Letting? Your top tips please.

tbs624

It probably would have been better to start a new thread for this ( main HBR&S board, NT button up at top left) but...

The relevant legislation for NI is the Private Tenancies ( Northern Ireland) Order 2006 which you can access online.

The LA works for you not the other way round - it is your property and ultimately how the completion of repairs is effected ( and by whom) is your decision, provided the property is properly maintained in line with your legal repairing obligations.

LAs often like to use "their" tradesmen so that they can earn themselves an extra commission. What, if anything, did you specifically agree with the LA about who would deal with repairs when you signed up with them?

You may also want to have a look on the http://www.nidirect.gov.uk website for info on LL obligations

BitterAndTwisted

Even if you have a full repairing agreement with the agent you are fully entitled to commission any repairs yourself. Remember what the term "agent" denotes: the agent is your slave and hand-maiden not the other way around. If your builder is trusted and reliable I would go along with their opinion rather than some shyster agent who's only concern is earning a mark-up from their cosy relationship with the building firms they instruct. A building firm which they may even own an interest in.

tbs624

BitterAndTwisted wrote: »

Even if you have a full repairing agreement with the agent you are fully entitled to commission any repairs yourself.

I agree - the reason I asked "What, if anything, did you specifically agree with the LA about who would deal with repairs when you signed up with them?" was because clearly the LL needs to make sure that the LA knows(via formal instruction) how the LL wishes to proceed and also needs to ensure that the "piggy in the middle" T knows who to contact to get repairs dealt with promptly.:)

BitterAndTwisted

To prevent the agent going ahead and instructing the building firm anyway, and charging the landlord for the privilege I would be minded to WRITE to the agent now. Something along the lines of: "In this instance we intend to instruct our own building firm to carry out whatever it might be, even if it's just an inspection to discover what may or may not be required. Consequently we do not require the services of the company you may normally choose to instruct and do not accept liability for any fees incurred associated with such a visit" This should make them sit up and take notice that you are not to be messed with.

sandsni

tbs624 wrote: »

It probably would have been better to start a new thread for this ( main HBR&S board, NT button up at top left) but...

The relevant legislation for NI is the Private Tenancies ( Northern Ireland) Order 2006 which you can access online.

The LA works for you not the other way round - it is your property and ultimately how the completion of repairs is effected ( and by whom) is your decision, provided the property is properly maintained in line with your legal repairing obligations.

LAs often like to use "their" tradesmen so that they can earn themselves an extra commission. What, if anything, did you specifically agree with the LA about who would deal with repairs when you signed up with them?

You may also want to have a look on the http://www.nidirect.gov.uk website for info on LL obligations

Thanks for the advice about starting a new thread - I was afraid to in case I was duplicating but I'll keep it in mind for the next time.

We provided the LA with names and telephone numbers for our builder and plumber (with their permission) with the understanding that they would be given "first refusal" on any work required (neither of them has a huge workforce so we were aware that they might not want to take on bigger jobs). The names and numbers were written into the paperwork (by me) where the LA had a place on the form for such contacts but we didn't get anything explicit in writing from the LA. I've requested a copy of the signed agreement between my parents (the LLs) and the LA as I realised yesterday they hadn't ever sent us a copy for our own records. This is our first time using a letting agent and I thought we had done our homework but I'm realising now that we should have got absolutely everything explicitly in writing. Even phone calls are being misquoted WITHIN the agency, never mind the tenant!

sandsni

BitterAndTwisted wrote: »

Even if you have a full repairing agreement with the agent you are fully entitled to commission any repairs yourself. Remember what the term "agent" denotes: the agent is your slave and hand-maiden not the other way around. If your builder is trusted and reliable I would go along with their opinion rather than some shyster agent who's only concern is earning a mark-up from their cosy relationship with the building firms they instruct. A building firm which they may even own an interest in.

As it happens, the guy who came from the LA with the "background in the building trade" worked for his family firm, which is what made me a bit dubious in the first place. When I asked him directly about his experience or qualifications he made a sweeping statement about doing "bits of everything around the sites". I just wanted to clarify for myself that it was reasonable for us to expect a similar level of expertise in their assessors as we know we have with our own tradesmen.

BitterAndTwisted

One would be being quite reasonable in expecting the agent to appoint someone competent. But that's not always how they work. Well, if they ever do. Most especially with new and inexperienced landlords who they can rob blind if there's an opportunity. What you choose to do now could set the tone for your future relationship.

Be clear. Be firm and PUT EVERYTHING IN WRITING! No phone calls, no emails, no text-messages: proper, formal letters sent by post and keep a copy for future reference always.

milton19700

Looking for advice & wondering if anyone can answer / clarify a few points. Not currently acting as a landlord but looking at buying property to let to boost returns on savings & take advantage of what I perceive to be low property values & potential high rental yields.

Appreciate that it can be fraught with potential issues - if it was easy everyone would do it ! Right ?

So this is really to get some advice & look at the option - read the posts above & OK with getting a business plan together & some of the risks - my questions relate to personal tax situation (appreciate that in depth advice should be sought from adviser! but any steer would be helpful.

So my situation :

I pay tax at the higher rate (40%), I have c. £100K available to invest & the rate on my existing property (my home) is 0.83% (Base Tracker with base plus 0.33%)

If I choose to buy a property for rental I don't want to be giving 40% of any profit to HMRC!

So options ...

Understand that for tax purposes I can offset interest costs (plus other costs incurred) against rental income but given that the aim was to utilise savings ..

Is there any merit in setting up a company (Milton Property Rental Ltd [MPR Ltd]) & buying the property via that company ? Could I then make a directors loan to that company (from my savings) to enable the purchase ? Assuming that a company will then allow me to potentially minimise personal tax - through dividends if I choose to take them but apart from Corporation Tax payable at 20% & potentially Cap Gains (with taper relief if I choose to sell later) what other taxes do I need to consider ?

Would the mortgage rate available be higher if through a company ?

The assumption in this model is that I maximise the BtoL mortgage loan - to enable offset against revenue income. But is there an option to charge the company MPR Ltd at a market interest rate but use my savings ? i.e. Directors loan at 5%

Am I overcomplicating things ?

Thoughts & advice please

Fire_Fox

milton19700 wrote: »

Looking for advice & wondering if anyone can answer / clarify a few points. Not currently acting as a landlord but looking at buying property to let to boost returns on savings & take advantage of what I perceive to be low property values & potential high rental yields.

Appreciate that it can be fraught with potential issues - if it was easy everyone would do it ! Right ?

So this is really to get some advice & look at the option - read the posts above & OK with getting a business plan together & some of the risks - my questions relate to personal tax situation (appreciate that in depth advice should be sought from adviser! but any steer would be helpful.

So my situation :

I pay tax at the higher rate (40%), I have c. £100K available to invest & the rate on my existing property (my home) is 0.83% (Base Tracker with base plus 0.33%)

If I choose to buy a property for rental I don't want to be giving 40% of any profit to HMRC!

So options ...

Understand that for tax purposes I can offset interest costs (plus other costs incurred) against rental income but given that the aim was to utilise savings ..

Is there any merit in setting up a company (Milton Property Rental Ltd [MPR Ltd]) & buying the property via that company ? Could I then make a directors loan to that company (from my savings) to enable the purchase ? Assuming that a company will then allow me to potentially minimise personal tax - through dividends if I choose to take them but apart from Corporation Tax payable at 20% & potentially Cap Gains (with taper relief if I choose to sell later) what other taxes do I need to consider ?

Would the mortgage rate available be higher if through a company ?

The assumption in this model is that I maximise the BtoL mortgage loan - to enable offset against revenue income. But is there an option to charge the company MPR Ltd at a market interest rate but use my savings ? i.e. Directors loan at 5%

Am I overcomplicating things ?

Thoughts & advice please

We only deal with taxation as part of 'House Buying, Renting & Selling', few if any here are qualified tax accountants and business taxation is certainly not in the remit of this board. Run an advanced search on this board and on the 'Cutting Tax' one
http://forums.moneysavingexpert.com/forumdisplay.php?f=22

Also read the detailed guidance that HMRC have put together
http://www.hmrc.gov.uk/incometax/index.htm
http://www.hmrc.gov.uk/manuals/pimmanual/
http://www.hmrc.gov.uk/manuals/bimmanual/

milton19700

Apologies - was simply asking the landlord community on here whether there is any merit in managing through a company. Hadn't seen that on the original (very helpful post).

Read through some of the HMRC information & (as usual) the HMRC are deliberately vague in the grey areas.

Appreciate that not tax experts on here but would have thought understanding (& minimising) taxation is important factor in being a successful landlord - that & happy, considerate tenants.

Will open a new thread but had viewed it as a valid addition to this thread - hadn't realised there were any rules on MSE - understood it was an open forum to share ideas ?