renting out my flat mortgage company queries?

BitterAndTwisted

iam2103 wrote: »

I have changed my gas and electric to top up metres so the tennent pays for gas and electric as they use it.

You have just done the one major thing to make your property as unattractive to a prospective tenant as it is possible to do. I would never, ever rent a property with pre-payment meters! How dare a landlord decide for me what tariff I will be on.


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 and nothing to tax?

You obviously have no clear idea of how rental-income is treated by the tax authorities. Your monthly mortgage-payments have nothing to do with the rental-income. You can only offset the MORTGAGE-INTEREST against the rent for tax purposes.

You appear to be putting the cart before the horse. The plan is risky. I think you're in danger of making the most terrible and expensive mistakes.

And now you're on a pre-payment meter and paying through the nose for your own utilities. I think that's what could be known as a "own goal"

Werdnal

OP I think you'd best just read the link when you get home.

You are taking the rent as income, what you choose to do with it, in this case pay it towards your mortgage, are of not relevance to the HMRC - they want to know what income you are making. Only Mortgage interest is allowed to be paid from the rent, so if you are paying interest and capital, you cannot use the capital as an allowable expense on the income you make.

There are a lot of other things you need to know and comply with too, come back when you have read the info as you will no doubt have further questions.

I agree with the prepayment meters too - many tenants will run a mile from them. You only need put the bills into the tenant's names and they will then become responsible for paying them (and utilities will chase them for the debt if they don't).

Perhaps a little more research is wise before you go any further, otherwise your plan to save thousands will be scuppered before you start. The rules covering tenancies and housing laws are very stringent, and extremely punitive in monetary terms for landlords who get it wrong. You have been warned!

PS - Now you have explained you are in Scotland, a few of the items in GM's post may be irrelevant, but I will leave it to someone versed in Scottish Housing law to confirm the differences, as I am no expert.

iam2103

thanks for all the replies much appreciated. After reading through them and reading the links etc and speaking to a few people over the weekend I am now thinking that I should just cut my loses and put my flat up for sale. As I will need a new mortgage for a house end of next year and someone said I cant have two mortgages so would have to get rid of flat anyway. Also The hassle that could end up happening with tennants and the cost. I would be happy to sell flat and get price I paid for it and cut my loses. What do people think? Thanks.

Firefox1975

Do it.

What value is it worth? whats the postcode?

kingstreet

iam2103 wrote: »

someone said I cant have two mortgages

Someone's talking twaddle. You can have as many mortgages as you can afford. Some lenders would be happy to provide you with a mortgage for a residential purchase if you have a self-funding let in the background.

iam2103

thats what i thought about having more than one mortgage but someone said earlier in the thread that it would not be possible.