House letting for beginners
Discussion
Currently I own one house outright and live in it.
This year two options have presented themselves and I need to investigate the ramifications.
First, I could bail out of equities at some point this year and buy a small second property for rental. There are some very good rentable places nearby for £130-150K and would return up to £600pcm rent (less 10% management fees if I go that route). I'd buy the place outright so there'd be no mortgage to pay.
Second, it looks as if my mother will have to stay in a care home (I'll know definitely in a few weeks) and so her house will be vacant. I don't want to sell in the current climate so thought I'd tidy it up and try to rent it for a while. It's her property so I suppose the rent would be hers too, but at least it would help towards the care home costs. I have EPA.
I'd be interested to know the legal and accounting aspects of both options, or at least a link to further information. I'm self-employed so already keep books and have a bookeeper/accountant, but they are not expert in this area. Or do I just sign everything over to a letting agent and let them do everything? Thanks all!
This year two options have presented themselves and I need to investigate the ramifications.
First, I could bail out of equities at some point this year and buy a small second property for rental. There are some very good rentable places nearby for £130-150K and would return up to £600pcm rent (less 10% management fees if I go that route). I'd buy the place outright so there'd be no mortgage to pay.
Second, it looks as if my mother will have to stay in a care home (I'll know definitely in a few weeks) and so her house will be vacant. I don't want to sell in the current climate so thought I'd tidy it up and try to rent it for a while. It's her property so I suppose the rent would be hers too, but at least it would help towards the care home costs. I have EPA.
I'd be interested to know the legal and accounting aspects of both options, or at least a link to further information. I'm self-employed so already keep books and have a bookeeper/accountant, but they are not expert in this area. Or do I just sign everything over to a letting agent and let them do everything? Thanks all!
Simpo Two said:
Currently I own one house outright and live in it.
This year two options have presented themselves and I need to investigate the ramifications.
First, I could bail out of equities at some point this year and buy a small second property for rental. There are some very good rentable places nearby for £130-150K and would return up to £600pcm rent (less 10% management fees if I go that route). I'd buy the place outright so there'd be no mortgage to pay.
Second, it looks as if my mother will have to stay in a care home (I'll know definitely in a few weeks) and so her house will be vacant. I don't want to sell in the current climate so thought I'd tidy it up and try to rent it for a while. It's her property so I suppose the rent would be hers too, but at least it would help towards the care home costs. I have EPA.
I'd be interested to know the legal and accounting aspects of both options, or at least a link to further information. I'm self-employed so already keep books and have a bookeeper/accountant, but they are not expert in this area. Or do I just sign everything over to a letting agent and let them do everything? Thanks all!
Why are you bailing out of equities?This year two options have presented themselves and I need to investigate the ramifications.
First, I could bail out of equities at some point this year and buy a small second property for rental. There are some very good rentable places nearby for £130-150K and would return up to £600pcm rent (less 10% management fees if I go that route). I'd buy the place outright so there'd be no mortgage to pay.
Second, it looks as if my mother will have to stay in a care home (I'll know definitely in a few weeks) and so her house will be vacant. I don't want to sell in the current climate so thought I'd tidy it up and try to rent it for a while. It's her property so I suppose the rent would be hers too, but at least it would help towards the care home costs. I have EPA.
I'd be interested to know the legal and accounting aspects of both options, or at least a link to further information. I'm self-employed so already keep books and have a bookeeper/accountant, but they are not expert in this area. Or do I just sign everything over to a letting agent and let them do everything? Thanks all!
I'm looking to purchase a buy to let this year and have been advised by Banham Graham accountants in gorleston.
From what i remember, an interest only mortgage is better as the rent pays the interest and you won't therefore pay tax unless there is a surplus, and if there is, there are ways to offset this.
I've also been advised by a mortgage advisor to use an offset mortgage to buy a property. Again, if there is a suplus, you can pay back the loan earlier and it does make quite a signifcant difference to the term and interest rate if you can overpay. He's very good and if you need his details, just PM me, he is based just outside Norwich.
You will also need to get electrical and gas safety certificates and have additional insurance on the property.
Cheers
From what i remember, an interest only mortgage is better as the rent pays the interest and you won't therefore pay tax unless there is a surplus, and if there is, there are ways to offset this.
I've also been advised by a mortgage advisor to use an offset mortgage to buy a property. Again, if there is a suplus, you can pay back the loan earlier and it does make quite a signifcant difference to the term and interest rate if you can overpay. He's very good and if you need his details, just PM me, he is based just outside Norwich.
You will also need to get electrical and gas safety certificates and have additional insurance on the property.
Cheers
You need an EPC done too before you can rent it out. Also bear in mind you are going to have to do credit checks and get references for tenants and well as find them in the first place, show them round, do regular condition checks, chase outstanding rents etc. For the sake of maybe 7% of the monthly rent an agent will do all this for you.
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