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  • FIRST POST
    • timboworsley
    • By timboworsley 5th Mar 18, 6:02 AM
    • 3Posts
    • 2Thanks
    timboworsley
    Moving in with GF. Renting out my house.
    • #1
    • 5th Mar 18, 6:02 AM
    Moving in with GF. Renting out my house. 5th Mar 18 at 6:02 AM
    Hi,
    I currently own a 3 bed place thatís worth around £320,000 and I owe £130,00. I pay £550 pm mortgage.
    If I move in with my gf I could rent out my property for about £1,250 pcm.
    My partner is in a similar situation to me. She owns a property and pays a mortgage.
    We both work. We both have children from previous relationships.
    My plan would be for us to share the profit from the rental and split the bills in her property.

    I appreciate I would need to pay tax on the income from the rent.

    Does this sound viable? Am I missing something?
    Would this affect the amount of money I get for the house if I decide to sell later down the line?
    Any advice welcome x
Page 1
    • Browntoa
    • By Browntoa 5th Mar 18, 6:31 AM
    • 33,069 Posts
    • 38,629 Thanks
    Browntoa
    • #2
    • 5th Mar 18, 6:31 AM
    • #2
    • 5th Mar 18, 6:31 AM
    Have you got mortgage company permission to rent ?

    Landlords insurance if so ?
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • FBaby
    • By FBaby 5th Mar 18, 7:15 AM
    • 16,693 Posts
    • 41,282 Thanks
    FBaby
    • #3
    • 5th Mar 18, 7:15 AM
    • #3
    • 5th Mar 18, 7:15 AM
    My plan would be for us to share the profit from the rental and split the bills in her property.
    Does the bill include contribution towards her mortgage? If not, then that's fair enough but you do need to consider that if things go wrong, she could kick you out any minute whilst you wouldn't be able to get back into your property and depending on the terms, it could take months before you could.

    You also need to consider the costs of running the business. Tax you'll have to pay, management costs, costs associated with repairs, loss of rental income etc...

    Finally, you also need to take into consideration that if you move with her, her house will be considered your main residence and you would be liable for tax if you were then to decide to sell your house.

    And yes, you'll need to check if your lender will allow you permission to rent or whether you'll need to get a buy to let mortgage.

    Let put it this way, make sure before you take the step that the relationship is as solid as it gets so that the risks associated with the above is worth what you gain from moving in with her.
    • AdrianC
    • By AdrianC 5th Mar 18, 8:47 AM
    • 17,395 Posts
    • 15,762 Thanks
    AdrianC
    • #4
    • 5th Mar 18, 8:47 AM
    • #4
    • 5th Mar 18, 8:47 AM
    £1,250 rent in, £550 mortgage out sounds so tempting.
    On a £320k property, that's a yield of 4.7%.

    Can you get consent to let? Or will you need to refinance to a BtL mortgage?
    Are you willing to manage the property yourself, or will you be paying an agent?
    How much will your buildings insurance go up?
    Is the house ready to let, or does it need work?
    Is letting THAT house even a particularly good bet?
    Gas safety? Landlord certification in your area? Etc, etc, etc.

    It's not hard to see that coming down to 3% yield. Before tax and mortgage interest. Are you a 40% tax payer? If so, you're only offsetting the mortgage interest against basic rate income tax.

    If you think you might want to keep it to return to if things go sour with the relationship, then what will you do if you can't get the tenant out for six or more months?
    What if the tenant does a runner on the eve of enforcing possession, leaving you with rent arrears and a trashed house?

    Don't be an "accidental landlord" - they don't exist. It's just a euphemism for somebody who didn't plan their business.
    • timboworsley
    • By timboworsley 5th Mar 18, 1:11 PM
    • 3 Posts
    • 2 Thanks
    timboworsley
    • #5
    • 5th Mar 18, 1:11 PM
    • #5
    • 5th Mar 18, 1:11 PM
    I have not approached my mortgage provider to see if I could get consent to let. Thatís good advice.

    The house would not need much work.

    I am not a 40% tax payer

    I am concerned about the extra tax I would have to pay if I then decide to sell my house later down the line.

    How do I plan my business?
    • Cakeguts
    • By Cakeguts 5th Mar 18, 1:50 PM
    • 4,372 Posts
    • 6,250 Thanks
    Cakeguts
    • #6
    • 5th Mar 18, 1:50 PM
    • #6
    • 5th Mar 18, 1:50 PM
    I have not approached my mortgage provider to see if I could get consent to let. Thatís good advice.

    The house would not need much work.

    I am not a 40% tax payer

    I am concerned about the extra tax I would have to pay if I then decide to sell my house later down the line.

    How do I plan my business?
    Originally posted by timboworsley
    Do not assume that a house that you buy to live in will make a good rental property. Some do some really do not.

    You have got to be able to pay the mortgage even if you haven't got any rent coming in. Not all tenants pay the rent they are supposed to. This will depend on whether your house is suitable as a rental property in the area that it is in. If the tenant stops paying the rent it could take you more than 6 months to evict them through the court. Can you afford to refurbish your house if your tenant stops paying the rent and then wrecks the house when they leave?

    After April this year your house has got to have an EPC of at least E or you will not be allowed to let it.

    Tenants who rent family houses have their own furniture so what are you going to do with yours? Storage?
    • cjdavies
    • By cjdavies 5th Mar 18, 1:54 PM
    • 3,306 Posts
    • 3,543 Thanks
    cjdavies
    • #7
    • 5th Mar 18, 1:54 PM
    • #7
    • 5th Mar 18, 1:54 PM
    Am I missing something?
    Originally posted by timboworsley

    Do you know what you have to do as a landlord? Tenants rights?
    • cjdavies
    • By cjdavies 5th Mar 18, 1:58 PM
    • 3,306 Posts
    • 3,543 Thanks
    cjdavies
    • #8
    • 5th Mar 18, 1:58 PM
    • #8
    • 5th Mar 18, 1:58 PM
    I have not approached my mortgage provider to see if I could get consent to let. That!!!8217;s good advice.

    The house would not need much work.

    I am not a 40% tax payer

    I am concerned about the extra tax I would have to pay if I then decide to sell my house later down the line.

    How do I plan my business?
    Originally posted by timboworsley

    Start here from a user G_M, read it all.


    Tenancies in Eng/Wales: Guides for landlords and tenants
    http://forums.moneysavingexpert.com/showthread.php?t=5180214&highlight=


    Only if in England and Wales.
    • 00ec25
    • By 00ec25 5th Mar 18, 7:27 PM
    • 6,392 Posts
    • 5,910 Thanks
    00ec25
    • #9
    • 5th Mar 18, 7:27 PM
    • #9
    • 5th Mar 18, 7:27 PM
    Hi,
    I currently own a 3 bed place thatís worth around £320,000 and I owe £130,00. I pay £550 pm mortgage.
    If I move in with my gf I could rent out my property for about £1,250 pcm.
    My partner is in a similar situation to me. She owns a property and pays a mortgage.
    We both work. We both have children from previous relationships.
    My plan would be for us to share the profit from the rental and split the bills in her property.
    Originally posted by timboworsley
    please explain what you think you mean by the statement "share the profit"?

    you are the owner, she is not, only you are entitled to the income so only you bear the tax liability on the profit.

    after you have settled your tax liability you can of course share the money with her if you wish, but you can't abrogate your tax liability
    • PersianCatLady
    • By PersianCatLady 6th Mar 18, 12:57 AM
    • 456 Posts
    • 412 Thanks
    PersianCatLady
    Before you start thinking about renting out your property, you should do some research and find out exactly what being a landlord entails.

    That way, in a few months time, you won't end up having to come onto these forums and desperately ask advice because something you weren't expecting has happened.
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