Becoming a Landlord for the first time

Cleagarr

Hi there,

I'm moving for work but am unable to sell my house due to a covenant on it for another 4 years. I will therefore rent it out but as a salaried worker for twenty years I have  o idea how this works with tax etc. I have had a look on the .gov website and think I need a spreadhsheet for incomes, costs etc for the rental property... does anyone have one of these they could share to get me started?
Many thanks.

RedFraggle

https://forums.moneysavingexpert.com/discussion/5180214/tenancies-in-eng-wales-guides-for-landlords-and-tenants/p1

If you haven't already have a read through here. Are you permitted to rent it out? 

Cleagarr

Thanks for that - will take a look.

Yes, I can rent it out and have permission from the mortgage cpmpany. The covenant is an overage payment if we sell within ten years so no problem with that.

Mr.Generous

You don't really need a spreadsheet. You will need to register for tax with HMRC. A seperate bank account makes it easy. All money into that account from rent, all tax deductable expenses paid from it. That account becomes your tax return in effect.

GOV.uk site lists all allowable expenses for landlords, its not as simple as you might think. Choose your tenants carefully, that is the BIG business decision.

macman

Are you aware of the numerous regulatory and statutory requirements made of a landlord? And, when the time comes that you do want to sell the property, tat it may take you many months to evict a tenant who is not willing to leave at the end of the notice period? And that the current government is committed to abolishing so-called 'no fault evictions' under S21?

Cleagarr

Mr.Generous said:

You don't really need a spreadsheet. You will need to register for tax with HMRC. A seperate bank account makes it easy. All money into that account from rent, all tax deductable expenses paid from it. That account becomes your tax return in effect.

GOV.uk site lists all allowable expenses for landlords, its not as simple as you might think. Choose your tenants carefully, that is the BIG business decision.

Thanks. Very interesting about the bank account and thoughts on the tenants. 

Cleagarr

macman said:

Are you aware of the numerous regulatory and statutory requirements made of a landlord? And, when the time comes that you do want to sell the property, tat it may take you many months to evict a tenant who is not willing to leave at the end of the notice period? And that the current government is committed to abolishing so-called 'no fault evictions' under S21?

I’m on a learning journey with this. Not completely sure if the point you are making? That there are potential pitfalls…? In which case, noted thank you?

RAS

Getting a property ready to let requires that you get numerous certificates, on-going compliance and you can still get the tenant from hell

Can you afford to pay the mortgage if your tenant decides not to pay, it takes 18 months to evict them, you are legally obliged to replace the boiler during that time and then they wreck the place?

macman

Cleagarr said:

macman said:

Are you aware of the numerous regulatory and statutory requirements made of a landlord? And, when the time comes that you do want to sell the property, tat it may take you many months to evict a tenant who is not willing to leave at the end of the notice period? And that the current government is committed to abolishing so-called 'no fault evictions' under S21?

I’m on a learning journey with this. Not completely sure if the point you are making? That there are potential pitfalls…? In which case, noted thank you?

The point I'm making is that being an LL is a full-on business, and no place for an amateur. If you are prepared to put in the many hours of work involved, and learn the regs, then fine, good luck to you. 
And don't think that you can just dump all the work onto an agency. As LL, you remain liable for any breaches, not the agent, even if due to their negligence.
Please don't become an 'accidental landlord'.
And, when it all comes to an end, don't forget that you will be subject to CGT at 18 or 20% on the taxable gain.

propertyrental

Join a Landlords Association and consider going on one of their training courses.

(tax deductable expense!)

https://www.nrla.org.uk/

https://thebla.co.uk/

There are also some small local ones, which can be useful for meeting other local LLs, and they often have affiliation to the nationals so get the national benefits too.

CalJo99

If you're in a holiday area, you might want to consider holiday lets - much harder for a holidaymaker to get adverse possession (ie, won't clear out!). (It can happen though - some horror stories around.)

The place still has to be safe though -eg smoke alarms, fire extinguishers etc etc.

Adverse possession is the big fear of BTL landlords. Bad tenants can do huge damage. You only have to watch a couple of episodes of Nightmare Tenants and Landlords to get that (because landlords can be nightmares too.)