Keep reading to discover…
- What it’s really like to become a landlord
- How to avoid being caught out by mortgage or tax issues
- How to make smarter decisions
- And lots more…
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Table of Contents
Should I sell my house or rent it out?
When does renting your home make sense?
What do you think will happen to house prices?
Becoming a landlord is hard work
Can you afford to own & maintain two properties?
Will renting your old home be profitable?
Mortgage issues when renting out your home
Income tax issues
Capital Gains Tax (CGT) issues
How to rent out your house (step-by-step)
What is ‘Let to Buy’?
- Becoming a landlord can impact the amount of tax you pay and
benefits you receive.
- It’s unlikely you can let your own home in its current condition;
there are 400 rules and regulations to abide by to let legally and
safely, even to friends and family.
- Seeking professional advice is essential before you decide to let a
home you own and buy another.
Should I sell my house or rent it out?
Sometimes you’re left with no choice:
- It’s estimated that up to 30% of landlords are considered
‘accidental’ i.e. letting their own home because they couldn’t sell
or are working away temporarily.
- Accidental landlords tend to let because they have to, rather than
just to make money.
- For some it has been a great decision, they have managed to make
money and even build a buy to let portfolio off the back of letting
their first home.
- However for others it has not worked out at all.
- Some have seen a home they once loved ruined through damage while
others have not received rent for months at a time and ended up
being owed thousands or tens of thousands of pounds.
So, as always with property, there are winners and losers.
Before you sell or rent your existing home and buy another, it is
vital to take expert financial and tax advice to understand the
pros & cons of each route.
Renting it (pros & cons)
- Potentially help you move home if you’re only moving away
temporarily or can’t sell the property.
- The hassle of renting can be outsourced to a quality agent one who
is a member of NALS, ARLA or UK ALA.
- A decent tenant will pay rent on time and take care of your
- You can make an income and secure capital growth from retaining the
existing property and letting it.
- You may need to invest money ensuring the property meets the legal
requirements e.g. fit a new fuse box or put in a new boiler.
- Tenants can cause damage to your home (even setting up cannabis
farms), which may/may not be covered by your landlord insurance.
- Taking on additional debt may result in losing both homes if prices
fall and/or you default on mortgages.
- Keeping up with new and the existing 400+ rules and regulations to
let a home is difficult and if you don’t, you can be fined up to
30,000 for non-compliance.
- If the tenant stops paying the rent, you can lose income and end up
having to pay out a lot of costs keeping the property going. This
can also happen when the property doesn’t let (referred to as ‘void
- Renting a property can be expensive to maintain and can cost more
than the rent you receive.
- Taxation on ‘second homes’ including buy to let can be much higher
than investing money in other ways.
Selling it (pros & cons)
- You can spend more on your next home.
- Any additional money you spend on a new home means when you sell,
the gain is free of Capital Gains Tax.
- It allows you to move on with your new life.
- It allows you to release equity to spend or reinvest in less risky
- Less hassle: no unexpected repair bills, tenant damage or voids.
- Not putting all your eggs in ‘one basket’ relying on one property
to deliver a return.
- You may be selling off a lucrative asset that grows substantially
- If the property is in negative equity you may have to use spa