New Landlord: How to Maximise Returns? Taxes?

ashe

jj_43 said:

what experience do you have to be a landlord? if none, sell.

So In a couple of decades there are no more landlords because those without experience shouldn't become one? 

hazyjo

If they're going to be next to a nightmare neighbour, I think you should add a 6 month break clause (at least) in their contract.

ciderboy2009

OP - presumably you've obtained consent tolet from your mortgage provider or switched to a buy to let mortgage?

macman

The OP hasn't  been back since posting. I wonder why?

jj_43

ashe said:

jj_43 said:

what experience do you have to be a landlord? if none, sell.

So In a couple of decades there are no more landlords because those without experience shouldn't become one? 

Perhaps they already work in property?
I am a landlord and unfortunately the biggest problem for the sector are wannabe landlords with no experience, no actual interest, except viewing it has a “passive income”. Licensing should be introduced.

Jumblebumble

macman said:

So you have agreed to rent a property and found an agent and  tenant, but without doing any research as to how the income will be taxed, what allowances are available, or what your legal and statutory responsibilities are as a landlord? You can't delegate these to an agent: it is the landlord who is legally liable if the tenancy is not regularised.
Nor presumably do you have any idea of what the yield will actually be vs your mortgage payments? Do you already have a BTL mortgage, or permission to let from the mortgage provider?

The OP is doing their research by asking on here !
The tax payable will probably not be relevant for a very long time
Anyone with an elementary grasp of mathematics can calculate yield or can ask the agent 
Are you telling us that a landlord should not believe that  their agent is advising correctly about their responsibilities ?

I do agree that the OP should address the mortgage permission to rent issue although in the real world if no one tells the mortgage company I don't see that they will  know  and therefore there will be no issue

Dazed_and_C0nfused

Jumblebumble said:

macman said:

So you have agreed to rent a property and found an agent and  tenant, but without doing any research as to how the income will be taxed, what allowances are available, or what your legal and statutory responsibilities are as a landlord? You can't delegate these to an agent: it is the landlord who is legally liable if the tenancy is not regularised.
Nor presumably do you have any idea of what the yield will actually be vs your mortgage payments? Do you already have a BTL mortgage, or permission to let from the mortgage provider?

The OP is doing their research by asking on here !
The tax payable will probably not be relevant for a very long time
Anyone with an elementary grasp of mathematics can calculate yield or can ask the agent 
Are you telling us that a landlord should not believe that  their agent is advising correctly about their responsibilities ?

I do agree that the OP should address the mortgage permission to rent issue although in the real world if no one tells the mortgage company I don't see that they will  know  and therefore there will be no issue

Maybe I've misunderstood the context but given both the capital and interest element of the mortgage can no longer be deducted as an expense for tax purposes then there is likely to be a tax liability sooner rather than later.

Unless maybe the property is transferred to the non earning partner.

And the tax credit available on the finance costs won't necessarily have the same impact as being able to claim it as an expense.  For all we know the op could be Scottish resident for tax purposes and get into 21/41% tax rates.

theartfullodger

hazyjo said:

If they're going to be next to a nightmare neighbour, I think you should add a 6 month break clause (at least) in their contract.

Why on earth would you grant any new tenant a tenancy of more than 6 months?  Genuine question, looking forward to the answers.

grumiofoundation

Jumblebumble said:

macman said:

So you have agreed to rent a property and found an agent and  tenant, but without doing any research as to how the income will be taxed, what allowances are available, or what your legal and statutory responsibilities are as a landlord? You can't delegate these to an agent: it is the landlord who is legally liable if the tenancy is not regularised.
Nor presumably do you have any idea of what the yield will actually be vs your mortgage payments? Do you already have a BTL mortgage, or permission to let from the mortgage provider?

The OP is doing their research by asking on here !
The tax payable will probably not be relevant for a very long time
Anyone with an elementary grasp of mathematics can calculate yield or can ask the agent 
Are you telling us that a landlord should not believe that  their agent is advising correctly about their responsibilities ?

I do agree that the OP should address the mortgage permission to rent issue although in the real world if no one tells the mortgage company I don't see that they will  know  and therefore there will be no issue

Don't see how this is point re tax is true?  Rental income needs to be declared on tax return - so tax payable is relevant from day one.


A landlord would be stupid to just believe a letting agent (remind me what legal training is a letting agent required to have?) - primarily because the landlord is legally responsible for anything that goes wrong e.g. deposit not protected, GSC not done. Secondly because there are numerous examples of letting agents making mistakes/lying to tenants. I could list you five off the top of my head that have happened to me or close friends, read some threads on here.

If you have a residential mortgage, it’s will be the terms of your loan to rent it out without lender’s permission - that's mortgage fraud.

Your final comment suggests this is very unlikely to be an issue. It would not be sensible for the OP to listen to that comment.

Grumpy_chap

ambren said:

So we’re about to rent out our first house which we unfortunately had to leave shortly after moving in due to issues with a criminal neighbour (assault, thefts, harassment). I’m looking for advice and help on how to get the best from renting, as our luck has been terrible so far and it’s been a big financial loss paying a mortgage for a house we can’t live in anymore.

The tenants are from overseas and have agreed to pay the year’s rent up front as a lump sum around £19k.

For context, I’m employed around £35k, my partner (girlfriend, cohabiting) is from overseas, unemployed and seeking work. We’re using an agent (council leasehold limits to only one company) at 7%. The house is mortgaged around £100k. Anything else useful please ask.

Any useful tips, tax advice would be greatly appreciated, we could really do with the help! Thank you in advance!

There are a lot of red flags in this post that give me cause for concern.  I have to query whether the OP would be better selling up.

Troublesome neighbour - you can't live there, but think a tenant will be happy to...

Overseas tenant paying £19k upfront for the year...

Mortgage consent to let, landlord insurance, certificates...

Restricted letting agent choice, what service is being provided for the (very low) 7% fee?...

Freeholder consent to let...

FWIW, I am a landlord