Becoming a landlord for the first time

I’ve had two house sales fall through and I don’t want to miss out on the house I’m buying. My long term plan was to buy somewhere cheap to rent out so I’ve decided to rent out my house that I’m currently struggling to sell. I’ve put a lot into the house and it is in good repair. I’m releasing some equity to cover the new deposit and leaving in my original deposit. (15%) it is all a bit daunting for me and I haven’t a clue where to start. I’m just looking for tips for what I need to get/do to begin with. Things like insurance, gas safety, contracts, tax etc. I’m not planning on using an agency. Thanks 
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  • Comms69Comms69 Forumite
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    So you dont have a BTL mortgage. Will your lender allow you Consent to Let? 
    Assuming you manage to get that. Presume that you will receive zero rent.
    Can you afford it?
    If not, the answer is to sell at a cheaper price
  • AdrianCAdrianC Forumite
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    I’ve had two house sales fall through and I don’t want to miss out on the house I’m buying. My long term plan was to buy somewhere cheap to rent out so I’ve decided to rent out my house that I’m currently struggling to sell. I’ve put a lot into the house and it is in good repair. I’m releasing some equity to cover the new deposit and leaving in my original deposit. (15%) it is all a bit daunting for me and I haven’t a clue where to start. I’m just looking for tips for what I need to get/do to begin with. Things like insurance, gas safety, contracts, tax etc. I’m not planning on using an agency. Thanks 
    So you mean you'll be looking at 85% LtV? You won't get a BtL mortgage at that level. Will your existing lender give you CtL?

    What sort of raw yield are you looking at? What have you allowed for expenditure, voids, bad debts, maintenance costs? How long before your net post-tax income even covers the +3% SDLT on your new purchase?

    Are you capable of severing your emotional attachment to the property, stopping viewing it as "my house", and starting viewing it as "an asset of my lettings business"?
  • IAMIAMIAMIAM Forumite
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    This is great, exactly what I was looking for. What are the tax implications if working abroad for 2 years.
    My mortgage is roughly 75% LTV and CTL has been given for 2 years with HSBC.
    If the mortgage payment is £400 and the rental income is £800 with a 10% fee for a letting agent.
    Do I pay tax or not, or will my personal allowance cover this?
  • Comms69Comms69 Forumite
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    IAMIAM said:
    This is great, exactly what I was looking for. What are the tax implications if working abroad for 2 years.
    My mortgage is roughly 75% LTV and CTL has been given for 2 years with HSBC.
    If the mortgage payment is £400 and the rental income is £800 with a 10% fee for a letting agent.
    Do I pay tax or not, or will my personal allowance cover this?
    Depends on where you're working re tax implications. Domestically, as long as all is above board you would be just under the personal allowance. 

    Obviously expenses which are deductible dont include the full mortgage payment - in fact there were quite a few changes recently (with-in 12 months) so definitely worth checking. 

    What happens in 2 years time though? 
  • edited 13 April 2020 at 1:08PM
    SlitherySlithery Forumite
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    edited 13 April 2020 at 1:08PM
    IAMIAM said:
    This is great, exactly what I was looking for. What are the tax implications if working abroad for 2 years.
    My mortgage is roughly 75% LTV and CTL has been given for 2 years with HSBC.
    If the mortgage payment is £400 and the rental income is £800 with a 10% fee for a letting agent.
    Do I pay tax or not, or will my personal allowance cover this?
    As an NRL (non-resident landlord) then unless you get written permission from HMRC the tenant is legally obliged to hold back 20% of the rental amount and pay it directly to HMRC on your behalf.
  • IAMIAMIAMIAM Forumite
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    Thanks. I will potentially return or may sell or may move to BTL mortgage.
    It's a move with work, UAE/Asia. But I will not be resident in the UK and earning local currency.
    So I still get a full tax allowance if living abroad and earning elsewhere then, so the tax implications will not really hit me, if I am reading this right. 
  • Comms69Comms69 Forumite
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    Slithery said:
    IAMIAM said:
    This is great, exactly what I was looking for. What are the tax implications if working abroad for 2 years.
    My mortgage is roughly 75% LTV and CTL has been given for 2 years with HSBC.
    If the mortgage payment is £400 and the rental income is £800 with a 10% fee for a letting agent.
    Do I pay tax or not, or will my personal allowance cover this?
    As an NRL (non-resident landlord) then unless you get written permission from HMRC the tenant is legally obliged to hold back 20% of the rental amount and pay it directly to HMRC on your behalf.
    It's kind of 'permission', really it's just registering with HMRC. It's a rubber stamp process and you get a reference number.

    IAMIAM said:
    Thanks. I will potentially return or may sell or may move to BTL mortgage.
    It's a move with work, UAE/Asia. But I will not be resident in the UK and earning local currency.
    So I still get a full tax allowance if living abroad and earning elsewhere then, so the tax implications will not really hit me, if I am reading this right. 

    I dont know the tax implications in the country where you'll be working. They may consider income gained here as taxable income there
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