PSA: Anyone that rents their property out

joneve

ToneControl said:

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.

I'm still not 100% clear, but I *think* I'm unaffected.

My Income from rent is £7500 per year (or £3750 as technically half is or would be declared as my wife's). We pay around £4k in interest on our mortgage + £1200 service charge and management fees, leaving £2300 net profit, so I don't think things change , but I'll be calling HMRC just in case  

joneve

Well, just done a self-assessment check online; https://www.gov.uk/check-if-you-need-a-tax-return and because I'm under the £2500 threshold after allowable deductions, it appears I'm still unaffected. 

But good to be aware for when I've paid off enough of the mortgage that the allowable deduction of the mortgage interest won't keep me below the threshold, I'll need to be aware. 

robgilmo

We were evicted last Christmas because our land lord wanted to turn our home of 6 years into a holiday let, 6 years , never missed a rent payment, never late with the rent, never had any problems.
We found ourselves at the mercy of estate agents, 3 attempts at renting a property lost us nearly 1100 quid, none refundable, why? Because when we were vetted what they didn't tell us was we had to be earning 42k a year to be able to afford £900 a month rent! If I was earning 42k a year I wouldn't be renting. Even though we had 6 clean years under our belt!

We turned to open rent, our present land lord after a meeting offered to rent us his property, however, open rent offered a vetting system for their rent insurance, we came back as unsuitable, why? Because we didn't earn 42k a year, it was the same company the estate agents were using!

Our land lord decided to take a chance on us (if he didn't we would have been homeless, a family with  two young kids, one a newborn) because I managed to convince him that keeping a roof over my family's head was my priority in life. He gave us a year. A year later and we are still here, he has given us another year.

You cant imagine what its like not knowing where you are going to be living in a years time, but those vetting company's that provide rental insurance, they also put legit familys who can afford to pay the rent on the street, they are nothing more than vultures. I have only bad things to say about estate agents.

joneve

robgilmo said:

We were evicted last Christmas because our land lord wanted to turn our home of 6 years into a holiday let, 6 years , never missed a rent payment, never late with the rent, never had any problems.
We found ourselves at the mercy of estate agents, 3 attempts at renting a property lost us nearly 1100 quid, none refundable, why? Because when we were vetted what they didn't tell us was we had to be earning 42k a year to be able to afford £900 a month rent! If I was earning 42k a year I wouldn't be renting. Even though we had 6 clean years under our belt!

We turned to open rent, our present land lord after a meeting offered to rent us his property, however, open rent offered a vetting system for their rent insurance, we came back as unsuitable, why? Because we didn't earn 42k a year, it was the same company the estate agents were using!

Our land lord decided to take a chance on us (if he didn't we would have been homeless, a family with  two young kids, one a newborn) because I managed to convince him that keeping a roof over my family's head was my priority in life. He gave us a year. A year later and we are still here, he has given us another year.

You cant imagine what its like not knowing where you are going to be living in a years time, but those vetting company's that provide rental insurance, they also put legit familys who can afford to pay the rent on the street, they are nothing more than vultures. I have only bad things to say about estate agents.

That's why I liked OpenRent. Everything they offer is optional, and the reference check service they offer is fine, but only really gives a legitimate check for being able to have the rent guarantee insurance if landlord wants to pay for it, as you say. But if you want to take a chance on the tenant, you can. I've used their full service as it's the first time I've rent to someone I don't know, but going forward, I may not opt for that as and when we go ahead with another tenant in the future.  

Glad it all worked out for you! Estate Agents can go fuck themselves. 

robgilmo

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. 

This is something I don't understand, why do landlords begrudge putting their own money so to speak into their investment? You are basically getting a free house for very little effort, and when say a cooker breaks you go out and buy the cheapest, shittiest replacement you can find, you paint everything magnolia because its cheap, you do everything as cheaply as you can, surely this isn't how you run a business, we run a small business at home, we put as much money as we can into it because its in our best interests to do so, I never understood why land lords begrudge spending money on their investments.
Not having a go guys, I just think if you cant spend money on your property's why are you even renting them out?

robgilmo

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. 

This is something I don't understand, why do landlords begrudge putting their own money so to speak into their investment? You are basically getting a free house for very little effort, and when say a cooker breaks you go out and buy the cheapest, shittiest replacement you can find, you paint everything magnolia because its cheap, you do everything as cheaply as you can, surely this isn't how you run a business, we run a small business at home, we put as much money as we can into it because its in our best interests to do so, I never understood why land lords begrudge spending money on their investments.
Not having a go guys, I just think if you cant spend money on your property's why are you even renting them out?

ToneControl

joneve said:

Well, just done a self-assessment check online; https://www.gov.uk/check-if-you-need-a-tax-return and because I'm under the £2500 threshold after allowable deductions, it appears I'm still unaffected. 

But good to be aware for when I've paid off enough of the mortgage that the allowable deduction of the mortgage interest won't keep me below the threshold, I'll need to be aware. 

I'm not sure how the consequences work out, but it sounds like they add your salary and the rent (after other expenses), and that determines your tax band, etc. and then you have a tax credit to apply against paying the tax. Best to call HMRC as you say.

ToneControl

robgilmo said:

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. 

This is something I don't understand, why do landlords begrudge putting their own money so to speak into their investment? You are basically getting a free house for very little effort, and when say a cooker breaks you go out and buy the cheapest, shittiest replacement you can find, you paint everything magnolia because its cheap, you do everything as cheaply as you can, surely this isn't how you run a business, we run a small business at home, we put as much money as we can into it because its in our best interests to do so, I never understood why land lords begrudge spending money on their investments.
Not having a go guys, I just think if you cant spend money on your property's why are you even renting them out?

I have been trying: each house I spend loads on, new bathrooms, new kitchens, etc. £9k on one small house
Each house has then been in better condition than any flat I rented, and all 3 houses I have bought to live in as our own house over the years.
It's been very disheartening that half of them have then been trashed, sometimes after only 2 months rent being paid.

I don't know how to assess how much average landlords spend, but the letting agents always advise a proper refurb

robgilmo

I bet the agents recommend tradesmen as well, when I was working on the tools it was a much higher rate for letting agents from what I heard. Thats the problem with renting, I try and repair things as if it were my own house but Im pretty competant at most things, I can see how a lot of people wouldnt even try, after all its not their house and they know it isnt their responsability.

joneve

robgilmo said:

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. 

This is something I don't understand, why do landlords begrudge putting their own money so to speak into their investment? You are basically getting a free house for very little effort, and when say a cooker breaks you go out and buy the cheapest, shittiest replacement you can find, you paint everything magnolia because its cheap, you do everything as cheaply as you can, surely this isn't how you run a business, we run a small business at home, we put as much money as we can into it because its in our best interests to do so, I never understood why land lords begrudge spending money on their investments.
Not having a go guys, I just think if you cant spend money on your property's why are you even renting them out?

Sounds like you are FWIW. 

Anyway, I personally don't "begrudge putting my own money into my investment", as if doesn't feel like a nice place to live, people won't want to live there. But I'm not going to replace everything with top of the range finishings, for the very reason Tone Control states. People can be right cunts, with zero fucks given about where they're living, if it's not "theirs". So it ends up getting trashed to shit. Cheers then. This is partly why I vet people myself, because agents will be happy putting any old people in there, as long as they get their money. So it has (so far) helped reduced the risk of this and we've been lucky with our tenants thus far. 

Just so you're not concerned about the well-being of my tenants, we'll make sure we replace the carpets with hard wearing, but decent quality, middle of the road stuff, so that it absorbs the noise well, and lasts for a while. Also, we are happy for our tenants to paint the walls to personalise and make the place feel like home if they wish. 

littlethoughts

Thanks, good info.

robgilmo

joneve said:

robgilmo said:

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. 

This is something I don't understand, why do landlords begrudge putting their own money so to speak into their investment? You are basically getting a free house for very little effort, and when say a cooker breaks you go out and buy the cheapest, shittiest replacement you can find, you paint everything magnolia because its cheap, you do everything as cheaply as you can, surely this isn't how you run a business, we run a small business at home, we put as much money as we can into it because its in our best interests to do so, I never understood why land lords begrudge spending money on their investments.
Not having a go guys, I just think if you cant spend money on your property's why are you even renting them out?

Sounds like you are FWIW. 

Anyway, I personally don't "begrudge putting my own money into my investment", as if doesn't feel like a nice place to live, people won't want to live there. But I'm not going to replace everything with top of the range finishings, for the very reason Tone Control states. People can be right cunts, with zero fucks given about where they're living, if it's not "theirs". So it ends up getting trashed to shit. Cheers then. This is partly why I vet people myself, because agents will be happy putting any old people in there, as long as they get their money. So it has (so far) helped reduced the risk of this and we've been lucky with our tenants thus far. 

Just so you're not concerned about the well-being of my tenants, we'll make sure we replace the carpets with hard wearing, but decent quality, middle of the road stuff, so that it absorbs the noise well, and lasts for a while. Also, we are happy for our tenants to paint the walls to personalise and make the place feel like home if they wish. 

Sorry fella, it did look like that, my apologies. I guess when you rent and really dont have a choice who you rent from you do tend to meet a lot of arse hole land lords, I could tell you some stories that would make you cringe, Round these parts most houses are second homes and holiday lets which in my view is totally wrong, rich londoners buying up village propertys and big land owners wanting to own everything, meanwhile hard working familys struggle to keep a roof over their heads, thats how countryside villages become holiday resorts. Its a massive problem in these parts.

tampaxboo

@robgilmo this is an interesting read on the theme you are touching on. may amuse.

https://www.theguardian.com/cities/2016/apr/30/generation-rent-can-your-landlord-be-your-friend

joneve

robgilmo said:

joneve said:

robgilmo said:

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. 

This is something I don't understand, why do landlords begrudge putting their own money so to speak into their investment? You are basically getting a free house for very little effort, and when say a cooker breaks you go out and buy the cheapest, shittiest replacement you can find, you paint everything magnolia because its cheap, you do everything as cheaply as you can, surely this isn't how you run a business, we run a small business at home, we put as much money as we can into it because its in our best interests to do so, I never understood why land lords begrudge spending money on their investments.
Not having a go guys, I just think if you cant spend money on your property's why are you even renting them out?

Sounds like you are FWIW. 

Anyway, I personally don't "begrudge putting my own money into my investment", as if doesn't feel like a nice place to live, people won't want to live there. But I'm not going to replace everything with top of the range finishings, for the very reason Tone Control states. People can be right cunts, with zero fucks given about where they're living, if it's not "theirs". So it ends up getting trashed to shit. Cheers then. This is partly why I vet people myself, because agents will be happy putting any old people in there, as long as they get their money. So it has (so far) helped reduced the risk of this and we've been lucky with our tenants thus far. 

Just so you're not concerned about the well-being of my tenants, we'll make sure we replace the carpets with hard wearing, but decent quality, middle of the road stuff, so that it absorbs the noise well, and lasts for a while. Also, we are happy for our tenants to paint the walls to personalise and make the place feel like home if they wish. 

Sorry fella, it did look like that, my apologies. I guess when you rent and really dont have a choice who you rent from you do tend to meet a lot of arse hole land lords, I could tell you some stories that would make you cringe, Round these parts most houses are second homes and holiday lets which in my view is totally wrong, rich londoners buying up village propertys and big land owners wanting to own everything, meanwhile hard working familys struggle to keep a roof over their heads, thats how countryside villages become holiday resorts. Its a massive problem in these parts.

Ha, no need to apologise mate. I know exactly what you mean, and it's really disgraceful. As I said earlier, we rent our flat out as our hand was forced, so we do so right on or just below market value, because I'd rather have someone in there and make zero money, than no one at all. We are just looking to cover our costs at this point but there's absolutely no reason to treat your tenants like complete scumbags. 

As it turns out, I'll need to replace the carpet in the hallway as the last tenant's cat decided to shred the carpet by the front door -____- 

Not really what I need with a new tenant moving in on Friday! Oh well.  

robgilmo

joneve said:

robgilmo said:

joneve said:

robgilmo said:

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. 

This is something I don't understand, why do landlords begrudge putting their own money so to speak into their investment? You are basically getting a free house for very little effort, and when say a cooker breaks you go out and buy the cheapest, shittiest replacement you can find, you paint everything magnolia because its cheap, you do everything as cheaply as you can, surely this isn't how you run a business, we run a small business at home, we put as much money as we can into it because its in our best interests to do so, I never understood why land lords begrudge spending money on their investments.
Not having a go guys, I just think if you cant spend money on your property's why are you even renting them out?

Sounds like you are FWIW. 

Anyway, I personally don't "begrudge putting my own money into my investment", as if doesn't feel like a nice place to live, people won't want to live there. But I'm not going to replace everything with top of the range finishings, for the very reason Tone Control states. People can be right cunts, with zero fucks given about where they're living, if it's not "theirs". So it ends up getting trashed to shit. Cheers then. This is partly why I vet people myself, because agents will be happy putting any old people in there, as long as they get their money. So it has (so far) helped reduced the risk of this and we've been lucky with our tenants thus far. 

Just so you're not concerned about the well-being of my tenants, we'll make sure we replace the carpets with hard wearing, but decent quality, middle of the road stuff, so that it absorbs the noise well, and lasts for a while. Also, we are happy for our tenants to paint the walls to personalise and make the place feel like home if they wish. 

Sorry fella, it did look like that, my apologies. I guess when you rent and really dont have a choice who you rent from you do tend to meet a lot of arse hole land lords, I could tell you some stories that would make you cringe, Round these parts most houses are second homes and holiday lets which in my view is totally wrong, rich londoners buying up village propertys and big land owners wanting to own everything, meanwhile hard working familys struggle to keep a roof over their heads, thats how countryside villages become holiday resorts. Its a massive problem in these parts.

Ha, no need to apologise mate. I know exactly what you mean, and it's really disgraceful. As I said earlier, we rent our flat out as our hand was forced, so we do so right on or just below market value, because I'd rather have someone in there and make zero money, than no one at all. We are just looking to cover our costs at this point but there's absolutely no reason to treat your tenants like complete scumbags. 

As it turns out, I'll need to replace the carpet in the hallway as the last tenant's cat decided to shred the carpet by the front door -____- 

Not really what I need with a new tenant moving in on Friday! Oh well.  

Wooden flooring mate, as a tenant I can tell you carpets are the worst, especially with kids, its a big worry, but I hate carpets anyway.

joneve

robgilmo said:

joneve said:

robgilmo said:

joneve said:

robgilmo said:

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. 

This is something I don't understand, why do landlords begrudge putting their own money so to speak into their investment? You are basically getting a free house for very little effort, and when say a cooker breaks you go out and buy the cheapest, shittiest replacement you can find, you paint everything magnolia because its cheap, you do everything as cheaply as you can, surely this isn't how you run a business, we run a small business at home, we put as much money as we can into it because its in our best interests to do so, I never understood why land lords begrudge spending money on their investments.
Not having a go guys, I just think if you cant spend money on your property's why are you even renting them out?

Sounds like you are FWIW. 

Anyway, I personally don't "begrudge putting my own money into my investment", as if doesn't feel like a nice place to live, people won't want to live there. But I'm not going to replace everything with top of the range finishings, for the very reason Tone Control states. People can be right cunts, with zero fucks given about where they're living, if it's not "theirs". So it ends up getting trashed to shit. Cheers then. This is partly why I vet people myself, because agents will be happy putting any old people in there, as long as they get their money. So it has (so far) helped reduced the risk of this and we've been lucky with our tenants thus far. 

Just so you're not concerned about the well-being of my tenants, we'll make sure we replace the carpets with hard wearing, but decent quality, middle of the road stuff, so that it absorbs the noise well, and lasts for a while. Also, we are happy for our tenants to paint the walls to personalise and make the place feel like home if they wish. 

Sorry fella, it did look like that, my apologies. I guess when you rent and really dont have a choice who you rent from you do tend to meet a lot of arse hole land lords, I could tell you some stories that would make you cringe, Round these parts most houses are second homes and holiday lets which in my view is totally wrong, rich londoners buying up village propertys and big land owners wanting to own everything, meanwhile hard working familys struggle to keep a roof over their heads, thats how countryside villages become holiday resorts. Its a massive problem in these parts.

Ha, no need to apologise mate. I know exactly what you mean, and it's really disgraceful. As I said earlier, we rent our flat out as our hand was forced, so we do so right on or just below market value, because I'd rather have someone in there and make zero money, than no one at all. We are just looking to cover our costs at this point but there's absolutely no reason to treat your tenants like complete scumbags. 

As it turns out, I'll need to replace the carpet in the hallway as the last tenant's cat decided to shred the carpet by the front door -____- 

Not really what I need with a new tenant moving in on Friday! Oh well.  

Wooden flooring mate, as a tenant I can tell you carpets are the worst, especially with kids, its a big worry, but I hate carpets anyway.

Aye. Can be a bit of a nightmare in a flat though, for noise absorption. I used to like carpets, until I got a dog