The wife has come to the decision that she wants to rent out her London apartment now she is mainly wfh.
She had looked as selling but it’s unlikely at present as it suffered from the blight of cladding & while there is a plan in place the mortgage lenders are not looking kindly on the property.
So I wonder does anyone know of any excel models that can help me help her visualise what her likely income would be once we take tax, fees, service charge etc into account.
And/or point me in the direction of some guides for first time landlord’s so I can build my own.
As ever thanks in advance for any advice.
I think I am right in saying you can claim a £1000 tax free. Then you minus any costs like lettings agent/management fees, the ground rent and of course claim any costs you incurr to get it on the market, so keep all the receipts. What’s left is taxed as income at whatever the rate she pays taxes at.
If you are starting out on the landlord journey join the NRLA and do a few of their on line courses.
With regards the excel sheet I’d just knock your own up.
Things that will eat into rent are …
Insurance, agents fees, maintenance, voids.
Compliance, EPC, EICR, Gas Safe Certificate, installation of smoke and CO alarms.
If you cover that lot you should have a reasonable idea on the next yield.
Borrowings are kind of a separate issue if you have any, as is tax.
Last edited by Montello; 28th October 2022 at 17:56.
Residential mortgage? will need consent to lease i think.
If there is a mortgage you will need to get approval from your lender to rent out, which may not be forthcoming which will then require you to re-mortgage with a BTL provider ... more costs.Originally Posted by MCFastybloke
Your buildings insurance will also need notification.
There are several available online for no/little cost, but they tend to be difficult to tailor to your own needs
Not too difficult to start your own workbook with various sheets within
Columns for all the deductable expenses, and same for non-deductable. more columns for revenue, insurance, etc - simple formulae at the correct percentages - then hide the columns you find out you don't need.
It's actually quite satisfying, if you have the time
And get some pivot tables in there
Only if you want arousal
HMRC have some useful guidance on letting out property, and they also run regular online sessions where you can ask questions and get advice on what’s allowed etc.
https://www.gov.uk/guidance/income-t...-rental-income
Once upon a time, you could deduct pretty much all your borrowing costs against any tax payable on the rental income, but nowadays it’s a flat allowance and some receipted expenses for repairs etc.
It’s not the great thing it used to be for private landlords, but it still means somebody else is paying some of the mortgage and expenses which is better than it sitting empty if your wife isn’t using it.
Last edited by Tooks; 28th October 2022 at 19:12.
It isn’t knock off £1,000 and the expenses of letting.
It is decide which is best. You can decide each year, depending on the level of expenses.
If the property is jointly owned can each owner claim the £1000?
That’s my understanding, yes. If you have income from property, even if it’s jointly owned, then the £1k is applicable.
It’s a couple of years since my wife and I rented a property out, but we could each use the £1k allowance. To be fair, the tax returns process walks you through it.
Others have mentioned compliance. I'm a new landlord When I made my property fit for rental there were lots of costs associated with getting the property up to speed from a compliance point of view. In order to get the electric certificate (EICR) it required a new fuse box, changes to the lights and a few other remedial actions. Cost nearly a grand. In terms of agency fees I'd factor in 8 to 12% of the rental income and they'll take most of your first months rental income in set up fees. It's well worth using an agent though, especially for your first rental and they will advise you what needs doing. My property went on the market for rental on the Wednesday and by the Friday the 'right' tenant had paid a holding deposit. Happy days so far.
Yes.👍
Also is it per property?
Historically expenses have always been over that but now I have ended the letting agent maybe this will come into play.
Join the LandlordZone forum - there is a lot of information there:
https://forums.landlordzone.co.uk/
In particular they have a lot of documents you might find useful:
https://www.landlordzone.co.uk/documents/
This is a good source of advice https://www.litrg.org.uk/tax-guides/...g-out-property
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