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I have an agent coming tomorrow from Purple Bricks to give me a valuation so will see how that pans out
Will then get a couple of others in to see what they say as well and see if there's enough money in it
Will definetly be using an agent to find tenants and take the money etc
The house is in great shape and any plumbing or minor electrical work I will handle myself. I've gutted this place and built it from the ground up over the last 15 years so know it like the back of my hand
Anything major or involving gas then I'll get someone in. I won't be letting the agent use their contractors to undertake work at hugely inflated prices either.
This place was very much like they when I moved in. Dodgy d.i.y and general cutting corners
I've rectified it all over the years and improved from there so I'll have that covered unless there's suddenly a major issue
House is pretty much ready to go. Just needs a coat of paint In the upstairs rooms.
Effects for Me & my Monkey YouTube channel Facebook Fretboard's "resident pedal supremo" - mgaw
ditto for smoke alarms now have to be hardwired - so no battery units
Then you need the energy efficiency survey to be carried out by a qualified agent - letting agent can arrange - but this will cost £50-100 - Not sure if this is required every time you get a new tennant or it is lasts for so many years
So minus agent fees, landlord insurance and tax I will still come away with some extra money. The main thing is to hold onto the house but will still generate some extra cash on top in the region of £200 and the house will still have £30,000 equity in it
Things I need to do before letting are:
Gas safety cert: £50-100
Electrical safety cert: £100
Energy rating Cert: £75-85
After that it's good to go on the rental market
Waiting to chat with brokers next week and get the ball rolling on re-mortgaging this place and release some equity as a deposit for a new home
A long way to go yet but on paper it looks ideal
The great news is that you will no longer be paying the mortgage either - Not sure if you have a interest only loan at that figure or it is paying the interest and capital - So hopefully the value goes up of the property and from now on wards it is not costing you money to 'purchase' the property
According to him the rental market is on the up at the moment. Property isn't selling well after brexit he also said that predictions are that it will drop 10% in the coming months due to brexit
So it's a buyers market and as i'm not selling that will work in my favour but also possibly against should i not get in quick as my house will also drop which will affect my equity amount and releasing it
I now have both mortgage offers in place and have put an offer on a house but we're currently in a bidding war so will see how that pans out
Got the buy to let at £400 per month interest only and will be renting it out at £800 per month. Just selecting an agent still at this time
Only downside to all of it is the colossal rate of stamp duty I've got to pay as I'll be a second home owner. If I'd down this before April 30th then my bill would have been £3000 but under George Osbornes new incentive to fuck over landlords i'm going to have to stump up £11,500
That is the really painful part of all this and with other fees will all but wipe out my savings so I won't be able to spend a lot on the new place for the first year
will be worth it In the long run as I still have £50k in equity left in my current house plus an LTV of 85% on the new place so theres still plenty on money kicking around even if I can't see it
The house im letting has gone up £100,000 in the last 14 years and £50k of that since 2009 whereas the one I'm buying has only gone up £40k in the same period so i really want to hold onto the current house as its in a good location
If gf sold her flat and I chucked in all my savings we could put down almost 80% deposit leaving only a little mortgage.
(Alternatively we could buy a house outright where we are right now but it's a bit more of a commute for me).
For a nanosecond she considered letting her flat out but we'd rather have peace of mind that the main mortgage is gone.
I think it's fair the government are taxing multiple home ownership a bit more, to be honest.
Good luck with it all!
My YouTube Channel
if not, the second property can be in your other half's name as a "not second home", assuming your current home is not in both names
You can get one name removed from a property, it's a legal process, costs a small amount of solicitor's time, probably need to update the land registry
btw after a set period, you will be liable for some capital gains tax on the house you have now, so you would pay tax on the £100k gain when you sell
They've change the rules completely since I sold our last home after renting it for 2 -3 years. Back then, your status as a CGT-immune homeowner expired after 2-3 years
It looks like now they assess the CGT as the fraction of time it's been not occupied by you, + 18 months
So in 10 years I think you'd pay CGT on £100k x ( 10-1.5 ) / (14.5+10)
the CGT rate 8% is higher for landlords
I'd get that £100k+ CGT cashed in within the next 2-3 years if I were you
anyway - my point is you need to learn all these rules, or else you can end up investing your equity and working very hard, just to hand the cashs to the building society and HMRC.
btw I'm assuming you know that you can only claim full tax relief on the interest payments if you are on the lower rate of income tax?
http://www.moneysupermarket.com/landlord-insurance/buy-to-let-tax-relief/
The 100k I've made since buying the house is exempt from CGT as this has been my only residence during this time and I have lived here fully for that whole 15 years.
I'll also get 18 months grace on top of that under the new rules but was previously 3 years grace before the changes
When the time comes to sell I will also receive allowances such as lettings relief etc plus the standard 11k CGT allowance and a few more bits and pieces that you're legally entitled to and this will bring it down some more
I also pay at the lowest rate of tax at 18-20%
why will it count as a second home if you are letting your existing home?
i suggest you check this out really carefully. you can obtain a ruling from HRMC.
you can demonstrate you are letting it.
has someone told you this or is this your deduction? if your solicitor told you this, he is not a tax expert/ advisor.
when is this rule active from anyway?
Effects for Me & my Monkey YouTube channel Facebook Fretboard's "resident pedal supremo" - mgaw
Hi buddy
It became active from the end of April 2016 and was announced by George Osborne lady at year
He believed that landlords were buying up all the affordable housing for first time buyers which was causing a shortage so he hit the landlords hard with increased income tax levels over the next 5 years and increased stamp duty in second homes
Despite the fact that I will be letting my current property and living in a new place it makes no difference anymore as it simply classes as a second property so you have to stump up the huge increase in stamp duty
The place I want is £265k so I pay the usual SD rates which would be 3k then you pay an additional 3% tax across the whole of the 265K which comes in at just under 8K on top of that initial 3K
Theres no way of avoiding it if I want to retain both houses
as I read this,
if you sell your current home within 3 years of buying your new home, you can claim a refund on the stamp duty
:-)