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  #1  
Old 22.03.2016, 17:37
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Property in UK

Those who rent out their property in the UK or elsewhere. How goes that? Is it complicated? What.sort of things do you have to manage? Is it a faff?


Our house in the UK is being renovated and will hopefully be completed later this year. We are unsure what to do with it. Would it be unwise to sell it?

Pros and cons of selling or being landlords please! No experience of either, it's our first home!
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Old 22.03.2016, 18:14
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Re: Property in UK

If it's a decent renovation, and in an area where you can ask a good rent, it's better than any pension scheme.

Can't comment on any faff involved because I'm at the same point as you and once the renovations are complete, it will be managed by my OH's brother who already has 16 properties in his portfolio.
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Old 22.03.2016, 18:15
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Re: Property in UK

I rent out our little flat in Scotlandshire..

Ongoing it's zero maintenance really. We have an agent who manages things and takes 8% of the rent. If something goes wrong they deal with it, sometimes that includes me paying for something (a new fridge is all i bought in 3 years). Things like broken heating are dealt with by British Gas HomeCare via the agent.

In the beginning there was a few things to do, hardwired smoke detector, electrics/gas check, sign up as a landlord with the local authority, change mortgage to landlord type, change building insurance to landlord.

But all very straight forward.


** We will never live there again, we don't care much about the place, the mortgage is being paid, that's all we care. If you intend to live there again you'd maybe take more of an active role i guess.
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Old 22.03.2016, 18:48
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Re: Property in UK

Have agent.
Insured to the max.
Let them deal with it.
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  #5  
Old 22.03.2016, 20:09
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Re: Property in UK

We have rented out our house in the UK since I moved here. We have an agent who handles most things.
We will probably move back one day, so we try to make sure the house is well cared for.
This may be controversial, but after a very bad experience with one tenant (who is now in prison, for an unrelated event ) we have said we will never again accept dss tenants.
Our current tenant is ex army and maybe due to his training, keeps the house very clean and tidy.
However, despite having paid off our mortgage, we haven't made loads of money. This is partly because of two tenants doing a 'moonlight flit' owing rent (both dss) and having to replace carpets, blinds and have a new kitchen installed.
Good luck!
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Old 23.03.2016, 01:42
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Re: Property in UK

Pay a good agent to handle it all.

Make sure the house is renovated to a good standard, so you can aim for top of market rent. More cash usually means better standard of tenant. Sadly for my desire for equality, my experience is those who can pay more usually provide less problems than those tenants on a budget.

Hold for the long term.

As mentioned before, it is better than any savings policy. And capital gain over the long term is virtually guaranteed.

You can always remortgage or sell later to release cash.

But. You MUST (if property is mortgaged) tell your lender. Standard mortgages won't let you rent our without permission. Better still, remortgage it as a BTL on interest only.

Source: personal experience with our UK property portfolio.

Regards


Ian
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Old 23.03.2016, 09:57
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Re: Property in UK

I also have a house in UK rented out via an agent.

It really isn't that much of a faff at all.

I guess it depends on the tenants that you get in. The first ones I had never stopped complaining about everything but the ones who have been in there for the last 2 years have been great and they take care of the property really well.

Also the UK tax return isn't so hard to complete (unless I have been filling it out incorrectly )

But do inform your mortgage lender.
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Old 23.03.2016, 10:34
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Re: Property in UK

I believe renovations can be offset against Swiss taxes. At least in Basel, if you rent then the annual rent is used to calculate the value of the house for wealth tax, which may well be lower than market value.
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Old 23.03.2016, 10:54
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Re: Property in UK

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. And capital gain over the long term is virtually guaranteed.

You can always remortgage or sell later to release cash.


Regards


Ian
Let's put a reality hat on for a moment.

Buy to let landlords who have a 70% mortgage will be making a loss on rentals in 2 years time, if they have remortgaged & spent the cash, they will likely be unable to pay their CGT Bill & mortgage out of sale proceeds. Plenty of highly geared BTL will go bankrupt

Stamp duty increases 3% for second homes

Help to buy is now 40% in London, will this ever end ? Unless it goes higher prices must fall over time as after 5 years the original buyer won't be able to afford his mortgage once he has to pay interest on the 40%. Who will he sell it to?

CGT for foreign owners

IHT for foreign owners.

Unless salaries increase current house prices in the uk are totally unsustainable.

Other than in London & a few hot spots, prices have not increased in 9 years, you only need to look at rightmoves & see the no. of property that has been for sale for more than a year, even after asking prices have dropped.

Young people can never be priced out of buying a home for very long............
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Old 23.03.2016, 11:07
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Re: Property in UK

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Help to buy is now 40% in London, will this ever end ? Unless it goes higher prices must fall over time as after 5 years the original buyer won't be able to afford his mortgage once he has to pay interest on the 40%. Who will he sell it to?
That would be my biggest concern as, from what I understand, Help to buy London requires as little as 5% equity.

In my mind there's a very high risk that the music stops playing sooner or later, at which time I would definitely want to have left the room already.
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Old 23.03.2016, 11:17
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Re: Property in UK

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You MUST (if property is mortgaged) tell your lender.
If you want to re-mortgage maybe.

My lender did not have BTL license so rather than the hassle trying to get a new mortgage as a non-resident, I just kept quiet.
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Old 23.03.2016, 11:20
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Re: Property in UK

A friend of a mate I met in the pub, told me he had rented his UK house to a lawyer. The lawyer paid the first month rent, and then nothing for seven years, when the friend of my mate finally managed to evict him.

There are plenty of other ways to invest with less risk and less taxes, and as FMF says the market is overpriced. It is also over supplied, and a disaster must be coming, and it is just around the corner.
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Old 23.03.2016, 11:22
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Re: Property in UK

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Let's put a reality hat on for a moment.

Buy to let landlords who have a 70% mortgage will be making a loss on rentals in 2 years time, if they have remortgaged & spent the cash, they will likely be unable to pay their CGT Bill & mortgage out of sale proceeds. Plenty of highly geared BTL will go bankrupt

Stamp duty increases 3% for second homes

Help to buy is now 40% in London, will this ever end ? Unless it goes higher prices must fall over time as after 5 years the original buyer won't be able to afford his mortgage once he has to pay interest on the 40%. Who will he sell it to?

CGT for foreign owners

IHT for foreign owners.

Unless salaries increase current house prices in the uk are totally unsustainable.

Other than in London & a few hot spots, prices have not increased in 9 years, you only need to look at rightmoves & see the no. of property that has been for sale for more than a year, even after asking prices have dropped.

Young people can never be priced out of buying a home for very long............
as usual, instead of addressing supply, government is stoking demand.

aside from the various 'help to buy' type arrangements the new budget brings also the LISA where the government effectively top up house purchases with a free 25% bonus, i.e. you buy a house worth £250k, you put in £200k, the government puts in £50 (no strings attached):

http://www.ft.com/cms/s/2/8e78606a-e...#axzz43iSu716u

a massive free cash giveaway!

i'm sure this will be a major part of tax planning. start funding the LISA as soon as you have a kid and you can put away £80k tax-free, IHT-free and get a cash bonus of £20k from the government by the time your child hits 20 and a nice £100k deposit on a property.
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Old 23.03.2016, 11:32
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Re: Property in UK

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A friend of a mate I met in the pub, told me he had rented his UK house to a lawyer. The lawyer paid the first month rent, and then nothing for seven years, when the friend of my mate finally managed to evict him.

There are plenty of other ways to invest with less risk and less taxes, and as FMF says the market is overpriced. It is also over supplied, and a disaster must be coming, and it is just around the corner.
Disaster has already come. Part of the house price correction has already arrive d in the form of the depreciation of Sterling.
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Old 23.03.2016, 12:54
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Re: Property in UK

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A friend of a mate I met in the pub, told me he had rented his UK house to a lawyer. The lawyer paid the first month rent, and then nothing for seven years, when the friend of my mate finally managed to evict him.

There are plenty of other ways to invest with less risk and less taxes, and as FMF says the market is overpriced. It is also over supplied, and a disaster must be coming, and it is just around the corner.
I don't believe this story, assuming to was let on a standard tenancy eviction would be possible in under a year.
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Old 23.03.2016, 13:13
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Re: Property in UK

depends on the tenant. getting friends or family to manage it for you can be tricky - best to get a reputable agent and suffer the cost.

keep an eye on what the uk does with taxes. you can always consider an offshore structure now that you are not resident but unless it is big bucks and have other foreign assets it will not be worth the cost. The FX exposure will bounce around with EU resolution etc but it is only a call you need to make if you want to sell at some point. If you returning to UK for sure it is of no consequence. If not then just don't look back in time.
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Old 23.03.2016, 13:28
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Re: Property in UK

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Other than in London & a few hot spots, prices have not increased in 9 years, you only need to look at rightmoves & see the no. of property that has been for sale for more than a year, even after asking prices have dropped.
As you seem to have good knowledge of this, can I ask a few questions please?

I've owned my property, with a mortgage, since 1996, but had to remortgage in my sole name due to divorce in 2007. Currently, my outstanding mortgage is approx. one third of the market sale value. Property prices in my street have gone up by 13.2% over the last two years and 16.7% over the last 5yrs. If I asked the middle price in the rental range, it would be double my current monthly mortgage repayment.


We have the funds in savings to do a full refurb, and I am considering extending the property (to extend the kitchen and add a second toilet & shower room), because it's in a sought after area with low crime, catchment area for the best schools in the area, and has excellent transport links by road, rail and air.


In your experience, with these factors, would you...
a. sell as is
b. refurb then sell
c. refurb and extend then sell
d. refurb then rent out
c. refurb and extend then rent out

I've struggled with this decision for two years. The refurb is currently planned for this summer. Everyone who knows the house says I should rent it out as there are so few rental properties in the area, it's a great family location and has a large garden.

Your input would be greatly appreciated.
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Old 23.03.2016, 14:19
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Re: Property in UK

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As you seem to have good knowledge of this, can I ask a few questions please?

I've owned my property, with a mortgage, since 1996, but had to remortgage in my sole name due to divorce in 2007. Currently, my outstanding mortgage is approx. one third of the market sale value. Property prices in my street have gone up by 13.2% over the last two years and 16.7% over the last 5yrs. If I asked the middle price in the rental range, it would be double my current monthly mortgage repayment.


We have the funds in savings to do a full refurb, and I am considering extending the property (to extend the kitchen and add a second toilet & shower room), because it's in a sought after area with low crime, catchment area for the best schools in the area, and has excellent transport links by road, rail and air.


In your experience, with these factors, would you...
a. sell as is
b. refurb then sell
c. refurb and extend then sell
d. refurb then rent out
c. refurb and extend then rent out

I've struggled with this decision for two years. The refurb is currently planned for this summer. Everyone who knows the house says I should rent it out as there are so few rental properties in the area, it's a great family location and has a large garden.

Your input would be greatly appreciated.

Speak agents & see how much extra the property would be worth after the extension V the cost of doing it.

Possibly worth repainting before selling, but if it were me I would look to sell.

The last UK property crash came after the end of Dual tax relief on MIRAS. The change in extra stamp duty on second properties & change in BTL taxation will probably cause the next crash.

You are liable to CGT at 18% / 28% for any increase in value since 6 April 2015
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Old 23.03.2016, 14:34
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Re: Property in UK

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As you seem to have good knowledge of this, can I ask a few questions please?

I've owned my property, with a mortgage, since 1996, but had to remortgage in my sole name due to divorce in 2007. Currently, my outstanding mortgage is approx. one third of the market sale value. Property prices in my street have gone up by 13.2% over the last two years and 16.7% over the last 5yrs. If I asked the middle price in the rental range, it would be double my current monthly mortgage repayment.


We have the funds in savings to do a full refurb, and I am considering extending the property (to extend the kitchen and add a second toilet & shower room), because it's in a sought after area with low crime, catchment area for the best schools in the area, and has excellent transport links by road, rail and air.


In your experience, with these factors, would you...
a. sell as is
b. refurb then sell
c. refurb and extend then sell
d. refurb then rent out
c. refurb and extend then rent out

I've struggled with this decision for two years. The refurb is currently planned for this summer. Everyone who knows the house says I should rent it out as there are so few rental properties in the area, it's a great family location and has a large garden.

Your input would be greatly appreciated.
well, to answer your question, you also need to say:

- how much can you sell it for now vs (b) vs (c)?
- how much can you rent it for now vs (d) vs (c)?
- what would you do with the money if you sold?

then you can compare the scenarios.
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Old 23.03.2016, 14:35
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Re: Property in UK

IMO I'd sell the UK property.

I rented out my UK house in the 1990s. The agent needed chasing every week when the house was not occupied. Some tenants were a pain wanting things changing and complained a lot. They all left the place in a mess requiring me to go over and clean up.

I was very happy to sell...
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