renting out my flat mortgage company queries?

Werdnal

Don't count your chickens!

General consensus is you should work on 10 month a year rent to allow for voids.

You also need LL insurance as a normal household policy doesn't cover letting.

Gas safety certificate if applicable. You also need an EPC. As previously mentioned, you need to declare income for tax - you can only use mortgage interest as a cost against your rental income for tax purposes.

Mortgage will no doubt increase for CTL, plus any set up charges. You also have a legal obligation to attend to repairs and maintenance at the property quickly - you cannot tell tenants they have to put up with a leaky pipe or no heating because its going to eat into your savings pot!

Just remember there are costs involved too, so don't start seeing the ££££ signs floating before your eyes too quickly.

I would again advise you to read the link for GM's post above. Tenants can often spot newbie LLs a mile off and will walk all over you if you do not know what you are doing.

Firefox1975

Your logic sound

However, you aren't the first person to think of it! (Funnily enough!)

Which is why Mortgage providers also like their slice of the pie from increasing rental income throughout the country,forcing you to move to a BTL mortgage which will have higher payments and different lending criteria.

My immediate suspicion is that they will not allow it. Instead you will have to save £1,600 a month instead of £2,000

(The extra you got from renting would have to be kept safe for any immediate repairs etc anyway so doesn't count - given that a BTL mortgage would be more than £358 a month anyway plus legal costs you wouldn't be much better off)

coudln;t your mum and dad just give you teh extra money you would drain off them by living at home?

agrinnall

I'm not convinced that you have read the post that G_M linked to yet as you still don't appear to be aware of the array of responsibilities and associated costs you will have as a landlord, such as paying tax on the profit from letting, taking out landlord's insurance and paying for a gas safety cerificate, to name just three. If you can live for free with your parents, and your conscience is OK with paying them nothing, then you should be able to save (for instance, you won't be paying council tax any more) but I think in 2 years time you'll find you may not have as much as you hoped. You'll also need to sell the flat then because you won't be able to get a mortgage on a house while you already have one on another property.

G_M

OK - you've had some negative feedback here warning you it might not work.

All true.

But equally, it might work, you probobly will save money, and you'll be able to blow it on the dream wedding.

But please (PLEASE) read up on what is involved. Being a landlord is a serious matter. By all means do it, but make sure yoi know what you are doing, so READ MY LINK

Werdnal

G_M wrote: »

OK - you've had some negative feedback here warning you it might not work.

All true.

But equally, it might work, you probobly will save money, and you'll be able to blow it on the dream wedding.

But please (PLEASE) read up on what is involved. Being a landlord is a serious matter. By all means do it, but make sure yoi know what you are doing, so READ MY LINK

Perhaps not quite so negative GM, but more "old age and experience" putting the brakes on slightly over "youth and enthusiasm" expressed by the OP. I am definately behind anyone wanting to plan for their future and OP's idea is admirable, but as you, I and many others here know, it is not always plain sailing on the letting front. Whilst as we are often accused, we may be painting it badly for the OP's benefit, I am not convinced that they have done the required research into this yet!

BitterAndTwisted

If a person is in negative equity the mortgage-lender will see that a BTL mortgage is a no-go and may step up the interest-rate to something eye-watering. This may make a nonsense of the equation you have just arrived at.

Considering all of the risks and unknowns I cannot for the life of me understand why you can't both live in the property, manage on one salary and bank the other.

Thrugelmir

If you considering holding it as an investment. Then you will need to consider a BTL mortgage in the longer term. Consent to Let is only granted as a short term measure. Increasingly lenders are tightening down and at the very least reverting back to the old term of 3 years for CTL. After this very much considered that you are running a business and not intending to return to the property.

The additional cost of a BTL mortgage may well diminish the return on your investment to the point of it making a loss.

BitterAndTwisted

Making a loss isn't the worst that could happen. Al least you could carry forwards the loss to the next tax-year.

My own feeling is that the OP should live in the property and over-pay the mortgage to extricate themselves from the negative equity asap. No-one wants to start married life with a big, fat, ugly and nasty debt around both necks. Financial matters prove the undoing of more relationships than any other.

iam2103

ok thanks again guys just need to know what is CTl and EPC. i have already registered to be a landlord in Scotland. I have changed my gas and electric to top up metres so the tennent pays for gas and electric as they use it. I have a heating engineer booked for geting gas certificate. I just am not sure about mortgage company and tax. Surely if I am paying all rent onto my mortgage then i aint making no money ao nothing to tax? I have got the smoke detectors checked installed. I have a list to do things but just need more nfo. Not read link as at work. Will do later, as some of you said I will be first time landlord and just looking for your experience and knowlegde thanks again.

agrinnall

It would have been helpful to have mentioned that you're in Scotland right at the start as I expect some of G_M's links relate to English law, for instance there is currently no deposit scheme in Scotland.

You may have changed the meters to prepayment but there is absolutely nothing to stop your tenants arranginging with whichever utility companies they like to change them again to ordinary meters.

You really MUST read up about the tax situation as it is absolutely clear that you don't understand it at the moment. If you have questions once you have read the link then post them but until then you are floundering in the dark I'm afraid.

Edit: Oh, and the good news is that you're much less likely to have a leasehold problem as most Scottish flats are freehold.