Becoming a Landlord for the first time

propertyrental

CalJo99 said:

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.)

No idea what you are talking about here.

Adverse possession (even if feasible for a tenant, which it isn't) takes either 10 or 12 years.

If a LL can't succeed in evicting the T in that timeframe, then that's just pure incompetence!

anselld

macman said:

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?

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.

CGT 18 or 28%

chrisw

macman said:

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. 

This is just scaremongering. Yes, you need to understand the rules and regulations at the start but we all have to start somewhere. I haven't used a letting agent for 15 years and being a landlord probably takes up a couple of days of my time each year, if that.

Of course there are risks and it sometimes feels like a bit of a gamble but these risks can be minimised by finding the right tenants.

Whether it is actually the right decision for you is another matter.

Cleagarr

Thanks all. Some potentially scary reasons not to do it! I can’t quite get my head around the Capital Gains tax issue - does it apply if I move back in and then sell later? 

Another query is that I jointly own the house with my wife - do we both benefit from the £1,000 tax free allowance - and which of us should claim the income? Any issues to consider there? 

badger09

Cleagarr said:

Thanks all. Some potentially scary reasons not to do it! I can’t quite get my head around the Capital Gains tax issue - does it apply if I move back in and then sell later? 

Another query is that I jointly own the house with my wife - do we both benefit from the £1,000 tax free allowance - and which of us should claim the income? Any issues to consider there? 

Moving back in doesn’t wipe out any CGT liability. Basically, the period you live there + the last 9 months, is exempt. The gain is averaged over the whole period of ownership & the let period is chargeable. 

You are getting more confused. The £1k you mention relates to interest from savings. There is no £1k allowance on rental income. 

What rate of tax do you and your wife pay? If basic rate, are either of you near the higher rate threshold?

dimbo61

Please join the NRLA and use the documents and guides they have for members.
Speak to a local lettings agents to find out of your home is suitable to rent out and what the local market is like.
Hundreds of rules, regs and laws regarding housing and being a Landlord.
GSC, EICR, Pat testing, Right to Rent, How to Rent, deposits, fire safety, PI, etc

macman

The rental income would be taxable based on your share of the property. So if you and your wife own 50% each, you each declare half the rental income, and each claim half the deductible expenses.

scottishblondie

Is this a permanent move and the rental thing is just to avoid losing money to this covenant, or will you be coming back?
If the move is permanent then you need to run the numbers carefully to decide if it's actually worth renting it out.  There will be start up costs, tax, ongoing maintenance and repairs, CGT when you do decide to sell etc.  Over the time that you intend to hang on to it, will you actually break even or make a profit once it is all taken into account? 

I've been a LL for over 10 years now.  It took 5 years for me to get into the black on my rental property (my former home), and then it was only for 2 years before I was in the red again.  I've got tenants who don't report issues until the damage is severe, refuse to vacate to alternative accommodation for essential repairs (having the entire bathroom replaced due to the issue they didn't report that snowballed), didn't pay rent for most of 2020 etc.  Overall it's been a nightmare that I wish I had never gotten in to.  Last year I finally decided to sell up and put the equity towards my residential mortgage, only for the Scottish eviction ban to be announced a few days before I could serve the notice.  Then the massive increase in CGT tax was announced shortly after.

I'm not trying to scare you out of this, but you do need to be aware of everything that can go wrong.

macman

chrisw said:

macman said:

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. 

This is just scaremongering. Yes, you need to understand the rules and regulations at the start but we all have to start somewhere. I haven't used a letting agent for 15 years and being a landlord probably takes up a couple of days of my time each year, if that.

Of course there are risks and it sometimes feels like a bit of a gamble but these risks can be minimised by finding the right tenants.

Whether it is actually the right decision for you is another matter.

Do you not do 6 monthly inspections? if so, say half a day for that, so one day a year. How can you possibly arrange everything else in one day? Repairs, maintenance, annual GSC, billing?
I agree with much of what you say: but the problem is that many LL's do not understand the rules and regs at the start and muddle their way through, which can have severe consequences if the tenant is savvy enough and knows the law.

chrisw

macman said:

chrisw said:

macman said:

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. 

This is just scaremongering. Yes, you need to understand the rules and regulations at the start but we all have to start somewhere. I haven't used a letting agent for 15 years and being a landlord probably takes up a couple of days of my time each year, if that.

Of course there are risks and it sometimes feels like a bit of a gamble but these risks can be minimised by finding the right tenants.

Whether it is actually the right decision for you is another matter.

Do you not do 6 monthly inspections? if so, say half a day for that, so one day a year. How can you possibly arrange everything else in one day? Repairs, maintenance, annual GSC, billing?
I agree with much of what you say: but the problem is that many LL's do not understand the rules and regs at the start and muddle their way through, which can have severe consequences if the tenant is savvy enough and knows the law.

I haven't really done 6 monthly inspections as 'issues' seem to crop up every 6 months or so. I usually pop round, weigh up the issue and then, if needed, phone the appropriate tradesmen who sort it for me. Some of the jobs have been major such as boilers, doors and windows and facias. Same with gas and electrical checks and servicing. 

Building a relationship with the trades is probably key.