Buy to let the first time

[flyingpinkrabbit]

DH and I are about to move to a different area. We are not planning to sell our current home as the property market isn't so good ATM. We are planning to convert the current residential mortgage to BTL, then applying for a residential mortgage to buy a new property.

Neither of us had any experiences with BTL. Shall we go for interest only or repayment? Shall I go for the agency (8% management fees) or manage ourselves? Some agencies offered the guaranteed rent scheme, is this a good idea? If we decide to manage ourselves, how do we start and how to avoid the loss?

Thank you :)

That's being phased out, Scarlet - I think it was around 75% of interest costs you could offset for tax years 2016/17, and this financial year it will be 50% - then 25% & then nil - this is why many BTL mortgages were interest only, and why many LL are finding BTL doesn't stack up financially.

@daffodilbrain @MoreProseccoNow thank you both for the insights. How do you both work out the tax each year? The previous wear and tear allowance has been changed as well? I will read in detail later today, and go to the landlord forum for more ideas.

Ah ok - I was just going off what the woman I spoke to at HMRC last month told me. She said I should deduct from the rent: mortgage interest, insurance, maintenance, & any other upkeep costs to calculate my net income.

Mind you the front line at HMRC aren't famous for knowing what they are talking about! Luckily I make next to f all in it anyway and I've paid a wedge off the capital so the interest element is minimal...

OP sort for going off on a bit of a tangent, but hopefully you can see it's not straightforward at all, not even when all you're trying to do is make sure your mum has a roof over her head!!

*sorry not sort

The 10% wear & tear allowance has been abolished; so you can only claim for actual costs.

The HMRC website has details of what you can claim/not against taxable income.

Thank you for the advice @Allthebestnamesareused. Our house is newly refurbished. We got new boiler, kitchen appliances and re did the entire gas connection in the kitchen. I got a few agencies come to valuate, they all think the property is in a great condition and ready to live for tenants. However one agency warned me to not expect the property be in the same condition in 2 years time. I will have to repaint the wall etc after. I hope I will have the lucks like you to get good tenants and of course being a good landlord myself

@newmumwithquestions yes, if we sell the first property in 3 years we can claim the extra paid tax back. In our situation, we will still need to pay for the extra taxes for now when buying the second property :(