Becoming a landlord for the first time

Marvel1

Mickey666 said:

“It’s all a bit daunting . . . I don’t have a clue . . . I don’t plan to use an agent”
I would say those first two points are entirely understandable but the last point is going to be a big problem.  As pointed out above, there is a lot of regulation and requirements around letting a property and for around 8% of the rent I’d say paying an agent will be the best decision you could make.  They’ll handle everything for you, you won’t have the tenant ringing you up with every little problem that needs fixing, the necessary certificates will be handled automatically, etc etc.  Really - use an agent, it will buy you so much peace of mind and let you concentrate on running your life rather than running the tenancy.

However ensure you know the rules, not simply use the agent and do nothing.

Example being, I the tenant pays agent the depoist, agent does not protect the depoist.  I leave and discover deposit was not protected.  I am not coming after the agent for the depoist penatly, it will be you the landlord. 

IAMIAM

Why would the tenant pay the 20% tax and not knowing whether it is correct or not as they do not know the landlords status or income. Seems bizarre even though I have now read it is correct. Surely they could not pay HMRC and scarper too.

csgohan4

greatcrested said:

Someone ought to make those two posts stickies....

Someone did and they got banned/ PPR anyways and redacted all the links to the articles. Clearly MSE don't appreciate the knowledge people have or time they spend

Even tea and cakes are not enough

Comms69

IAMIAM said:

Why would the tenant pay the 20% tax and not knowing whether it is correct or not as they do not know the landlords status or income. Seems bizarre even though I have now read it is correct. Surely they could not pay HMRC and scarper too.

The logic is that people sometimes buy property here to let out, and dont pay their tax

Crashy_Time

SamanthaFoster said:

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 

Sounds like a recipe for disaster in this economic environment to me TBH.

[Deleted User]

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?

Are you the OP @SamanthaFoster or are you a completely different poster piggybacking the thread with your own set of circumstances? 

greatcrested

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.

unless the rent is paid to a UK agent (or someone in the UK acting as your agent eg your brother). They then have to withold the tax on your behalf. It's to ensure there is someone in the UK (tenant or agent) who HMRC can chase if tax is unpaid.......

See

HMRC (Non Resident [= overseas] Landlord Scheme)

Slithery

Mickey666 said:

Well yes, obviously it would be wise to use a reputable agent, but I see little point in a new landlord learning about all the letting rules and then paying an agent who should already know them.  Would you suggest learning everything about house conveyancing before appointing a solicitor to act on your behalf?

What makes you think that agents know all of the relevant laws? There are zero qualifications needed to become a letting agent, in fact I'd say the the regular posters on this forum are much more knowledgeable and up to date with current legislation.

As a landlord running a residential lettings business you remain fully liable, for example if you employ an agent and they fail to protect the deposit it's still you that will be taken to court...

[Deleted User]

Mickey666 said:

Marvel1 said:

Mickey666 said:

“It’s all a bit daunting . . . I don’t have a clue . . . I don’t plan to use an agent”
I would say those first two points are entirely understandable but the last point is going to be a big problem.  As pointed out above, there is a lot of regulation and requirements around letting a property and for around 8% of the rent I’d say paying an agent will be the best decision you could make.  They’ll handle everything for you, you won’t have the tenant ringing you up with every little problem that needs fixing, the necessary certificates will be handled automatically, etc etc.  Really - use an agent, it will buy you so much peace of mind and let you concentrate on running your life rather than running the tenancy.

However ensure you know the rules, not simply use the agent and do nothing.

Example being, I the tenant pays agent the depoist, agent does not protect the depoist.  I leave and discover deposit was not protected.  I am not coming after the agent for the depoist penatly, it will be you the landlord. 

Well yes, obviously it would be wise to use a reputable agent, but I see little point in a new landlord learning about all the letting rules and then paying an agent who should already know them.  Would you suggest learning everything about house conveyancing before appointing a solicitor to act on your behalf?

You’re comparing apples with oranges. Solicitors require academic and professional qualifications. They need to a member of a professional body in order to practice law. What training and qualifications do letting agents require? 

Comms69

Mickey666 said:

Marvel1 said:

Mickey666 said:

“It’s all a bit daunting . . . I don’t have a clue . . . I don’t plan to use an agent”
I would say those first two points are entirely understandable but the last point is going to be a big problem.  As pointed out above, there is a lot of regulation and requirements around letting a property and for around 8% of the rent I’d say paying an agent will be the best decision you could make.  They’ll handle everything for you, you won’t have the tenant ringing you up with every little problem that needs fixing, the necessary certificates will be handled automatically, etc etc.  Really - use an agent, it will buy you so much peace of mind and let you concentrate on running your life rather than running the tenancy.

However ensure you know the rules, not simply use the agent and do nothing.

Example being, I the tenant pays agent the depoist, agent does not protect the depoist.  I leave and discover deposit was not protected.  I am not coming after the agent for the depoist penatly, it will be you the landlord. 

Well yes, obviously it would be wise to use a reputable agent, but I see little point in a new landlord learning about all the letting rules and then paying an agent who should already know them.  Would you suggest learning everything about house conveyancing before appointing a solicitor to act on your behalf?

Solicitors are a regulated industry with indemnity supported by the SRA. Letting agents are for the most part more ignorant than the average poster here.