Advice about tax deductible costs for landlord please

[Deleted User]

Halle71 wrote: »

Yes we might be in the 40% tax bracket but this does not mean we are loaded

it frequently seems that people forget that living pay cheque to pay cheque is not good, and think that people that manage to live without debt are somehow rich, when the reality is even those earning £100,000 per year are not in a position to buy a new jag every year and live in a mansion... money does not go very far, especially if you wish to be responsible and ensure a good retirement. Just because a large number of people suffer on minimum wage it does not mean those paying 40% taxes are rich.

Halle71 wrote: »

We are soon to be amateur landlords as we are in the process of buying our first buy to let property.

Halle71 wrote: »

We're also letting the house to friends for a long period and have reduced the rent accordingly.

For the sake of your own sanity and the sake of this forum members sanity, become professional landlords before you even consider letting this house out, let alone to friends. Being a landlord means running a business, treating yourself as if you're an amateur is a very bad idea, you need to believe that this is a serious business... because it is, there can be serious impacts on your finances if you do things wrong as a landlord. If you don't protect the deposit... there goes thousands of pounds, if you don't understand how eviction works... there goes thousands of pounds.

If you're going to let to friends it becomes even more important you know exactly how things work because (no matter how good they are as friends) things can go wrong and it may become you vs. them and if you've not done it properly (which is more likely when you're letting to friends) you're in for a world of hurt.

Join a landlords association as your number one priority and prepare to spend a lot of hours researching.

dimbo61

You need to start this BUSINESS on the right path by employing the right people in the first place.
You are not buying without a solicitor? or Having a survey done with a RICS surveyor? The lender will want proof of income, savings/deposit and a Business Plan!
Please employ an accountant who deals in BTL and renting.
His/her costs is also an allowable expense from your rental income.
If the Double glazed window frames are in good condition you may only need to replace sealed units ( less cost)
As others have already pointed out you are better off spending the money before letting on repairs/replacement/renewal before you first rent! as the costs can be used to offset any profit you make for some time.

Halle71

'Amateur' was really meant to be a bit tongue in cheek - we do realise that we either are or aren't landlords and yes, we are joining a landlord's association (RLA unless anyone has any recommendation) and a tenancy deposit scheme, as well as taking a lot of advice from my parents who have managed BTLs themselves and for my brother for several years.

Also 'friend' is a bit of an exaggeration - an acquaintance I have met through baby groups and her husband, who currently rent locally and are looking for somewhere bigger. The wife is starting a funded phd so they want a property for the duration, she will pay the rent six monthly from her funding and we will do the relevant credit checks and references as per usual. We made the calculated risk that, while we will get less monthly income, the alternative in our area for a four bed house is medical students or groups of Poles and this way we get a lot less wear and tear on the property.

I have no doubt we will make mistakes along the way but we are trying our best to avoid them.

And yes, we live comfortably but definitely not luxuriously and are working hard to improve our lifestyle and provide for our families future.

Halle71

dimbo61 wrote: »

You need to start this BUSINESS on the right path by employing the right people in the first place.
You are not buying without a solicitor? or Having a survey done with a RICS surveyor? The lender will want proof of income, savings/deposit and a Business Plan!
Please employ an accountant who deals in BTL and renting.
His/her costs is also an allowable expense from your rental income.
If the Double glazed window frames are in good condition you may only need to replace sealed units ( less cost)
As others have already pointed out you are better off spending the money before letting on repairs/replacement/renewal before you first rent! as the costs can be used to offset any profit you make for some time.

We do have a solicitor.
We have a BTL mortgage offer from Abbey.
We have had a full building survey done by an accredited surveyor.

No accountant but have a retired Dad with much experience in these matters

00ec25

Halle71 wrote: »

Definitely not tongue in cheek. Surely your reply is though? Is this forum only for people earning under the 40% tax threshold?
I was asking for advice not charity.

Your reply was unnecessary and bitter.

yes it is tongue in cheek hence the emticons - I gave you the advice you needed. You were the ones to unnecessarily mention your tax bracket Your posting was ambiguous since you linked the ability to afford the repairs to your tax bracket and appeared to whinge about how little this left, hence my footnote about how to handle losses

PS not bitter. I am in exactly the same relative position as you, but my business plan allowed for the costs and how the income stream would flow from the property year by year

it is good you are joining the RLA , its a great pity many of the new LL on here do not share your ability to recognise a learning curve and the support available to help climb it

Halle71

It wasn't whinging - we are not doing this for monthly income but long term investment. I had just received the survey and, as is often the case, it was a bit worrying, hence my question.
I only mentioned my tax bracket because it increases the value if any tax break significantly, apologies if this was inflammatory.


While we do have savings we can use for repairs we ideally wouldn't if we can use any profit from the house income.

Thanks for your advice.

H