Buy To Let Questions
Discussion
Morning all. First of all, sorry if any of these questions are stupid!
Basically me and my father are looking to get a property to rent out, he is looking at it as a top up to his pension, I'm just looking at it as a long term investment.
Now the plan is for him to provide the cash deposit, and me to take the mortgage in my name (I presume there is no problems so far?)
1 - Since the mortgage will be in my name, will the rent have to come to me? And how much of it is taxable? I am a high rate tax payer, where my father is not. I work away from home so ideally I'd like to be a 'silent partner' and almost have nothing to do with it.
2 - How much roughly are the landlord costs? Insurances/certificates etc?
3 - We've had a few quotes from our local property management companies, and feel this is the way to go? They charge a finders fee etc, but we are not sure if we should go fully managed?
TBH Any help or advice would be much appreciated.
Thanks in advance
Basically me and my father are looking to get a property to rent out, he is looking at it as a top up to his pension, I'm just looking at it as a long term investment.
Now the plan is for him to provide the cash deposit, and me to take the mortgage in my name (I presume there is no problems so far?)
1 - Since the mortgage will be in my name, will the rent have to come to me? And how much of it is taxable? I am a high rate tax payer, where my father is not. I work away from home so ideally I'd like to be a 'silent partner' and almost have nothing to do with it.
2 - How much roughly are the landlord costs? Insurances/certificates etc?
3 - We've had a few quotes from our local property management companies, and feel this is the way to go? They charge a finders fee etc, but we are not sure if we should go fully managed?
TBH Any help or advice would be much appreciated.
Thanks in advance
justin220 said:
3 - We've had a few quotes from our local property management companies, and feel this is the way to go? They charge a finders fee etc, but we are not sure if we should go fully managed?
Personally I would say if you're going to be local to the property, and you and / or your father are okay at DIY, I would definitely *not* go with fully managed. The letting agents will send an "approved tradesman" who will charge over the odds and do a sub-standard job, in my experience.Feel free to use them as a tenant finder / reference checker, but they will still charge upwards of 8% of each and every month's rent, even if the tenant renews. This they will take out of your first month's rental.
We used an agent for our first ever tenants, but since then have found that local paper / Gumtree are suitable for finding tenants. Interview any potentials and go with your gut feeling, and use a reference / credit checking service. See landlordzone for loads and loads of info, plus you can register with them for the credit checks etc.
justin220 said:
Now the plan is for him to provide the cash deposit, and me to take the mortgage in my name (I presume there is no problems so far?)
1 - Since the mortgage will be in my name, will the rent have to come to me? And how much of it is taxable? I am a high rate tax payer, where my father is not. I work away from home so ideally I'd like to be a 'silent partner' and almost have nothing to do with it.
If your Father intends being on the property deeds then most lenders will want to see him on the mortgage as well.1 - Since the mortgage will be in my name, will the rent have to come to me? And how much of it is taxable? I am a high rate tax payer, where my father is not. I work away from home so ideally I'd like to be a 'silent partner' and almost have nothing to do with it.
If he's not on the deeds, obviously you can't offset any of the renatl profit against his tax allowances.
james12345 said:
justin220 said:
3 - We've had a few quotes from our local property management companies, and feel this is the way to go? They charge a finders fee etc, but we are not sure if we should go fully managed?
Personally I would say if you're going to be local to the property, and you and / or your father are okay at DIY, I would definitely *not* go with fully managed. The letting agents will send an "approved tradesman" who will charge over the odds and do a sub-standard job, in my experience.Feel free to use them as a tenant finder / reference checker, but they will still charge upwards of 8% of each and every month's rent, even if the tenant renews. This they will take out of your first month's rental.
We used an agent for our first ever tenants, but since then have found that local paper / Gumtree are suitable for finding tenants. Interview any potentials and go with your gut feeling, and use a reference / credit checking service. See landlordzone for loads and loads of info, plus you can register with them for the credit checks etc.
the next road).
From 1 weekend of advertising I got 14 applicants, and soon whittled that down to about 3 suitable. The all 3 wanted it, but the one that could move in within 2 weeks got it.
Had a few issues to deal with in the first few months (nothing serious, just a stiff door lock, and a small leak) but since then I hardly hear from them. The last time they spoke to me was December IIRC
james12345 said:
Personally I would say if you're going to be local to the property, and you and / or your father are okay at DIY, I would definitely *not* go with fully managed. The letting agents will send an "approved tradesman" who will charge over the odds and do a sub-standard job, in my experience.
Feel free to use them as a tenant finder / reference checker, but they will still charge upwards of 8% of each and every month's rent, even if the tenant renews. This they will take out of your first month's rental.
A bit sweeping there James although I accept it's your experience.!! I run my own management Firm and 100% guarantee that the contractors who work for us charge less than they do to the public (loads of work from us) and if the work is poor, they don't get any more. Buying power has it's advantages and we charge landlords at cost, no loading. As for renewal on an introduction type arrangement, you'll see one big firm in London got in proper trouble for doing what you say. Don't tar us all with the same brush!! Feel free to use them as a tenant finder / reference checker, but they will still charge upwards of 8% of each and every month's rent, even if the tenant renews. This they will take out of your first month's rental.
justin220 said:
Now the plan is for him to provide the cash deposit, and me to take the mortgage in my name (I presume there is no problems so far?)
1 - Since the mortgage will be in my name, will the rent have to come to me? And how much of it is taxable? I am a high rate tax payer, where my father is not. I work away from home so ideally I'd like to be a 'silent partner' and almost have nothing to do with it.
2 - How much roughly are the landlord costs? Insurances/certificates etc?
I would advise putting the house in both names for a couple of reasons. Any profits from your rent can be divided by both 'tax codes' and any capital gains after selling will also be less as each of you will have a personal allowance.1 - Since the mortgage will be in my name, will the rent have to come to me? And how much of it is taxable? I am a high rate tax payer, where my father is not. I work away from home so ideally I'd like to be a 'silent partner' and almost have nothing to do with it.
2 - How much roughly are the landlord costs? Insurances/certificates etc?
Also, think of this senario. You put the house all in your name and in a couple years down the line your GF/wife gets the hump with you and leaves you, and claims half of all your assets, legally she would be entitled to half of this house and not just a quarter if it was in your Dad's name as well. Hopefully it wouldn't happen, but it could. And, even worse, if you dies suddenly, your partner could suddenly own the house outright and legally cut all ties with your Dad.
When we rented our 2nd house out, we used an agent who charged 12.5% + VAT and advertised for tenants, saving us the hassle. They also had the 'clout' to withold deposits at the end of tenancies if anything was damaged. It saves a lot of hassle. They also arranged yearly gas checks etc. We told our lenders and insurance company we were renting the house but only insured it for buildings cover.
Hope this helps.
LFB531 said:
james12345 said:
Personally I would say if you're going to be local to the property, and you and / or your father are okay at DIY, I would definitely *not* go with fully managed. The letting agents will send an "approved tradesman" who will charge over the odds and do a sub-standard job, in my experience.
Feel free to use them as a tenant finder / reference checker, but they will still charge upwards of 8% of each and every month's rent, even if the tenant renews. This they will take out of your first month's rental.
A bit sweeping there James although I accept it's your experience.!! I run my own management Firm and 100% guarantee that the contractors who work for us charge less than they do to the public (loads of work from us) and if the work is poor, they don't get any more. Buying power has it's advantages and we charge landlords at cost, no loading. As for renewal on an introduction type arrangement, you'll see one big firm in London got in proper trouble for doing what you say. Don't tar us all with the same brush!! Feel free to use them as a tenant finder / reference checker, but they will still charge upwards of 8% of each and every month's rent, even if the tenant renews. This they will take out of your first month's rental.
This
I also run my own lettings company and guarantee any contractors work is at very good rates with no loading. Full management service is 9% of monthly rent and our renewals fee is set at £25 so not all management agents are the same!
james12345 said:
Personally I would say if you're going to be local to the property, and you and / or your father are okay at DIY, I would definitely *not* go with fully managed. The letting agents will send an "approved tradesman" who will charge over the odds and do a sub-standard job, in my experience.
Feel free to use them as a tenant finder / reference checker, but they will still charge upwards of 8% of each and every month's rent, even if the tenant renews. This they will take out of your first month's rental.
We used an agent for our first ever tenants, but since then have found that local paper / Gumtree are suitable for finding tenants. Interview any potentials and go with your gut feeling, and use a reference / credit checking service. See landlordzone for loads and loads of info, plus you can register with them for the credit checks etc.
Absolutely agree, if a landlord can carry out DIY and lives local to the property, then self management is the way to go. Letting Agents, Property Management Companies and Property Maintenance Companies are to be avoided at ALL costs, particularly if the OP is looking to achieve a variable rental profit from the capital invested. Feel free to use them as a tenant finder / reference checker, but they will still charge upwards of 8% of each and every month's rent, even if the tenant renews. This they will take out of your first month's rental.
We used an agent for our first ever tenants, but since then have found that local paper / Gumtree are suitable for finding tenants. Interview any potentials and go with your gut feeling, and use a reference / credit checking service. See landlordzone for loads and loads of info, plus you can register with them for the credit checks etc.
As for the OP and his father sharing equally the rental profits, the same can be achieved even though the father is not on the property’s title deeds, that same financial arrangement/agreement being set out from the start, with no deviation from the same, that is once the arrangement/s is/are in place
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