First time landlord - advice please
Discussion
My girlfriend and I are letting our flats out so we can rent a house together. She's moving into mine this weekend so she's ready to let. I'll be ready next month.
We've spoken to our mortgage providers and they've consented to it.
How do you handle the finances for the properties you let out? Is it worth setting up a bank account solely for income and expenses so it's easier to track?
Keeping accounts. I understand costs like mortgage interest, repairs, service charges can be offset against profit to reduce tax liability? Is this simple enough to do yourself?
My flat was built ten years so I'm conscious the in built appliances in the kitchen are on borrowed time. Can these be costs I can also use to reduce tax liability?
I'm aware we'll need to complete a gas safety check annually. Do we need any electrical test carried out before letting?
Letting agents - no idea! Their fees vary significantly for various services. What do you recommend?
Anything else we've not thought about?
Thanks in advance!
We've spoken to our mortgage providers and they've consented to it.
How do you handle the finances for the properties you let out? Is it worth setting up a bank account solely for income and expenses so it's easier to track?
Keeping accounts. I understand costs like mortgage interest, repairs, service charges can be offset against profit to reduce tax liability? Is this simple enough to do yourself?
My flat was built ten years so I'm conscious the in built appliances in the kitchen are on borrowed time. Can these be costs I can also use to reduce tax liability?
I'm aware we'll need to complete a gas safety check annually. Do we need any electrical test carried out before letting?
Letting agents - no idea! Their fees vary significantly for various services. What do you recommend?
Anything else we've not thought about?
Thanks in advance!
Eric Mc said:
CGT is not payable if you are selling your main residence. Once the property STOPS being your main residence but you still retain it, it begins to become liable to CGT.
It depends on how long after the property stops being your Main Residence that determines whether CGT is an issue.
Essentially, the gain between the buying price and selling price is worked out. Then the gain is split on a time basis between the time the property was your Main Residence and the time it wasn't your main residence.
That part of the gain that relates to the period of time when the property wasn't your Main Residence is the gain that will be subject to CGT.
When calculating the time period used for main residency, this is the actual time of Main Residency plus an additional 18 months.
So if we cash in our properties to buy a house together within 18 months of letting them out, we shouldn't have to pay CGT?It depends on how long after the property stops being your Main Residence that determines whether CGT is an issue.
Essentially, the gain between the buying price and selling price is worked out. Then the gain is split on a time basis between the time the property was your Main Residence and the time it wasn't your main residence.
That part of the gain that relates to the period of time when the property wasn't your Main Residence is the gain that will be subject to CGT.
When calculating the time period used for main residency, this is the actual time of Main Residency plus an additional 18 months.
I'm guessing at the point of letting, we need to get valuations so the differences in price can be worked out.
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