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    • jackharrison342
    • By jackharrison342 15th Apr 18, 3:40 PM
    • 12Posts
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    jackharrison342
    Does anyone let to rent?
    • #1
    • 15th Apr 18, 3:40 PM
    Does anyone let to rent? 15th Apr 18 at 3:40 PM
    I am looking for somewhere to live as I am currently in a shared house and want a place to myself, however small.
    I ask about let to rent as I already have a mortgage on a property I let out where the tenant wants to stay and it's a property I don't especially want to live in.
    Buying a second property will incur 3 per cent stamp duty and new mortgage and redemption fees which may put me off doing that.
    I thought of let to rent to avoid selling and all the fees involved plus the freedom to move every 6 months or year.
    Is this a good or bad idea and does anyone here do this?
Page 1
    • Annie35
    • By Annie35 15th Apr 18, 4:13 PM
    • 238 Posts
    • 203 Thanks
    Annie35
    • #2
    • 15th Apr 18, 4:13 PM
    • #2
    • 15th Apr 18, 4:13 PM
    You're already doing that now though?
    • jackharrison342
    • By jackharrison342 15th Apr 18, 4:22 PM
    • 12 Posts
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    jackharrison342
    • #3
    • 15th Apr 18, 4:22 PM
    • #3
    • 15th Apr 18, 4:22 PM
    Sort of but I currently only pay 350 a month including all bills. If I find my own place it will be maybe 800 with bills on top.
    • Annie35
    • By Annie35 15th Apr 18, 8:29 PM
    • 238 Posts
    • 203 Thanks
    Annie35
    • #4
    • 15th Apr 18, 8:29 PM
    • #4
    • 15th Apr 18, 8:29 PM
    I think the point of let to rent is to own & rent out a more expensive property & live in a cheaper place thus give you a return, that's how I read it anyway. But saying that if you can't or don't want to sell the house & don't want to live in it there's nothing stopping you renting elsewhere.

    Just do your sums, Inc voids & hassle fund and see if it's worth the hoped for end goal
    • jackharrison342
    • By jackharrison342 16th Apr 18, 9:38 AM
    • 12 Posts
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    jackharrison342
    • #5
    • 16th Apr 18, 9:38 AM
    • #5
    • 16th Apr 18, 9:38 AM
    The question I guess is does let to rent make sense or is it better to buy another property. Or just sell the one I got and buy a different one and get out of btl.

    I have no pension plan so I could keep this first flat as an alternative to that maybe?
    • Pixie5740
    • By Pixie5740 16th Apr 18, 10:28 AM
    • 13,385 Posts
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    Pixie5740
    • #6
    • 16th Apr 18, 10:28 AM
    • #6
    • 16th Apr 18, 10:28 AM
    No, let to rent does not make sense. For starters it's not very tax efficient. Why don't you want to live in the property you let out? Why don't you have a pension? If you're an employee you should have one.
    • saajan_12
    • By saajan_12 16th Apr 18, 1:12 PM
    • 1,528 Posts
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    saajan_12
    • #7
    • 16th Apr 18, 1:12 PM
    • #7
    • 16th Apr 18, 1:12 PM
    Not saying its a bad idea, just to make sure you've thought about the flip side of some of your points:
    I am looking for somewhere to live as I am currently in a shared house and want a place to myself, however small.
    I ask about let to rent as I already have a mortgage on a property I let out where the tenant wants to stay and it's a property I don't especially want to live in. - does it make a good rental property? Does your tenant have a good rent payment / no damage history? You could sell to a BTL investor who keeps the tenant and steps in your shoes as LL.
    Buying a second property will incur 3 per cent stamp duty and new mortgage and redemption fees which may put me off doing that.- If you sell the property, then no extra 3% SDLT and you can often port the mortgage so no redemption fees, only a valuation fee for the new property.
    I thought of let to rent to avoid selling and all the fees involved plus the freedom to move every 6 months or year. - renting will also incur agent fees, reference checks etc, plus fees on the property you let. With renting you do have the freedom to move every 6 months, but remember so do your tenants, meaning you could have voids when you're still paying mortgage + bills + your rent. As an owner occupier you're not subject to the whims of someone else choosing to move every 6 months.
    Is this a good or bad idea and does anyone here do this?
    Originally posted by jackharrison342
    Letting a property and renting yourself is tax and hassle IN-efficient.
    * You pay tax on rent income and pay gross rent on your residence
    * You pay higher BTL interest rates on mortgage
    * You have to liaise with an extra person (tenant) for access to your let property for repairs, while having to go through you LL to effect repairs to your residence
    * You cover rent + mortgage during voids in your let property, while you cover rent + rent if you have to move due to having an insecure tenancy yourself and have an overlap.

    However selling and buying somewhere for yourself incurs some cost + hassle upfront (EA fees, valuation fees, solicitors, eviction hassle, .. ). Calculate the exact costs of these upfront costs and the actual rent you'd pay vs what rent income (net of tax, agent fees..). It may just work out for you.
    • jackharrison342
    • By jackharrison342 16th Apr 18, 4:16 PM
    • 12 Posts
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    jackharrison342
    • #8
    • 16th Apr 18, 4:16 PM
    • #8
    • 16th Apr 18, 4:16 PM
    Thanks now it doesn't sound such a good idea! How about the buying additional property idea? Other than one off stamp duty is there any reason not to do this for the long term?
    • Pixie5740
    • By Pixie5740 16th Apr 18, 4:39 PM
    • 13,385 Posts
    • 19,307 Thanks
    Pixie5740
    • #9
    • 16th Apr 18, 4:39 PM
    • #9
    • 16th Apr 18, 4:39 PM
    Thanks now it doesn't sound such a good idea! How about the buying additional property idea? Other than one off stamp duty is there any reason not to do this for the long term?
    Originally posted by jackharrison342
    How would that be anymore tax efficient? Is there a particular reason why you would rather let properties to other people whilst renting yourself instead of buying your own home?
    • jackharrison342
    • By jackharrison342 16th Apr 18, 4:54 PM
    • 12 Posts
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    jackharrison342
    The additional one would be to live in while keeping the first one as a pension?
    • Pixie5740
    • By Pixie5740 16th Apr 18, 5:59 PM
    • 13,385 Posts
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    Pixie5740
    Deja vu

    http://forums.moneysavingexpert.com/showthread.php?t=5802458
    • agrinnall
    • By agrinnall 16th Apr 18, 6:15 PM
    • 21,753 Posts
    • 17,636 Thanks
    agrinnall
    The additional one would be to live in while keeping the first one as a pension?
    Originally posted by jackharrison342

    Why not just invest in a pension? What you're attempting to do is far more risky.
    • saajan_12
    • By saajan_12 16th Apr 18, 6:50 PM
    • 1,528 Posts
    • 1,135 Thanks
    saajan_12
    How would that be anymore tax efficient? Is there a particular reason why you would rather let properties to other people whilst renting yourself instead of buying your own home?
    Originally posted by Pixie5740
    The additional one would be to live in while keeping the first one as a pension?
    Originally posted by jackharrison342
    Your original plan = own one house + rent elsewhere so very simplistically:
    Initially: rent income covers mortgage, your salary pays your rent
    Later: mortgage paid off & you retire, so rent income pays your rent, NO PENSION for other living costs
    Benefit (/lose) from any house value increase on ONE property if you sell

    If instead you sell this one and own and live in one property:
    Initially: your salary covers mortgage
    Later: No salary, no mortgage (paid off), NO PENSION for other living costs
    Benefit (/lose) from any house value increase on ONE property if you sell

    So in both cases, you need an outside pension for other costs, the property will cover your accommodation only.
    • DCFC79
    • By DCFC79 16th Apr 18, 6:51 PM
    • 33,163 Posts
    • 20,882 Thanks
    DCFC79
    Jack

    What other replies other than those in your other thread are you after ?
    Last edited by DCFC79; 17-04-2018 at 7:13 PM.
    • jackharrison342
    • By jackharrison342 16th Apr 18, 6:56 PM
    • 12 Posts
    • 0 Thanks
    jackharrison342
    Thanks so I need to either keep the first flat for a pension or get a pension to pay into. Only other potential income later is inheritance but that potentially could be lost to care homes!
    • Wanderingpomm
    • By Wanderingpomm 16th Apr 18, 7:32 PM
    • 108 Posts
    • 113 Thanks
    Wanderingpomm
    I think the point of let to rent is to own & rent out a more expensive property & live in a cheaper place thus give you a return, that's how I read it anyway. But saying that if you can't or don't want to sell the house & don't want to live in it there's nothing stopping you renting elsewhere.

    Just do your sums, Inc voids & hassle fund and see if it's worth the hoped for end goal
    Originally posted by Annie35
    Not necassariky. I do the opposite. Own in an area thatís cheap but I donít want to live in. I rent a flat I cabít Afford to buy in an expensive atea
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