Becoming a landlord

buglawton

phill2-0-0-3 wrote: »

I have morgages in place for a buy to let interest only for the property I'm in
And a residential mortgage for my new venture . Building a huge exstention on my parents property that they are gifting to me . Planning approval approved

This part isn't clear to me. Just bear in mind that practically all BTL mortgages state that neither yourself nor your relatives can live in your BTL mortgaged property. Who will be living in the residential mortgaged property and who in the BTL mortgaged one? BTL mortgages a rarely if ever offered for extensions connected to your main house.

need_an_answer

Worth a link to your other thread at this stage...

https://forums.moneysavingexpert.com/discussion/6026184

My advice given as a LL still stands.

becoming a LL wont solve your issues

phill2-0-0-3

Keep_pedalling wrote: »

They may be on board, but I don’t think they or you understand the risks they are taking. What happens to them if you pre decease them, or go bankrupt or get involved in an expensive divorce. What happens if there is a big falling out between you and your parents.

What happens if they ever need residential care? Check out deliberate deprivation of assets.

It's not deliberate deprivation of assets as I'm moving in to care for them as my dad had a fit in the middle of the night luckily I stayed over that nite as my mum couldn't move him into the safety position and just panicked . So I phoned the ambulance and sorted it all .
And I have to keep a eye on my sister as she has had fits and has special needs .
We don't fall out . And they have there own area in the house if we did . I'm not married and never have been . And if I did I would get a prenuptial agreement .
Why would I go bankrupt I have 0 depts and some savings ?

I would like some help with the landlord side of things if anyone has info thanks

phill2-0-0-3

00ec25 wrote: »

if your parents are going to be living there but will no longer be its owners are they aware of the impact that gift will have on their inheritance tax position?

how you split the income and expenditure, and thus the profit, depends on what relation the family member is to you?

(are you writing on a phone or is your spelling really that bad?)

As to the inheritance tax it's £325,000 per person . The house is 300k at present and it's to be split between me and my sister . They don't have a lot of savings or any other houses . So I don't see the issue there ?

And I'm on a older phone . And it keeps changing the words . I don't notice untill the post goes up .

phill2-0-0-3

pramsay13 wrote: »

Assuming you are in England or Wales forum regular G_M has produced a guide for landlords.

You will find it in a sticky thread at the top of the House Buying, Renting & Selling.

Have you been given a realistic rental valuation?

Have you / will you register as a landlord with the local council?

You used mortgages and mortgage companies (plural) when talking about one property, was that deliberate?

Some property management companies will sort the deposit, but it is your responsibility so make sure you check it is done or do it yourself if not.

In simple terms you declare income and expenses once a year on your self-assessment, but there are strict rules on what are allowable expenses so ensure you are clued up on this.

Are you confident it will be financially viable given that you seem to want to include different types of insurance and cover?

Do the insurances pay out when you expect them to or are there terms and conditions that might make things tricky.

You don't get full tax relief on the mortgage interest repayments if you're in the higher rate tax bracket.

Many thanks for your response .

This are the responses I need to no .

Had two quotes for rental of £1000-1100 I will put it up for £1000

Morgage BTL interest only £277 .

Estate agent 0.9% £90

Insurance. £60 ? At a guess

Repairs. £100?

Total £527

£473 profit minus taxes £94 = £379

So that's close to cover the new morgage which is what I am going for .

But obviously I haven't take months into account where the property is empty

I'm a lower tax payer as is the family member £1000 a month income on average each

As to if the insurance will pay out . I won't no untill I'm in that position I guess .

And apologies for my spelling

And we have not registered with the local council as a landlord I didn't realise we needed to do this . Many thanks

Keep_pedalling

phill2-0-0-3 wrote: »

It's not deliberate deprivation of assets as I'm moving in to care for them as my dad had a fit in the middle of the night luckily I stayed over that nite as my mum couldn't move him into the safety position and just panicked . So I phoned the ambulance and sorted it all .
And I have to keep a eye on my sister as she has had fits and has special needs .
We don't fall out . And they have there own area in the house if we did . I'm not married and never have been . And if I did I would get a prenuptial agreement .
Why would I go bankrupt I have 0 depts and some savings ?

I would like some help with the landlord side of things if anyone has info thanks

Sorry but you are wrong. You cannot guarantee that you can always provide any care they need and if that happens this will be treated as DDoA by the LA. Could you care for someone with who turned violent because of dementia, or a bed bound double incontinent parent?

No one knows what lies in store for us, accident or illness could prevent you from working leaving you unable to pay the mortgage. Who cares for them if their main carer is too ill or dies before them? It does not sound like your sister is going to be able to

I know you don’t want to hear this, but for the sake of your parents long term security it needs to be said.

phill2-0-0-3

buglawton wrote: »

This part isn't clear to me. Just bear in mind that practically all BTL mortgages state that neither yourself nor your relatives can live in your BTL mortgaged property. Who will be living in the residential mortgaged property and who in the BTL mortgaged one? BTL mortgages a rarely if ever offered for extensions connected to your main house.

I will be moving out when the BTL morgage goes ahead . I did ask if there was anyway I could stay why the work is being carried out on my parents property but this would be against there t&c.

So I will be moving in with my parents the house will go in mine and my sister's name we will get the residential morgage and my partner will move in with her grandparents why the building work is going ahead .

I have a tiny room at my parents 🤦!♂️ .

phill2-0-0-3

need_an_answer wrote: »

Worth a link to your other thread at this stage...

https://forums.moneysavingexpert.com/discussion/6026184

My advice given as a LL still stands.

becoming a LL wont solve your issues

I'm unsure how it won't solve my issue ?

And yes as I have previously admitted this isn't Ideal and wasn't the route I wanted to take .

But I have been pre approved for both morgages ?

So rent this and build that one ?

I haven't had a viewing for two weeks . And I can't lower the price anymore

The last people that come were really keen loved the house and thought about putting a offer then they decided against it����

So if I was to rent this use the income for the morgage at my parents I can't see any issue . Minus probably any repairs on the BTL .

I'm just hoping it's easier to rent out a house than to sell it .

But as stated I can afford both morgages on my own from my income from work if needed . My variable morgage for the last 4 months is more than both morgages combined .

Ideally I would like to no is there anyway I can get any repairs needed insurance ? Unsure if that's possible

I openly admit I'm not clued up on this . And I would much prefer to sell the house . But I'm not just jumping head first I'm trying to get all the information I can before hand

If possible I would rent on a 2 year morgage BLT. Then in 2 years try and resell after Brexit ect . Then use the equity to pay the morgage at my parents property or the majority .

Cakeguts

I can see a clear disaster ahead here.



1 You have a house that you can't sell because no one wants to pay what you are asking for it. That means that it is in an undesirable area for the town you live. Good tenants don't want to live in undesirable areas either so expect a long line of tenants who a) stop paying the rent,b) damage the property and c) the property is vacant most of the time because you can't attract the kind of tenant you would like.



2 There are some illnesses that older people get that cannot be managed at home by one person and which need either residential care or round the clock care at home. You cannot be caring for an older person 24 hours a day everyday and neither can either of your parents for each other. Either residential care or 24 hour care at home will have to be paid for by you because your parents having given you their home will no longer be able to pay so the Local Authority will bill you. That is what happens in cases of Deprivation of Assets.



My mother had Parkinsons disease so I know what I am talking about in the case of caring for an older person who is getting increasingly unable to do anything for themselves. Some diseases totally disable people.

phill2-0-0-3

Keep_pedalling wrote: »

Sorry but you are wrong. You cannot guarantee that you can always provide any care they need and if that happens this will be treated as DDoA by the LA. Could you care for someone with who turned violent because of dementia, or a bed bound double incontinent parent?

No one knows what lies in store for us, accident or illness could prevent you from working leaving you unable to pay the mortgage. Who cares for them if their main carer is too ill or dies before them? It does not sound like your sister is going to be able to

I know you don’t want to hear this, but for the sake of your parents long term security it needs to be said.

No that's understandable what your saying .

And my dad's side does have dementia runing in the family and he has been angry before I believe due to this .
But he's had tablets for it since and he seems to be a lot better the last few years .
My sister could care for them if needed .
She works she has her own life ect , But she just needs keeping a eye on .

If I was to die .
The house would go to my sister .
I have £300.000 life insurnace aswell .
Also my partner would stay there she's not on the morgage .
But I have it in my will she can stay as long as she pays z amount of rent after a year free period .
She's very caring towards my parents and I no she would help look after them also .

If I was to ill to work I would get some sort of benefits that would help .
But my family member would cover both morgages if needed . I
I was thinking of geting that insurnace that covers ur full salary if unable to work .
My work cover me for the first 6 months of illness anyway as I've worked there for so long .

And when I say care for them .
I do understand at some point they may need to go into residential care god forbid .
But with me closer it will at least mean I am able to help a lot more than I can at present .
Also my children go to the school opposite there house and live in the area .

What would u advice I do ?? How would you move forward with it . I can't reduce the house anymore .