What to Do with Rent?

Miss_Poohs

I lost both my parents over the last few years and having bought out my sisters share of the property (she lives abroad and didnt want the house) I am currently renting it out.

Its rented out through an agency and the current rental period is due to finish at the end of this month.

My question is I stupidly put the rent I received into my current account and its gradually been frittered away.

I'm considering opening a separate account for the purpose of rent collection.

I want to be better organised the next time - so those of you who rent out property what do you do with the rent?

Miss P

SuperBOB

Buy things

Miss_Poohs

So I've done well up tae now then LOL!!!

Thats my trouble I don't want to waste it all, and believe me I will - I'll separate the rent from our other money the next time I think.

BitterAndTwisted

Put it in a deposit account which has a decent amount of notice required to access it. You're going to need a reserve fund for maintenance and repairs once you've paid tax on the income.

Blobby8_2

You could pay down debt. Or put some aside for tax.

G_M

What do you do with your salary?

This is not a property question - it's a philosophical one!

Or a question about lifestyle choices.

Or savings/pensions/investment planning......

Werdnal

I keep my rental income in a separate acount. I use it to pay all the costs of my let to keep it nice and tidy should the tax man ever need proof of anything, and the rest I use to treat myself to the occasional meal out etc. To be honest, I don't make a lot, as it subsides my part-time income so doesn't tend to build up too quickly.

If you are getting surplus rent, you could buy premium bonds, or open a higher interest account to earn a bit more from your money.

edinburgher

You could pay down debt

Your sig seems to suggest you have some debt, so this might be a good idea for you

Blobby8_2

edinburgher wrote: »

Your sig seems to suggest you have some debt, so this might be a good idea for you

But what fun would that be ?

I love history, especially posters history.

princeofpounds

Make sure you are up to date on all your legal obligations as a landlord (deposit protection, gas safety etc). As a novice landlord you are NOT safe to rely on agents to do this.

Make sure you are declaring the income and paying the right tax.

With that out of the way, what you do with the money is largely dependent on your own personal goals. You can just spend the income, or you can invest it if you wish to defer that income to raise even larger amounts in future time periods.

If your immediate real spending needs are covered by other income sources then it is a good idea to segregate the money. You will want to judge the time horizon and risk tolerance you have. There are all sorts of things you could invest in but if it's for any length of time don't bother with cash!

You could put money in equities, bonds, other property (but as you own one rental I wouldn't suggest putting all your eggs in the property basket), inflation-linked NS&I certificates etc.

GDB2222

The highest return you can make on the money, without taking silly risks, is to pay off your debt, starting with the ones with the highest interest rates and working down.