis for this venture is to make some money in the long term - 10 years plus. If the rent covers the mortgage (which is will) plus a little surplus left over for the extras I would be happy as it means to effectively looks after itself (yes, I know things happen etc etc....) and I can sell in 10+ yrs time and have a profit. Does this sound OK?

stylus360

I am in same boat as orig poster but but need to borrow about £50 for £70k house.
i Have £160k equity in existing property and about £30k tied up in savings/shares.

My mortage is fully paid off but they have left £1 for existing borrowing, i am planning on saying it's for new car/kitchen/gym/etc.

I will be paying slightly higher rate than BTL but totally flexible/overpayable so hopefully pay it off in couple years.

I too am confused about the tax implications and now there MUST be ways of offsetting/reducing this.
I am a lower rate taxpayer.

Are there any sites out there for landlords ?

Cheers

phlash

You should not enter the BTL market, relying on long term capital gains to be your profit source, that is not a business venture it is a gamble on future economic output. i.e. You are hoping for inflation which will drag the property price with it.

You should be seeking to set up a rental business, which turns over a healthy profit level. Any capital growth in 10 years will be a bonus. This is the mistake of many amateur BTL Landlords, and one that has got many into trouble.

Look up the definition of "real and nominal" prices. This will give you some appreciation for the possibility that just because you make a nominal profit on an asset, it does not mean you will make a real profit.

Now, I do think BTL is a great venture, if entered into correctly. For that, you should be super informed and you should seek to make healthy profits on the rental business itself.

phlash

stylus360 wrote: »

I am in same boat as orig poster but but need to borrow about £50 for £70k house.
i Have £160k equity in existing property and about £30k tied up in savings/shares.

My mortage is fully paid off but they have left £1 for existing borrowing, i am planning on saying it's for new car/kitchen/gym/etc.

I will be paying slightly higher rate than BTL but totally flexible/overpayable so hopefully pay it off in couple years.

I too am confused about the tax implications and now there MUST be ways of offsetting/reducing this.
I am a lower rate taxpayer.

Are there any sites out there for landlords ?

Cheers

Loads. Google is a much better search tool than a post on a internet forum. Tbh, it appears very lazy, and I should imagine most people like myself are reluctant to be forthcoming.

If you had done some research and then come back asking for opinions on various sites and things you had read then people will willingly help out. But as is, your query is far too generic.

Landlordzone
landlordexpert
landlordadvice
landlordlaw
landlord-forum
residentiallandlord
lettingzone
singingpig
HMRC website
....

costingbunny_2

I am not sure why putting money into property to act as a pension (i do have a 'proper' pension as well) is wrong? Why does it have to have a big profit margin on the rent/loan? and how is this possible generally anyway - if someone gets a BTL mortgage on a £120K house the rent is not going to be double the repayments?
Phlash - can you let me know how you started out with your first BTL so I can try and get my head round it? Thanks

phlash

I'm not saying its wrong.

Any business is set up on the principle that it aims to turn over a profit.

Buying a house and renting it out is a lettings business. The way it makes a return is by the rent exceeding expenses and turning over a profit, something that you can control to a large extent. To do this, the business buys an asset which it can rent out. Therefore any gain on this asset in the long term is a bonus, but it is not the core activity of a lettings business.

The business model commonly employed by amateur Landlords is to buy a property and hope it rises in value in order to make 'profit' whilst forgetting about the rental part. This is not a certain outcome (although the trend is your friend in this case) and therefore to rely on it alone is a gamble on house price growth exceeding inflation.

My first BTL was bought in November last year, but I get the impression you think I'm a seasoned Landlord. I am not, but I have spent a long time ensuring my research and knowledge of the legals, tax and business plan is built on solid foundations. I learnt from watching others enter into it lightly and somewhat blindly, and come out wishing they had never done it.

I believe you owe it to the tenants to whom you are renting to be well informed, they are paying you to live in a house they will call home. Landlords sometimes forget this, and only see it as their investment. This oversight can lead to difficult relationships, more time and stress and less profit.

BTL is not a pension scheme and should never be viewed as such, it is a business and should be run as professionally as any other service that you would normally require. You wouldn't expect to walk into a high street hair dressers and then have your hair cut by somebody with no experience, the same principle applies here, you have to train yourself.

phlash

BTW...The rent on my BTL is more than double the repayments. So yes it is possible.

Research!