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Corsa Sport » Message Board » Off Day » House Day » Anyone on here own a house that they rent out? » Post Reply

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John_C

 posted on 26th Jan 07 at 11:10

if you use a residential for BTL and the mortgage company find out they can call the loan in without notice meaning you could have to pay silly redemption penalties. its unlikely but worth noting


neoquip

 posted on 26th Jan 07 at 00:12

Buildings. on the Flats, there already sorted in the service charge.
On the House the CIS (co-op) were the cheapest I could find.... and they know its rented out... also they just did me building Ins, a lot wntto sell you contents as well...... which isn't needed.... as thats a tenants problem LOL


Matt H

 posted on 26th Jan 07 at 00:10

So justt don't mention the renting thing to the mortgage people, but do with the insurance

(y)

Who do you use for your insurance?


neoquip

 posted on 26th Jan 07 at 00:07

quote:
Originally posted by Matt H
Thats great, cheers for that (y)

I'll probably have to get it on a normal mortgage though as I don't have that much as a deposit. But all that info on the accounts etc should come in handy :)


just be careful the lender doesn't find out, or they will increase your % rate. also insurance.. amke sure they know its rented out or it could be void if anything happens... like the place gets burnt down!!!!!!!!


Matt H

 posted on 26th Jan 07 at 00:03

Thats great, cheers for that (y)

I'll probably have to get it on a normal mortgage though as I don't have that much as a deposit. But all that info on the accounts etc should come in handy :)


neoquip

 posted on 25th Jan 07 at 23:58

quote:
Originally posted by Matt H
Do you have a normal mortgage or a buy to let mortgage? Whats are the main differances between the two?

Also, do you pay someone to manage your tennants? IE a letting agency?


if you want to rent it outyour best with BTL, mainly cus you can just pay the interest rate off (ie, your not paying any of the loan off) but taht allows you to let the rent ay it for you. banks etc will want to see a 125% return overthe mortgage payment. eg if the mortgage is £100 pcm you need to bring in at least £125 pcm.

BTL's look at 15-25% min deposits.
interest rates are slighly higher than a 'personal' mortgage.

Eg, HSBC BTL rate is NOW 6.25% (bank of england's base rate is now 5.25%)
you will get some Building Societies/banks offering less with discounted rates over 2 or 3 years or even fixed over so many years.

I've 3 BTL's with HSBC, 1 with the Skipton, 1 with the Mortgage Works,
1 interest only mortgage with !st Direct (its not BTL tho)



I do my own managment as no way am I paying 9-10% to someone each month for doing nothing. You will get a better feel for who u want to rent too. Get refernces from previous landlords, work, utlity bills showing they paid electric/water/ phone etc on the address they lived at before.
get your own Assured Short Term Contracts from these people.
http://www.oyezstraker.co.uk/main-03-01.htm

they are pre printed and solicitor recognised... a pack of 5 will be about £12.

I now do a min of 9month contract as 6months went too quick.



If someone doesn't pay... its bummer, but mae sure you have a good deposit off them, I get an extra £100 on top of the deposit (normally one months rent)


say the rent is £200 pcm, the deposit is £300 (returnable at the end of the cmntract f everything is as it should be)

When they move in they pay One months rent in advance + the deposit. that would be then £500 to move in.


you have to pay TAX on youe 'un earn earning' but easily done by getting a 'land and property' form for self assessment. get an accountand to do it for you. (about £150)

any costs you pay out on the property (even the accountants cost) are TAX deductable. so you only then pay TAX on your profit over the year.
its dead easy for an account to do it for you and they will know where and what you can save tax on!!!





any other questions?


John_C

 posted on 25th Jan 07 at 22:25

as in mortgage rate between the 2???

very similar in rates. BTL have big fee's. generally 1.5% of the mortgage

moneysupermarket.com


Matt H

 posted on 25th Jan 07 at 20:58

Are the rates any better/worse?


John_C

 posted on 25th Jan 07 at 17:27

BTL is based on rental income and loan to value. 10-15% min deposit. You need to pay income tax on income - allowable expenses at your current tax rate

Residential is based on income

These are the main differences.

(I got a BTL mortgage before i got a residential.)


Matt H

 posted on 25th Jan 07 at 17:15

Or if anyone lets privately, what do you do if someone isn't paying?


Fee

 posted on 25th Jan 07 at 16:35

As far as I'm aware....with a buy to let mortgage you generally need at least a 15% deposit and they don't take into account any other mortgages you may have.

If you dont have a mortgage already it's probably best not getting a buy to let one and just a normal one instead.

Letting agencies do take a pretty high commission....but do all the work for you.
I dont know if they guarantee the monthly rent and then take on any late payments themselves (i.e. you still get the rental even if the tenant hasn't paid and they take it on as a debt by the tenant to them)


whitter45

 posted on 25th Jan 07 at 16:11

I would imgaine there is some form of risk in terms of ensuring payments are made if buying to rent

Surely this is taken into account when mortgaging using the buy to let

I would buy it as if it was your own house and then try to let it privately

Although I'm no expert


Matt H

 posted on 25th Jan 07 at 16:06

Do you have a normal mortgage or a buy to let mortgage? Whats are the main differances between the two?

Also, do you pay someone to manage your tennants? IE a letting agency?


Ecosse Sport

 posted on 25th Jan 07 at 15:06

If the property is mortgaged, then interest payments and other expenses incurred are tax deductible, you will then be liable for tax on the capital payments.


whitter45

 posted on 25th Jan 07 at 10:55

I beleive there is a limit to what income you can get from renting that is tax free


John_C

 posted on 25th Jan 07 at 09:15

yes


Fee

 posted on 25th Jan 07 at 09:05

do you have to pay tax on any rental that you get in over and above the mortgage repayments?
is it treated as income?


neoquip

 posted on 25th Jan 07 at 07:09

quote:
Originally posted by Matt H
Is there? Just got a few questions :wave:


Matt, PM or Email me. I've 5 studio flats and one semi det. house all rented out at the mo ;)


Gary

 posted on 25th Jan 07 at 02:39

I dont, but im planning on doing. Know a bit about it...


Matt H

 posted on 25th Jan 07 at 00:25

Is there? Just got a few questions :wave: