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Soooooo.... Looks like I will be renting out my house. 😐
I'm sure this has been done to death on here, but can you give me your first-handed experiences. Brief pros and cons, please. Some of the pitfalls to look out for. The sort of costs incurred.
Speaking of which I've been told you don't pay income tax from the revenue generated from a property you're renting out but still paying a mortgage on... That can't be true, can it?
I will probably manage the property myself as I won't be living too far away. Not paying some ****less agent 10% to call a plumber on my behalf...
Thanks in advance.
In most cases the biggest pitfall is using a letting agent 😉 Not the most trustworthy of professions in my experience!
You pay income tax on your 'profit'. Mortgage interest is an allowable cost to offset against your revenue (rental income). Property insurance, repairs and maintenance etc are also allowable costs.
With a good tenant it can be a fairly painless exercise. A bad tenant will make you regret ever starting!
Pro: You get rent.
Cons: It may take time, you may not make a profit. You have legal requirements to make the property safe, take deposits in the correct manner, (lodge with the DPS), gas checks every 12months, etc.
Tenants don't always have the money to pay rent. Their circumstances change. They may cause accidental damage.
you don't pay income tax from the revenue generated from a property you're renting out but still paying a mortgage on... That can't be true, can it?
No it's not. But you can offset income against interest costs on your mortgage, and offset other direct expenses against your income. You'll have to file a self-assessment with HMRC.
I've just started renting our house out due to a relocation. We are using a letting agent as we have no choice. If I was more local, I would have used an agent for finding a tenant then sorted everything else myself. This is a good site [url= http://www.landlordzone.co.uk/ ]Landlordzone[/url]
You have legal requirements to make the property safe
Who decides what's safe and what's not? Does the building and its contents have to be inspected by someone?
Already have gas safety certs (I have a lodger).
My understanding is that if there's an accident due to your negligence, you are stuffed. However since landlords are by definition middle-class, you're unlikely to be sent to jail.
From experience,if tennant fails to pay rent for one month, letting agent sends letter, small amount of rent is then paid,or excuses made next months rent late, further letter, lettings agent then bombarded by letters from tenant about, damp, condensation, broken boiler, dodgy doors,etc etc.
[url= http://singletrackmag.com/forum/topic/are-you-a-landlord ]Linky[/url]
Check this out - recent thread with some good bits of advice.
Speaking of which I've been told you don't pay income tax from the revenue generated from a property you're renting out but still paying a mortgage on... That can't be true, can it?
not far off. the interest you pay on the mortgage is deducted from the income you get, and you then pay income tax on the difference (if > 0) at the appropriate rate. As said above, you'll need to file a tax return at the end of the tax year in which you start letting.
You'll also need to get permission from the mortgage lender and a suitable insurance for landlords policy.
what they don't tell you is how much it'll cost to put it right if you get a "wrong un" for a tenant who trashes the place. I had one of these, not particularly well vetted by the letting agent, who had dogs. and didn't give a damn where they did their business. Or if he paid the rent
oh and you have to ask permision and get authorisation in writing from your mortgage co, before you rent, also get tenancy insurance as well.