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1st time letting house. Help needed. Plz
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FlorayG said:Honestly if it's only for 6 months it's not worth jumping through the hoops for renting out the house. I have a rental and I also have a lodger. Lodgers are much less legal work and as your sister already knows the potential lodger well, she surely already knows if they can 'cope' with sharing the house.
For a lodger you just need to provide a room for their own use - with fire safe furniture - and have a gas safety certificate which any gas engineer can do for you. You can charge whatever you like ( although obviously bearing in mind what they can claim) and make reasonable rules. Also, if it turns out you really don't get on, the lodger is usually as keen to move out as you are to be rid of them
Renting a room is also exempt from tax up to £7,500 a year. If she rents the whole house she will pay tax on the entire income ( less any costs)
Would that 7500 apply even if my sister works ?
I think this will be tye best route for her. So she provides her friend with a lodger agreement. In terms of gas safe cert etc. Does she have to just show her friend this or tye DPW or any other agencies ?
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Interested in this thread as pondering what to do ourselves. We have a 2 bed terrace that we bought for family members to live in - they have now moved out and got their own place. Its compliant in terms of gas and electric etc, we've had new windows fitted etc recently...probably worth £90K - paid £44K and so if sold would be subject to CGT.
We really need to make a decision on whether to rent it out (would be £600 pcm) or to sell - we don't really need the capital - we own outright and rental would provide a steady income stream for the rest of our lives (we are in our 50s). Meanwhile its costing me around £250 per month in terms of utilities/council tax/broadband etc as ive not cancelled them since family moved out. My reckoning is that we are missing out on c£850 per month (lost rental and what we would save on the bills)
Any thoughts?Mortgage free since 2010 - in my 30s
Previous profile inkie - but couldn't remember log-in details etc and so set this new profile up.0 -
_Penny_Dreadful said:If your sister's goal is to maximise her income then she needs to compare the money she would make taking in a lodger (excluded occupier) versus letting the whole property on an AST. With the former your sister can used the rent a room scheme which means no tax to pay on the first £7,500 of rental income which is not available when you let the whole property.
As the friend is reliant on benefits it is likely the local housing allowance won't meet the market rate available for the property/room. Your sister can check the LHA here: https://lha-direct.voa.gov.uk/_Penny_Dreadful said:If your sister's goal is to maximise her income then she needs to compare the money she would make taking in a lodger (excluded occupier) versus letting the whole property on an AST. With the former your sister can used the rent a room scheme which means no tax to pay on the first £7,500 of rental income which is not available when you let the whole property.
As the friend is reliant on benefits it is likely the local housing allowance won't meet the market rate available for the property/room. Your sister can check the LHA here: https://lha-direct.voa.gov.uk/
We just checked. It doesn't really show much they get gor renting allowance on that website. It just showed 1 person is entitled to get a room0 -
BonaDea said:Lodger agreement template: https://m.spareroom.co.uk/lodgeragreement
Thanks for that.0 -
Misteek said:FlorayG said:Honestly if it's only for 6 months it's not worth jumping through the hoops for renting out the house. I have a rental and I also have a lodger. Lodgers are much less legal work and as your sister already knows the potential lodger well, she surely already knows if they can 'cope' with sharing the house.
For a lodger you just need to provide a room for their own use - with fire safe furniture - and have a gas safety certificate which any gas engineer can do for you. You can charge whatever you like ( although obviously bearing in mind what they can claim) and make reasonable rules. Also, if it turns out you really don't get on, the lodger is usually as keen to move out as you are to be rid of them
Renting a room is also exempt from tax up to £7,500 a year. If she rents the whole house she will pay tax on the entire income ( less any costs)
Would that 7500 apply even if my sister works ?
I think this will be tye best route for her. So she provides her friend with a lodger agreement. In terms of gas safe cert etc. Does she have to just show her friend this or tye DPW or any other agencies ?
If you search the internet a bit you can find a lodger agreement for free; they are fairly basic as lodgers don't have anything like the rights given to tenants0 -
Dunno if explained but which country - e.g. wales, NI, ... Laws are different, ...e.g. Scotland tenant can give 28 days notice anytime including on day 1.
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Misteek said:_Penny_Dreadful said:If your sister's goal is to maximise her income then she needs to compare the money she would make taking in a lodger (excluded occupier) versus letting the whole property on an AST. With the former your sister can used the rent a room scheme which means no tax to pay on the first £7,500 of rental income which is not available when you let the whole property.
As the friend is reliant on benefits it is likely the local housing allowance won't meet the market rate available for the property/room. Your sister can check the LHA here: https://lha-direct.voa.gov.uk/_Penny_Dreadful said:If your sister's goal is to maximise her income then she needs to compare the money she would make taking in a lodger (excluded occupier) versus letting the whole property on an AST. With the former your sister can used the rent a room scheme which means no tax to pay on the first £7,500 of rental income which is not available when you let the whole property.
As the friend is reliant on benefits it is likely the local housing allowance won't meet the market rate available for the property/room. Your sister can check the LHA here: https://lha-direct.voa.gov.uk/
We just checked. It doesn't really show much they get gor renting allowance on that website. It just showed 1 person is entitled to get a roomAll shall be well, and all shall be well, and all manner of things shall be well.
Pedant alert - it's could have, not could of.1
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