meagain Posted June 27, 2008 Report Share Posted June 27, 2008 Hi everyone, As the title says I'm a new landlord having just inherited a tenanted property - Oh what a minefield!! I'm just wondering if any of you could point me in the right direction on having the gas/electricity safety checks done. I know they have to be corgi registered but that's all I know! The property is in a pretty poor state and needs new windows, doors, kitchen, bathroom, flooring, and decorating throughout. My question is, is there any grants available? Do I legally have to get them all done straight away? I'm a stay-at-home mum, but my hubby is self-employed. At the end of the tax year, do I put the rental income on his tax return or do I do a separate one for both of us? And is there somewhere on the net where I can find out what is allowable/disallowable expenses for the property? I think that's enough for now .... please bear with me as I'm going to have so many questions. Thank you x Link to comment Share on other sites More sharing options...
GPEL Posted June 28, 2008 Report Share Posted June 28, 2008 Nothing personal but it's no wonder people blunder through things, cock it up and are then left with the pieces to put back together if they haven't got an idea what they're doing. Government legislation is increasing because all to often because "down-trodden" tenants are seen as being disadvantaged by unscrupulous landlords, who, when it's boiled down, just don't have a clue. There is a whole host of legislation, laws and acts of parliament just waiting to trip you up. If you're completely inexperienced you may not even know what questions to be asking, it's just too big an area to stab here and there at things. My advice: buy a good book on the subject as well as searching the archives of this forum - to save time and possible future avoidable expenses. Link to comment Share on other sites More sharing options...
meagain Posted June 28, 2008 Author Report Share Posted June 28, 2008 Wow! Thanks for the "advice" and at least you bothered to reply .... guess I'll go elsewhere. I thought this would be a good first port of call. I do appreciate that I have to search for answers, whether that be in a book, professionals or an internet forum. I've obviously came across as not having a clue but I hope that doesn't make me sound as though I'm unscrupulous and that my tenant will be "downtrodden". We all have to start somewhere. Link to comment Share on other sites More sharing options...
Chestnut Posted June 28, 2008 Report Share Posted June 28, 2008 Just to start you off with something constructive, .....while you find the books! You would need a statutary annual gas check, but if you have inherited a tenant there may already be something such as a service agreement, in place for this. An electrical check is not statutary but you would be wise to get an electrician to check the situation, including any portable electrical equipment used by the tenant which belongs to you. I don't have knowledge about minimum condition of repair or improvement grants. Depending on the age of property you could start by consulting your local council authority. I'm not a tax expert, but I know that you would normally need to declare tax on net earnings after deductions. If you are joint owners you can split the figures between you to share the tax. You should obtain or download the Rented Property page(s) of the current Self-Assessment form from HMRC, which briefly explains deductions you can make, e.g. insurance, gas check fee, servicing etc. As GPEL says, read some up-to-date books and consult this site - and you can search the forum by topic. This forum has some excellent contributors for different topics. I find that it helps ask separate questions on specific topics, e.g. gas checks, tax matters, repairs etc., rather than be too general. Link to comment Share on other sites More sharing options...
meagain Posted June 28, 2008 Author Report Share Posted June 28, 2008 Thank you Chestnut, I have been searching the forums and the net and will check out everything else you have said. In future I will ask a specific question rather than being general, it's just that I'm in panic mode as GPEL rightly said about downtrodden tenants - obviously my tenant has just been 'left to it' and I'm scared that I'm not going to do everything right and legal. Off to search amazon for books lol! Link to comment Share on other sites More sharing options...
Mortitia Posted June 29, 2008 Report Share Posted June 29, 2008 Why don't you make sound start by checking if there are gas safety certificates for all gas appliances at the premises and getting the electrics checked by a certified electrician? You are going to need the services of these people throughout your landlord life to find ones who are reliable, reasonable and correctly qualified and stick with them. Building a relationship with these two trades is essential to maintain your building. I agree with the others - you need to read up and decide if this is really for you. You do come over as a bit 'scatty' and being a 'stay at home mum' whilst I'm sure is rewarding is no excuse for messing up as a landlord. It is not for the faint hearted who fancy doing it on a whim. Hope we're not being too hard on you but this is serious stuff. Mortitia Link to comment Share on other sites More sharing options...
Trenners Posted June 29, 2008 Report Share Posted June 29, 2008 Hi meagain, Like most things in life - if you don't have the expertise to "do it yourself" then it is usually more efficient to pay a professional. I would advise that you seek the help of a local letting agent and get them to help you run the tenancy. As you gain more experience, in the future, you might consider taking on the day to day management yourself - but whilst you learn the ropes then let the experts run the tenancy for you. Find a small, well recommended, local agent who will deliver you a personal service. I know you might have to pay 10% of the rent to the agent - but it is better to do that than kill your tenant (because the property wasn't safe), get investigated by the Inland Revenue (because you didn't declare the correct amount of Income Tax) or have the property empty (because you are not experienced at sales and marketing of investment property). When I first started - I used a letting agent - then, as I became more experienced, I took over the day-to-day management myself .... now I run my own letting agency for other landlords ! Good luck .... Mark Link to comment Share on other sites More sharing options...
meagain Posted June 29, 2008 Author Report Share Posted June 29, 2008 Thanks Mortitia and Trenners, your advice is greatly appreciated. The tenant has lived there for many years, and safety checks have never been carried out so it's paramount that I get that sorted asap. As for grants etc, going to apply for the warmfront grant as the tenant is in receipt of HB. Finally, going to ring Inland Revenue tomorrow and get all the information that I need. I feel that the property is in sub-standard condition at present, so going to plough lots of money into it and looking at the property pages on the self-assessment, looks like I will definetly make a loss this year which is fine as no-one should have to live like that. Searching this forum has been a great source of help, and thanks to everyone who replied. Link to comment Share on other sites More sharing options...
GPEL Posted June 29, 2008 Report Share Posted June 29, 2008 Don't forget to discuss any plans for improvement with your tenant beforehand. They don't always see changes as in their best interest and may object as there is likely to be quite a bit of disruption or raises concerns about rent increases etc. Properties should be of a good standard but the occupant needs bringing along with the changes if made during their tenancy or you could face the spectre of re-homing them/compensation while the work is done. Link to comment Share on other sites More sharing options...
meagain Posted June 29, 2008 Author Report Share Posted June 29, 2008 Thanks for that GPEL. Luckily, I have spoken to the tenant and have told her what changes I would like to make and she is in full agreement. Hopefully, the disruption will be kept to a minimum. Link to comment Share on other sites More sharing options...
BarryM Posted July 7, 2008 Report Share Posted July 7, 2008 ^ sound advice. Get the gas safety certificate sorted - as your next phone call! With HMRC make sure that you keep all bills, receipts etc that relate to the letting of the property. It's worth paying an accountant (in my experience, at least) to help you on your return if you are letting, you may wish to consider this - for the first year, at least. It sounds like the property hasn't been particularly well maintained over the years so I'd definately recommend a full electrical safety audit. If you supply any electrical items you have (insofar as I understand the regulations) a duty to supply operating manuals too. Keep all documents and receipts relating to all works that you do and ensure that you use contractors with comprehensive public liability insurance too. In the event of any mishap (with any aspect of the property's maintenance) it's essential that you are able to show you took all reasonable precautions. Good luck! Barry Link to comment Share on other sites More sharing options...
embery Posted July 17, 2008 Report Share Posted July 17, 2008 Hi there, I have just read a couple of your emails with interest. Like you I am a new landlord I also inherited my property with a horrible tenant insitu. Also like you I have not got a clue about these things. I have just about read everything there is to read, spoken to solicitors and citizens advice and basically don't seem to have got anywhere. GPEL who I think replied to one of your questions seems to be very clued up if I remember rightly he also replied to one of my queries. You are not alone, I am also stumbling around in the dark. Everything seems to protect the tenant, even horrible ones, who don't work, treat the place like a bin and know ALL their rights. My tenant doesn't even pay his own water bill. I do!! I have had a terrible time with him, he reported me to the police after a 30 second conversation, I've had threatening letters, been accused of trespassing on my own property. It has become a nightmare. But, ever onwards. I am trying to get an increase in the rent, it has been the same (£250) for 8 years, but he has to agree to it and there's not a cat in hells chance of that. Wish me luck!! Regards Sally Link to comment Share on other sites More sharing options...
meagain Posted July 17, 2008 Author Report Share Posted July 17, 2008 Hi Sally, you have my sympathies and I hope you manage to sort everything out. I too have read and read and read and have got a long way to go, but I'm getting there slowly! The gas safety check has been done, the warmfront guys have been out and are going to be doing some insulation work, and we are in the process of doing much needed works on the property at a steady pace so as to not cause too much disruption to the tenant. I have issued a new lease, a 6mth AST, increased the rent and the LHA have confirmed that the rent will be paid directly to me as the tenant had fell into arrears - so I'm not doing too bad at the moment, but it's a huge learning curve! Good luck to you, I hope everything turns around for you. BarryM, thank you for your sound advice - it's much appreciated. Link to comment Share on other sites More sharing options...
plym77 Posted July 24, 2008 Report Share Posted July 24, 2008 Hi Meagain Apologies, I haven't been around for a while due to some unforseen circumstances! Just to introduce myself, my name is Sherena and I am a chartered tax adviser and property tax specialist. From a self-assessment point of view you will need to report the income and expenses of the business on a self assessment tax return (covering the period to 5 April each year) for each person who owns it, therefore if it is owned jointly between you and your husband, then you will each have to declare your share. Your tax return will also need to show any other income, for example self-employment, employment, bank interest etc. There are various expenses allowable, depending on the type of let. Your tax returns must be submitted by 31 October if you complete them manually, or 31 January if you submit the information online. Any tax liability will be payable 31 January following the end of the year of assessment (for example tax year 5/4/08, tax payable 31/1/09). Depending on your profit levels you may also be require to make payments on account towards the following tax year. It may also be worth considering the ownership split between you and your husband, depending on his income levels as I assume as a stay at home mum that you possibly do not have much income, perhaps a small salary from your husbands business? This may also be an idea opportunity to consider any loan-interest planning as I assume that you inherited the property free of debt and possibly do not have a mortgage on it? There may be an opportunity to re-structure your finances so that you can either release capital or turn non-qualifying loans (perhaps own mortgage?) into qualifying ones. It is important that this is structured correctly though to ensure that you get the relief to which you are entitled. Although I do appreciate in this climate that mortgages are a little harder to come by at the moment! I hope the above helps generally with tax, however I do think it would be worth you speaking to a tax adviser to ensure that you and your husbands affairs are structured in the most beneficial way, minising tax exposure in various areas. If you would like more specific advice, please feel free to contact me on sherena.glanton@target-accountants.com or by calling me on 01225 486 359 and we can go from there. In the meantime, I hope this helps Regards Sherena Link to comment Share on other sites More sharing options...
meagain Posted July 24, 2008 Author Report Share Posted July 24, 2008 Hi Sherena and thanks so much for your advice. You are correct in all of your assumptions and I am going to need professional help. I have taken note of your contact details - thank you for that. Link to comment Share on other sites More sharing options...
plym77 Posted July 25, 2008 Report Share Posted July 25, 2008 no problem. give me a shout if you need help with your tax return or other tax advice and we can go from there. In the meantime, best of luck with this new venture - providing you do it right, you will be fine! Best wishes, Sherena Link to comment Share on other sites More sharing options...
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