Basic steps to becoming a LL

jls1981

We have made the decision to let out our property. We have consent to let from our lender so it's all systems go.

We have decided to let the house to a family friend (yes I already know all the reasons you shouldn't mix business and family etc so i am not after a lecture here). This family friend is in receipt of housing benefit. We are renting the house to her for less than what we would do if it were a stranger because, quite frankly, we are not desperate for the extra money (in rent income) and are quite happy so long as the mortgage is covered and a bit of money is getting put to one side to cover if anything should go wrong / need fixing within the house. We also have savings.

So basically what I would really like to know is the basics of Landlording. I know I need to get a tenancy agreement signed up etc and also that I need to have the relevant gas safety certificated checks done. Other than that what else do I need to know?

Thanks in advance!

G_M

New Landlords (information for new or prospective landlords)

Also check that both yourmortgage lender, and the LLs insurer you choose, do not prohibit letting to benfits claimants.

Mojisola

It's worth joining this site, too - https://www.landlordzone.co.uk/

Lovelyjoolz

Firstly, is the property mortgaged? If yes, has your lender given you permission to rent it out?

Is the property leasehold? Do you have permission to rent it out?

Have you informed HMRC? You need to declare all rental income (minus allowable expenses) and pay tax on the profit.

Have you got an EPC?

Are you a member of a Landlord organisation?

HAve you arranged Landlord insurance?

Have you arranged to protect the deposit in a recognised DPS?

Are you aware of the legislation you need to follow? Are you aware of your rights and those of your tenants?

Read the following post by G_M:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

It's an excellent place to start.

Remember, being a Landlord is a business and needs to be treated as such.

Fire_Fox

Read G_M's excellent post and then join a landlord's association.

Annisele

jls1981 wrote: »

This family friend is in receipt of housing benefit. We are renting the house to her for less than what we would do if it were a stranger

This bit concerns me. Is the "less" a little bit less or a lot less? If it's a lot less, you risk the benefit people deciding yours is a "contrived tenancy" - briefly, one set up to take advantage of HB - and your friend might lose their benefit.

The rules on contrived tenancies are complicated, and you could well be absolutely fine - but better to check first!

Notmyrealname

jls1981 wrote: »

We have made the decision to let out our property. We have consent to let from our lender so it's all systems go.

We have decided to let the house to a family friend (yes I already know all the reasons you shouldn't mix business and family etc so i am not after a lecture here). This family friend is in receipt of housing benefit. We are renting the house to her for less than what we would do if it were a stranger because, quite frankly, we are not desperate for the extra money (in rent income) and are quite happy so long as the mortgage is covered and a bit of money is getting put to one side to cover if anything should go wrong / need fixing within the house. We also have savings.

Oh dear. If you have a repayment mortgage that only the mortgage interest is tax deductible so you would pay tax on the capital repayment portion as though it were income. So it would probably cost you money to rent it out if you're only charging a little over the monthly mortgage payment. You would effectively be paying for your friend to rent your house from you from your income/savings.

My brother lets a house out he has on a repayment mortgage and the rental income is about £50 a month more than the mortgage payments. Every year he gets a tax bill which swallows up that £600 and he has to meet the outstanding out of his wages.