Questions on Renting Property

[Anonymous]

Hi

I would like to rent my property out. Do I legally need to notify my mortgage provider? Also can I deduct entire mortgage payments from rental income for purposes of tax or only the interest?

 

[Anonymous]

You need to notify them and others. You may find its against your terms too. Buy to let mortgages come at higher rates in case relevant.

A lot of people seem to be being seduced by these naive tv programs about letting out property.

NT

 

[Anonymous]

I agree with NT - it will be in your terms and conditions of mortgage, read the small print! Also your insurers will need to be informed if this is no longer your private residence.

I have friends caught out by this one - bought two cottages (attached) and decided to rent one out - holiday lets, and longer lets in winter - and the mortgage company insisted on charging a higher rate of interest for the 'commercial' property.

With regard to tax - if you decide to go ahead, talk to an accountant. Even a half-hour paid for appointment to seek advice will be worthwhile - there may be costs you can offset against your tax.

 

[Anonymous]

I presumed the existing insurance would simply not be valid for the new use, but perhaps not so - OP needs to find out.

NT

 

[Bluenap]

Also if your property is leasehold not freehold you have to ask there permission but they dont usually have a problem with it

 

[Bluenap]

Also if your property is leasehold not freehold you have to ask there permission but they dont usually have a problem with it

 

[Moo]

Join your local branch of the Landlords' Association. They are a good source of up-to-date information, and often have a tame insurance broker who gives discounts to members.

And be very careful about choosing an agent, if you decide not to manage the property yourself. Member of ARLA, and all that, and get personal recommendations if you can.

We have rented out a small house for nearly twelve years, with absolutely everything done by an excellent agent (fees are tax-deductable). The result has been only two excellent tenants in that time, with approximately two hours gap between them (I gather from other local landlords that this is par for the course with this particular agent).

Another advantage of using an agent is that when Self-Assessment time comes around we just ring him and ask for the year's statement and copy it all into the form.

ps - It's much less hassle if you rent the washing machine. If anything goes wrong, the tenant simply rings up the firm and the thing is either repaired or replaced at no extra cost to you (and the rent is yet another tax-deductable expense).

 

[NT]

Moo is lucky wrt agents, I hear mostly bad stories.

Renting appliances may be cheaper, but its a lot more expensive. Take a simple example of a 14" tv, rent £5/month or buy (used, good condition) £25. Rent costs over twice the price per year, making it cheaper just to buy a replacement.


NT

 

[worms]

And if you are in Scotland, it is now a requirement to register as a landlord with the local authority (unless the property is for holiday letting).

 

[Moo]

Yes NT, I do know how lucky I am. I've heard some pretty awful stories from tenants and from landlords. The agents I use are a small (2nd generation) family firm, which may be one factor.

Regarding renting equipment, I agree with you about things like televisions, but washing machines can be tricky beasts even with the most careful owners. Tenants can be very cruel to them.

 

[NT]

The worst story I heard was an agent that screwed up the letting agreement, and had it not been for some fortuitous happenstance would have granted the tenant a license, ie made them unevictable for life.


> Regarding renting equipment, I agree with you about things like televisions, but washing machines can be tricky beasts even with the most careful owners. Tenants can be very cruel to them.

yes, as they can to just about everything Always finding new ways to screw stuff up.

£50-£70 buys a clean used machine, how long does it take to pay that much in washer rental? Appliance rentals make a nice margin.

You pay for the convenience of making a phonecall instead of buying the paper, looking at a couple of machines, carting one home and putting it in. That works fine for LLs with no mortgage, but those still buying cant generally afford such things.

With tenants, avoiding plastic drummed machines makes sense, the drums on those can be shattered by stray small metal objects.


NT

 

[Moo]

On the other hand, from the tenant's point of view it's so much easier to make one 'phone call and know the machine will be sorted the same day, rather than waiting around for the landlord to get the next edition of the local free-ads paper, collect the replacement machine, sort out the plumbing, and take away the old machine.
Anyway, how does one 'cart a washing machine home' without a pretty capacious vehicle (and some hefty muscle, to boot)?

 

[NT]

quote="Moo

> Anyway, how does one 'cart a washing machine home' without a pretty capacious vehicle (and some hefty muscle, to boot)?

estate car, van, or taxi. Actually the last but one I got was bought from a man in Egypt and carried home

Plumbing is only a case of pushing the outlet pipe in place and screwing the hose connector on, nowt challenging!

Its alright for these rich kids (cue violins)


NT

 

[Moo]

" estate car, van, or taxi. "

My point, exactly. We ain't got the first, and the other two cost money.
It's the same sort of economics that some friends of mine used when they'd do a fifteen-mile round car journey to a supermarket ("it's all so much cheaper") rather than walk to the local shops.

As you say, it's all right for these rich kids.