PSA: Anyone that rents their property out

joneve

We recently found ourselves in the stressful position of our current tenant in our flat of nearly 3 years, serving notice to move close to work...the timing of which could not be worse, as we are due our first child in a little over 4 weeks, so money is going to be tight and we don't have an extra £550 a month for the mortgage on the flat if we don't have a tenant. Estate Agent fees are fucking extortionate, so didn't fancy that (having done it all privately ourselves previously), but didn't know what to do to get advertising exposure to ensure we get a tenant with a little over a month's notice....

Step up, OpenRent.co.uk - Advertised the property there using their 7 day free trial, which gives advertisement on Zoopla and RightMove also and within 2 days had 6 or 7 enquiries. 

This website is absolutely fucking brilliant. You can manage your enquiries, schedule viewings and even do pre-enquiry screening. 

I'd short listed 3 people, arranged viewings, and settled on a tenant last week who agreed to move in. 

EVERYTHING is done through OpenRent, reference checks, deposit handling, AST generation, it's been an absolute breeze, for someone who manages it themselves. They offer Gas/Leccy safety checks and Rent Guarantee Insurance etc. 

No, I don't work for OpenRent, but their services have seriously impressed me, and has made this whole stressful process an absolute breeze for both me, and the tenant who's moving in. 

highly recommended for anyone looking to rent their flat out and wants to avoid ridiculous estate agent fees. 

Winny_Pooh

Yep, Purple Bricks do a similar thing with the difference being that they have agents who do viewings. 

Ro_S

nice result

iain.reverb

joneve said:

We recently found ourselves in the stressful position of our current tenant in our flat of nearly 3 years, serving notice to move close to work...the timing of which could not be worse, as we are due our first child in a little over 4 weeks, so money is going to be tight and we don't have an extra £550 a month for the mortgage on the flat if we don't have a tenant. Estate Agent fees are fucking extortionate, so didn't fancy that (having done it all privately ourselves previously), but didn't know what to do to get advertising exposure to ensure we get a tenant with a little over a month's notice....

Step up, OpenRent.co.uk - Advertised the property there using their 7 day free trial, which gives advertisement on Zoopla and RightMove also and within 2 days had 6 or 7 enquiries. 

This website is absolutely fucking brilliant. You can manage your enquiries, schedule viewings and even do pre-enquiry screening. 

I'd short listed 3 people, arranged viewings, and settled on a tenant last week who agreed to move in. 

EVERYTHING is done through OpenRent, reference checks, deposit handling, AST generation, it's been an absolute breeze, for someone who manages it themselves. They offer Gas/Leccy safety checks and Rent Guarantee Insurance etc. 

No, I don't work for OpenRent, but their services have seriously impressed me, and has made this whole stressful process an absolute breeze for both me, and the tenant who's moving in. 

highly recommended for anyone looking to rent their flat out and wants to avoid ridiculous estate agent fees. 

Used them for the past year, to find tenants, I only used it to advertise and screen/credit check tenants. Its a fantastic service and well worth the £30. Im pretty sure that they do a cheap referral scheme if anyone is interested to use them

joneve

iain.reverb said:

joneve said:

We recently found ourselves in the stressful position of our current tenant in our flat of nearly 3 years, serving notice to move close to work...the timing of which could not be worse, as we are due our first child in a little over 4 weeks, so money is going to be tight and we don't have an extra £550 a month for the mortgage on the flat if we don't have a tenant. Estate Agent fees are fucking extortionate, so didn't fancy that (having done it all privately ourselves previously), but didn't know what to do to get advertising exposure to ensure we get a tenant with a little over a month's notice....

Step up, OpenRent.co.uk - Advertised the property there using their 7 day free trial, which gives advertisement on Zoopla and RightMove also and within 2 days had 6 or 7 enquiries. 

This website is absolutely fucking brilliant. You can manage your enquiries, schedule viewings and even do pre-enquiry screening. 

I'd short listed 3 people, arranged viewings, and settled on a tenant last week who agreed to move in. 

EVERYTHING is done through OpenRent, reference checks, deposit handling, AST generation, it's been an absolute breeze, for someone who manages it themselves. They offer Gas/Leccy safety checks and Rent Guarantee Insurance etc. 

No, I don't work for OpenRent, but their services have seriously impressed me, and has made this whole stressful process an absolute breeze for both me, and the tenant who's moving in. 

highly recommended for anyone looking to rent their flat out and wants to avoid ridiculous estate agent fees. 

Used them for the past year, to find tenants, I only used it to advertise and screen/credit check tenants. Its a fantastic service and well worth the £30. Im pretty sure that they do a cheap referral scheme if anyone is interested to use them

Yea, I went for the £49 full rent now service so I didn't have to faff around with trying to find an AST, and they can deal with the deposit, which is one less thing for us to worry about. The only thing I "don't" like is the fact we don't receive first month's rent until 14 days after move in, but it's a small price to pay to have everything else sorted for me. 

They also over really competitively price rent guarantee insurance too (next cheapest I found was £40 more than theirs) and the cover seems good/standard. 

but the advertising only service for £30 is money well spent. 

Snap

cheers jon, we've just served notice on our estate agent who was managing it. Couldn't see what they were doing for £70 a month tbh

thomasross20

I don't do this but I can see how this service is "better value" than using an agent, in some ways. 

For those who do this - how many places do you have or plan to have and is the plan to rent out forever or cash in (do you get a tax hit on selling second home) or ... ? Is it more or less difficult than you thought it would be and have you seen a net benefit from it? Do you think it's "better" than dealing in shares or similar? 

Curious!

joneve

Snap said:

cheers jon, we've just served notice on our estate agent who was managing it. Couldn't see what they were doing for £70 a month tbh

If you don't mind doing the "managing" yourself (or you could probably find someone else who's not a shitty estate agent to do it for you), it essentially takes out hundreds of £ of estate agent fees for tenant search and let only services. If you want to go ahead, let me know and I'll send you a referral  

Our flat is a new build so not much to maintain other than a few things, so it's not been too bad to manage ourselves (plus we only live 15 mins away), so this has been great for us as a service and it's good for the tenant too as they don't have any estate agent fees, so it makes it more appealing. 

joneve

thomasross20 said:

I don't do this but I can see how this service is "better value" than using an agent, in some ways. 

For those who do this - how many places do you have or plan to have and is the plan to rent out forever or cash in (do you get a tax hit on selling second home) or ... ? Is it more or less difficult than you thought it would be and have you seen a net benefit from it? Do you think it's "better" than dealing in shares or similar? 

Curious!

Personally, we do it because if we sold the flat we'd lose money or if we're lucky *just about* break even on it, as we bought in late 2007, right before the crash. So we don't have a choice. Fortunately, RBS allow a "Consent to Let" clause on the mortgage, which allows us to rent it out on a residential re-payment mortgage rather than it having to be a buy-to-let. We just have to make sure that the Tenancy Agreement is no longer than 12 months (so it's just renewed each year). 

As we still have 20+ years on our mortgage, and our re-payments are about £550, we make a "profit" of £75 (ish) a month vs the mortgage repayments, but we have £70 worth of management fees to pay each month, and once we've deduced the interest paid on the property in the tax year as well as other outgoings (other ground rent/management fees, repairs etc), we fall well below the threshold of having to pay any extra tax on it. So until we get to a point where we can sell to make a profit or pay off enough that our re-payments are low and it's becoming a secondary income long term (i.e. for pension investment), then it works for us. 

Plus we're probably going to have to look at replacing carpets etc in the next five years to spruce it up a bit, so we'll need to actually put some of our own money into it if we look to keep it as a long term investment. 

thomasross20

Thanks for your honest and informative answer, @joneve ! 

ToneControl

@joneve are you aware of the tax changes that affect everyone personally letting out a property with a mortgage on it who pays higher rate tax?

https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

joneve

I am now, thank you @ToneControl ;

joneve

ToneControl said:

@joneve are you aware of the tax changes that affect everyone personally letting out a property with a mortgage on it who pays higher rate tax?

https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

That is clear as mud then. And doesn't specify now if I'll need to do a tax return or not (I don't have to at the minute, which is a bonus)...I suspect I will, which is a right fucking ball ache! I don't mind paying my share, but they seem to have just complicated it for absolutely no reason at all. Cunts. 

dindude

I'm just going through the process of selling up and getting out of the rental game (largely for the reasons @ToneControl says) but it's good to know there are some modern alternatives to the Estate Agent route - who in my 10 years of being a landlord have become ever more complacent f'wits.

joneve

dindude said:

I'm just going through the process of selling up and getting out of the rental game (largely for the reasons @ToneControl says) but it's good to know there are some modern alternatives to the Estate Agent route - who in my 10 years of being a landlord have become ever more complacent f'wits.

Yea, it's been really refreshing. If the new landlord tax laws are going to completely shaft us, then we might look to sell up. As I said before, we don't do it for profit, but because we were in negative equity. It would be nice to keep it long term for a pension income when we're older, but depends if we can make it work with the extra tax we're now going to have to pay with the allowances going completely out of the window. 

I'll call HMRC to discuss, but I'm sure they'll be absolutely zero help. 

Elwood

joneve said:

dindude said:

I'm just going through the process of selling up and getting out of the rental game (largely for the reasons @ToneControl says) but it's good to know there are some modern alternatives to the Estate Agent route - who in my 10 years of being a landlord have become ever more complacent f'wits.

Yea, it's been really refreshing. If the new landlord tax laws are going to completely shaft us, then we might look to sell up. As I said before, we don't do it for profit, but because we were in negative equity. It would be nice to keep it long term for a pension income when we're older, but depends if we can make it work with the extra tax we're now going to have to pay with the allowances going completely out of the window. 

I'll call HMRC to discuss, but I'm sure they'll be absolutely zero help. 

I've found the HMRC phoneline to be very helpful. The people on the phone weren't out to get me and were very knowledgeable. YMMV but they should be able to advise.

The current thresholds appear to be:

But you must report it on a Self Assessment tax return if it’s:

• £2,500 to £9,999 after allowable expenses
• £10,000 or more before allowable expenses

joneve

Elwood said:

joneve said:

dindude said:

I'm just going through the process of selling up and getting out of the rental game (largely for the reasons @ToneControl says) but it's good to know there are some modern alternatives to the Estate Agent route - who in my 10 years of being a landlord have become ever more complacent f'wits.

Yea, it's been really refreshing. If the new landlord tax laws are going to completely shaft us, then we might look to sell up. As I said before, we don't do it for profit, but because we were in negative equity. It would be nice to keep it long term for a pension income when we're older, but depends if we can make it work with the extra tax we're now going to have to pay with the allowances going completely out of the window. 

I'll call HMRC to discuss, but I'm sure they'll be absolutely zero help. 

I've found the HMRC phoneline to be very helpful. The people on the phone weren't out to get me and were very knowledgeable. YMMV but they should be able to advise.

The current thresholds appear to be:

But you must report it on a Self Assessment tax return if it’s:

• £2,500 to £9,999 after allowable expenses
• £10,000 or more before allowable expenses

Yep. We were under £2500 after you take off the £5k+ interest on the mortgage and management fees from last tax year, so no need to declare it, which was nice to not have that faff. 

but from that link, it sounds like there's zero threshold now? Or I've completely mis-understood it. 

ToneControl

and the rule of thumb  (as I understand it) for claiming the mortgage cost against the rent is:
if you're on higher rate tax for your job, you will effectively only be able to claim half the mortgage cost against the rent (gradually phasing in over 2-3 years)

joneve

ToneControl said:

and the rule of thumb  (as I understand it) for claiming the mortgage cost against the rent is:
if you're on higher rate tax for your job, you will effectively only be able to claim half the mortgage cost against the rent (gradually phasing in over 2-3 years)

And when you say "higher tax rate" you mean 40%? So If I'm still on the lower (standard) tax rate, nothing changes for me? 

ToneControl

joneve said:

ToneControl said:

and the rule of thumb  (as I understand it) for claiming the mortgage cost against the rent is:
if you're on higher rate tax for your job, you will effectively only be able to claim half the mortgage cost against the rent (gradually phasing in over 2-3 years)

And when you say "higher tax rate" you mean 40%? So If I'm still on the lower (standard) tax rate, nothing changes for me? 

I think so, but they make it very hard to understand the way they write it

Also I think I read that they add the gross rent to your salary to calculate your marginal rate (i.e. higher or not) that would be used for capital gains. But that wouldn't affect most people very often. I need to go and read up on this again

ToneControl

https://www.theguardian.com/money/2017/apr/01/mortgage-tax-relief-cut-doesnt-add-up-buy-to-let-landlords

https://www.landc.co.uk/mortgage-guides/tax-buy-to-let-property/

which includes the advice:

A basic rate tax payer on the face of it will not pay any more tax under the new rules, but that’s not the whole story.
The new rules change the way income is calculated. Income is now before deduction of any mortgage interest. In the above example, in 2016-17 (before the new rules), your income was £4,200. In 2020 your income is deemed to be £15,000.
For example, if a person has £35,000 of employment income and rental income of £15,000 and mortgage interest is £10,800.
• Under the old rules the net profit of £4,200 and £35,000 employment income would all be taxed at the lower rate of 20%.
• Under the new rules, from 2020, the income from rental of £15,000 and employment income of £35,000 would even after the personal allowance take the taxpayer into the higher rate tax bracket of 40%. (currently income greater then £42,385).
This increase in income could also affect claims for Child Benefit and Income Tax Credits.