letting my house
Discussion
might look at letting house out whilst riding a wee financial storm.. anyone here got any sound advice please? Easy route is through local agent but they take around 10% fee; tempted to have try letting directly stick an ad in the Henley paper.
Would this get declared on a tax return & lead to hefty tax bills?
thanks
Ed
Would this get declared on a tax return & lead to hefty tax bills?
thanks
Ed
You'd have to do your research and find out realistically what comparable properties are renting for in your area. You then also have to work out if the extra costs, i.e. agency fees, decorating, wear and tear etc would be covered by the rent. I'm not sure about the tax position though.
IMO, I would definitely bite the bullet and go through an agent. You may be able to negotiate a slightly lower fee, again depends on the state of the rental market in your area.
If you use an agent, you will never be troubled by a tenant calling you at 3am to tell you that the house is flooded/they've lost their keys/window is broken etc. A relative of mine rented out her house in Brighton, first by herself and then through an agent and she said that using the agent was the best thing she'd ever done, despite the extra cost.
Definitely definitely do your research beforehand though. Renting out property is not a licence to print money, regardless of what you may hear in the media.
Also remember that if you do let your property, treat your tenants as you would expect to be treated by a landlord.
IMO, I would definitely bite the bullet and go through an agent. You may be able to negotiate a slightly lower fee, again depends on the state of the rental market in your area.
If you use an agent, you will never be troubled by a tenant calling you at 3am to tell you that the house is flooded/they've lost their keys/window is broken etc. A relative of mine rented out her house in Brighton, first by herself and then through an agent and she said that using the agent was the best thing she'd ever done, despite the extra cost.
Definitely definitely do your research beforehand though. Renting out property is not a licence to print money, regardless of what you may hear in the media.
Also remember that if you do let your property, treat your tenants as you would expect to be treated by a landlord.
Spoke to the estate agent bought house from. They offer 3 levels of letting service
1. let only (they advertise & make sure people are total scrotes)
2. above plus rent collection
3. full mananged service
3 = 10% of rental amount, which seems reasonable enough.
Understand totally not licence to print money; it'll be more a case of not having to sell the place whilst renting a cheapy unit such time the account healthier. The other hurdle would be finding this cheaper place; one thats ok enough to live in for 12 months at least but cheap enough to make the uproar worthwhile. Ed
1. let only (they advertise & make sure people are total scrotes)
2. above plus rent collection
3. full mananged service
3 = 10% of rental amount, which seems reasonable enough.
Understand totally not licence to print money; it'll be more a case of not having to sell the place whilst renting a cheapy unit such time the account healthier. The other hurdle would be finding this cheaper place; one thats ok enough to live in for 12 months at least but cheap enough to make the uproar worthwhile. Ed
mechsympathy said:
Can you not rent a room out? Should save a great deal of hassle and there is little chance of those nice men from the IR finding out...
Under the Inland Revenue "Rent-a-room" allownace, for tax year 2005/06 you can receive upto £4,250 tax free per year for renting a room out.
DAZ
And can I rent my business a room in my house for an office??Have you spoken to your mortgage provider about your financial situation? In my experience, if you ask them for help before you get into arrears, they may well be able to do something like a payment holiday or a reduced monthly payment, or perhaps switch to interest only for a while.
miniman said:
Have you spoken to your mortgage provider about your financial situation? In my experience, if you ask them for help before you get into arrears, they may well be able to do something like a payment holiday or a reduced monthly payment, or perhaps switch to interest only for a while.
Things are rather 'intersting' and a payment holiday (or whatever) would kinda be glossing over the bigger probs. Cant really go into nitty gritty at the mo.
Need a beer
Ed
I would recommend letting through an agent on a "let only" basis. They will market tthe property for you, show people round do the inventory and credit rate / credit check the applicants. Make sure you see the credit checks and rating before you agree to a tennant.
In my experience adverts in the paper only attract the credit scoring "underclass" who know very well that they would not meet the standard credit rating criteria. In general bad tennants are persistent bad tennants so virtually always have some sort of "history".
Tax should not be a problem. If the property is mortgaged you can offset the rental income against mortgage interest.
Notify your mortgage provider and also check your buildings and contents insurance is valid for letting.
pp
In my experience adverts in the paper only attract the credit scoring "underclass" who know very well that they would not meet the standard credit rating criteria. In general bad tennants are persistent bad tennants so virtually always have some sort of "history".
Tax should not be a problem. If the property is mortgaged you can offset the rental income against mortgage interest.
Notify your mortgage provider and also check your buildings and contents insurance is valid for letting.
pp
The Rent-A-Room allowance of £4,250 is IN ADDITION TO you normal tax allowances. Income received under Rent A Room DOES NOT have to be returned on your Self Assessment tax return.
It's not often that the authorities allow you totally tax free ioncome so this is a scheme well worth looking at.
If you rent out your house completely, ALL your rental income from the house would need to be returned on the "Land and Property" supplementary pages of a Self Assessment tax return. Obviously, you would be allowed offset against this rental income whatever costs you incurr in manageing and maintaining the property (this includes mortgage interest by the way) so the amount left chargeable to tax may be very low or even non-existent.
Failure to report Rental Income is a criminal offence and could involve you in serious trouble with the tax authorities if and when they found out (they have ways and means of finding such things out).
However, there are other factors you should be aware of.
Capital Gains Tax could be an issue if you rent out your house for a prolonged period.
Your mortgage and insurance companies would need to know that your house was no longer your main residence.
You would have to find altternative accomodation to live - which would involve further costs of course.
There might be Council Tax isues arising.
It's not often that the authorities allow you totally tax free ioncome so this is a scheme well worth looking at.
If you rent out your house completely, ALL your rental income from the house would need to be returned on the "Land and Property" supplementary pages of a Self Assessment tax return. Obviously, you would be allowed offset against this rental income whatever costs you incurr in manageing and maintaining the property (this includes mortgage interest by the way) so the amount left chargeable to tax may be very low or even non-existent.
Failure to report Rental Income is a criminal offence and could involve you in serious trouble with the tax authorities if and when they found out (they have ways and means of finding such things out).
However, there are other factors you should be aware of.
Capital Gains Tax could be an issue if you rent out your house for a prolonged period.
Your mortgage and insurance companies would need to know that your house was no longer your main residence.
You would have to find altternative accomodation to live - which would involve further costs of course.
There might be Council Tax isues arising.
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