Does anyone have a rough guide to the costs involved in letting out property?

What tax would i have to pay on it?

What would the estate agent want?

Any help would be fantastic!

The amount the estate agent wants depends on the type of management YOU want from them ie full-managment or part-management. Full management they usually take a monthly percentage, part-management they take a flat fee every time the contract/tennant changes. I was thinking about doing this with my house and the estate agent recommended part-managment particularly if I had access to handymen/women who could be ready to sort out problems. Full-management was recommended for those who perhaps live abroad and are neither contactable nor have contacts. On reflection of my current situation, I have since decided to sell the property. So, if anyone is looking to buy in the Crosspool area..another house should be going on the market in the next month or so!

A friend who's going to be traveling for a year said Blundells wanted 10% for part-management and 15% for full management.

from what i've heard they don't provide very much of a service for their fee's.
You're better of managing it yourself.

Tax wise you need to pay income tax at whatever bracket you're in on the full amount I think.
If you set up a ltd company (costs around £500 to do) then you could offset expenses against that and possibly employ your mum or your gran or someone in order to take advantage of tax allowances.

I would be leaving the country and the only UK income would be the house.

I need them to do full management. 15% is alright.

Just means when i come back i will still have a house.

Originally posted by Lickable
I would be leaving the country and the only UK income would be the house.

I need them to do full management. 15% is alright.

Just means when i come back i will still have a house.

it'll probably come in under your own personal tax allowance then.
But i'd check with an accountant/solicitor as i've no idea how it works when you're also earning abroad.
Try and find some people who can vouch for the service a particular agency will give, otherwise it'll just be pot luck and you could be stung.

try haybrook - negotiate around 11-12%

I had Haybrooks a few years ago,
they were good and charged me 12% The price went up to 15% though during the time I was with them.
hazel

Hi,

I have a house in Nottingham rented out via a specialist letting agency (i.e. not a Estate Agent) and they charge 11% PLUS VAT (WEALTH WARNING: WATCH OUT FOR VAT ON ALL AGENCY QUOTES!) You can probably negotiate down to 10%.

The quality of tenants they have in are fine but the "service" is absolutely abysmal, for instance they are supposed to inspect the property quarterly and I have to badger them to do this.

I would only ever use an agency if I didn't live locally to the property. This agency (and I imagine others) offer a tenant finder service where they do the advertising, vetting and credit checks of the tenants for a fixed fee - I used this before and found it much better than the 'fully managed' service.

You can write off all your costs against tax which helps though.

Thanks,
Mark.

We pay 12% + VAT for a full management service (not in Sheffield though) That includes finding and vetting tenants, arranging repairs, regular inspections with report, etc. You're allowed to deduct virtually all expenses so letting income should be covered by your personal taxation allowance - BUT you need to check if the country you're going to will tax your British income.

Incidentally, when the landlord is abroad whoever collects the rent (whether agent or not) is supposed to deduct basic rate tax before passing the rent on to you. You can avoid that by filling out an Inland Revenue form (NRL1 I think) confirming your tax affairs are up to date.

If you have a mortgage you'll need the bank/building society's permission and they will probably increase the interest rate. You may well also need to change your buildings/contents insurance because not all insurance companies are happy with rented property.

You'll also need to pay for things like electricity and gas safety checks (an annual gas safety certificate is needed). And if you want to leave any furniture that has to be safe too (e.g. low combustibility soft furnishings etc.)

Oh and if you're likely to be away for more than 4 years you then start getting into the realms of possible Capital Gains Tax if you then sell the house...

Hope that helps a bit.

I am a private letting agent. I manage around 20 houses and my rate is 10%. I can provide references on request. If you would like to discuss my services further please contact me using the following details:

rkj.properties@virgin.net

mob: 07793 634358