Buy to let - should I open a bank account for this

jellynose

Hi Everyone

All being well I am hoping to rent out my current house when I move into a new home.

In a bid to keep everything separate and for budgeting purposes etc, would I be best to open up a new bank account for the purpose of the rental house.

I know that this seems a really obvious question but I am new to this and I don't even know if you can hold more than one bank account.

Thanks

TheCyclingProgrammer

Of course you can open more than one bank account.

Keeping money in two separate accounts is one basic way of budgeting but you could just as easily use a spreadsheet or piece of budgeting software (I recommend YNAB) to track your income/expenses whilst keeping the money in the same physical account.

AdrianC

Having a bank account "just for the rental" is not enough documentation for tax purposes, so you'd need to keep accounts anyway.

kinger101

It's not essential, but it would help with keeping track of income and expenditure when you come to prepare tax returns etc.

xylophone

http://www.adviceguide.org.uk/england/housing_e/housing_renting_a_home_e/information_for_landlords.htm

https://www.gov.uk/browse/housing-local-services/landlords

If mortgaged, do you have consent to let?

What about insurance?

I would certainly have a separate bank account for what is in effect a business.

Make sure that you understand the tax aspects.
https://www.gov.uk/renting-out-a-property/landlord-responsibilities

LandyAndy

Open a new account. Running a business through your personal account will make things much more complicated and expensive for your accountant to sort out.

kinger101

^^^^^
If you use an accountant, a separate account is definitively needed. You don't want to be paying them for combing through bank statements. You'll be lucky to even find one willing to do this.

theGrinch

having a dedicated bank account will help any accountant you engage and save you time & money

gfplux

Keeping proper records will help you reduce the tax you will pay.

googler

It'll have to be a business account, the banks don't like folk using personal accounts for business.

fishpond

"In a bid to keep everything separate and for budgeting purposes etc, would I be best to open up a new bank account for the purpose of the rental house"

Yes, makes your life a whole lot easier.