beermat BTL question

[BERGS2]

As our buyer seems to be pulling out of our house sale - we're looking into the logistics of letting out our current home as we rent a seperate property.

achievable rent for our house is circa £1200 pcm

without going into the various intricacies of repayment interest/wear & tear/ voids etc - what is the beermat return we're likeyl to see (gross) per year?

Have been advised 75% - does this seem reasonable?

Thanks in advance!

BERGS (the reluctant BTL er)

[BERGS2]

for clarity 75% = 75% of gross annual rent achieved (net of voids/repairs & fees)

anyone?

[B17NNS]

75% doesn't sound unreasonable assuming all goes as it should.

However the figure could be anything between a minus percentage if you are very unlucky and closer to 90% if you get a good tenant and are prepared to do much of the legwork yourself.

Best to work out your actual costs and arrive at an informed figure in my opinion.

Costs to include would be:

Electrical inspection) and any remedial works to bring the system up to standard.

Gas Safe inspection and potential remedials.

Energy performance certificate.

Agents fees:

Option 1: Find tenant yourself, vet them, manage any repairs yourselves - cost minimal.

Option 2: Agent finds tenant and vets them. Cost usually about 1 months rent.

Option 3: Agent finds tenant, vets them and collects rent. You manage any maintenance issues. Percentage of rent each month.

Option 4: Agent finds tenant, vets them, collects rent and arranges tradesmen as required for any repairs. Percentage of rent each month plus some potentially big bils.

Good luck!

[BERGS2]

thanks for that -

so - If (for ease of the math) - we take 1000pcm on the house = 12k/year income

would i be correct in saying the tax liability is that 12k:

minus interest on mortgage -
minus fees
minus wear & tear...

about £7k or so? As per the title - beermat answers fine!

thanks in advance!

[neilsie]

that is correct. Most costs against the property are tax deductible.

Repayments against the outstanding capital are not.

[mechsympathy]

neilsie said:

Most costs against the property are tax deductible.

Did I read somewhere that that's changing next year?

[zcacogp]

mechsympathy said:

Did I read somewhere that that's changing next year?

Dunno, but


Oli.

[mechsympathy]

Can't remember where or what (it was probably here) as I don't have anything other than a passing interest, sorry. I just at Winky moving the goalposts to do over the people who fed the boom.