First Time 'Buy To Let' Buyer - Advice Appreciated

RGT501

I'm looking into buying a buy to let for the first time. I haven't purchased a property since 1995 so am slightly confused about the Buyer's Packs that were first discussed back in 2004. While all auction properties I've looked at come with a very comprehensive buyer's pack, conventional estate agent properties do not seem to come with a Buyer's Pack beyond the EPC rating. Am I right in assuming that I should make an offer on a property subject to carrying out a solicitor's search and a surveyor's survey regarding structural problems, mining search, mundic etc?

I am intending to finance the buy to let with savings, my son will be contributing around 20% to the cost of the purchase. Assuming he outlives myself and my wife, my son will inherit the property, (the combined value of our main property and the buy to let will be well under the inheritance tax threshold). As my wife only earns a state pension, all the rental income (approx £9k pa) will be paid to her and declared on a self employed/self assessment basis. Would it be best to purchase the buy to let house in my wife's name, joint names of myself and my wife (the same as our main residence) or joint names of myself, my wife and my son. My son currently lives with us and has only ever previously rented property - am I right in assuming if he is a joint owner of the buy to let, he will lose his first time buyer stamp duty discount? This is not really an issue though as it is very unlikely that he will ever purchase a suitable property independently. Does the buy to let need to be purely in the wife's name for her to earn all the rental income or is it possible to buy it jointly and for my wife to be nominated to earn all the income from it?

Looking to the future, and assuming my son outlives us, what would the CGT implications be if he decided to move into the the buy to let property and to rent out or sell our main residence? Alternatively, if he was to sell both the main residence and the buy to let and move to a different area, would he be subject to CGT on the buy to let? Naturally, the buy to let is being bought at pretty much the peak of the market so whether the price will increase dramatically in the next 10 years or so is probably quite unlikely.

Given that the property is being purchased as a buy to let, I assume that stamp duty will have to be paid at a higher rate. Is there a potential loop hole of effectively buying the buy to let for our son to live in initially and then after a few months deciding to letting it out?

Would it be beneficial to set up a company or is it possible to declare the rent on a self-employed, self assessment basis?

I have looked into the Deposit Protection Scheme and mydeposits.co.uk looks relatively straightforward but is there another service anyone can recommend?

Finally, the more I've heard about estate agents from friends that have rented in the past, the keener I am to manage the rental myself - this way I can meet the tenants and am responsible to sorting out any repairs directly myself. Are there any particular websites that attract the best tenants? I am looking to rent to a family with dependable jobs (if there is such a thing, these days!)

Apologies for such a long post, but I'd greatly appreciate all advice from those far more experienced than me.

dimbo61

If your Son is on the deeds he loses his First Time Buyer status and will have to pay 3% extra stamp duty when he buys his first home.
Can't use a LISA to buy a property !

Nearlyold

Can I suggest you buy an an up to date book on "Buy to Let",  you have so many questions in your post that with the best will in the world not many of us who may (or may not) have some or all of the answers are going to have the time type it all out. 

All I would say is that in relation to managing agents - we never use them as they only ever seem to know the most expensive plumbers & electricians etc.

Mahsroh

To answer a couple of points….. (I’ll leave the remainder to those with more knowledge than me)

When you bid on an auction you are committing to the purchase there and then, which is why you have a buyers pack / legal pack in advance. When you buy a property in the traditional way you make an offer with the property then sold subject to contract. At that point you’ll employ a solicitor and the sellers solicitor will then send the contract documents over and you have time to arrange a survey etc. hence, you don’t get a buyers pack with the same level of info as you do when buying at auction. 

On the letting agent thing. Whilst you may wish to manage the property once you have a tenant in place, you will be better off using a letting agent for their “tenant finding service” (much the same way you would use an estate agent to sell you house but then don’t need their services following completion). The letting agent will market your property to perspective tenants and carry out the vetting process, then once they’re in place you can take over the management. 

Just bear in mind there is a lot of legislation to keep up to speed with so if you’re new to being a LL it might be advisable to not manage it yourself in the first instance. I agree there are a lot of substandard letting agents out there and when I was a LL (up until recently) I frequently felt like I was paying too much for a service that wasn’t really providing value for money, but at the same time I always felt comfortable that they looked after my interests in terms of ensuring I was complying with the law/ legislation. 

MaryNB

Make sure you read up on all the legislation related to being a landlord. Even if you get a letting agent, you are legally responsible for ensuring the rules are followed. If you don't follow them you could be subject to fines and could find it extremely difficult to get the property back if you want to issue an S21 notice so you can apply for an eviction order.

To start with have a look at these links from the sticky at the top of this form.

Post 7: New landlords (1):advice & information :see links in next post

Post 8: New landlords (2): Essential links for further information

RGT501

Many thanks for the replies, much appreciated. I can see how important it is to keep on top of all the rules from the start.

user1977

RGT501 said:

Am I right in assuming that I should make an offer on a property subject to carrying out a solicitor's search and a surveyor's survey regarding structural problems, mining search, mundic etc?

Yes, but (assuming you're talking about England or Wales) that's the norm anyway, there's no need to be explicit about it. Your "offer" isn't in any way binding.

RGT501

Can anyone recommend the best book as a Buy to Let guide?

I've found The Complete Guide to Residential Letting by Tessa Shepperson but the most recent edition I can find is 2015 - are there any other more up to date books on the subject?

[Deleted User]

Don't do it.