my 1st house, do i rent to tenants or lodgers?

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    my 1st house, do i rent to tenants or lodgers?

    basically i have just bought my first house, a 4 bedroomed terrace in salford (new broughton).

    im a student and i bought the house as an investment, saves me paying rent and i could get some money from renting the rooms out.

    ive decided to only rent out 2 of the bedrooms and to leave the other room as a spare for my family or friends.

    but my dilema is that i dont know what procedure to take, ive read that lodgers are the easiest to handle but the only problem i have with that is that :

    "The Inland Revenue allow you to earn up to £4250 per year (Just over £350 per month) tax-free through the rent-a-room scheme"

    and if im renting out TWO rooms at a reasonable price, im bound to cross that £4250 mark....so does that not make me eligible for the rent-a-room scheme?

    or is it possible that i can have a lodger and a tenant in the same house?

    i have no idea how much a reasonable price is for the rent because its going to be a new house in a new development and i hope to furnish all the rooms. and one of the rooms is abit bigger, has en-suite and a small balcony. so obviously i would have to charge different amounts of rent, am i right?

    and i am to believe that if all the tenants/lodgers in the house are students then the house would be exempt from paying council tax?

    thanks guys, ANY advice would be appreciated

    #2
    thanks mate, yeh i think ill arrange to meet with the council.

    btw whats does AST mean?

    thanks

    Comment


      #3
      Originally posted by patrickyuis View Post
      thanks mate, yeh i think ill arrange to meet with the council.

      btw whats does AST mean?

      thanks
      Assured Shorthold Tenancy.
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

      Comment


        #4
        Originally posted by Wickerman
        Hmmm this is an interesting one.



        And finally... you will be creating a HMO (although more than likely not licensable). You may need to upgrade the doors to fire doors and take other precautions. Again speak to your local council regarding this and get them round.
        I believe that you are allowed 2 lodgers without it being an HMO if you own the property. So no worries on that score.
        All posts in good faith, but do not rely on them

        * * * * * ** * * * * * * * * * * * *

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          #5
          Originally posted by Wickerman
          But does that apply to any property alterations?

          If it looks like a duck, quacks like a duck there is a good chance it tastes good with hoi sin sauce.

          One for the HMO experts methinks!
          It could of course be a chicken with a personality complex!
          Although still good fried !!!!!!!!!!!!

          Comment


            #6
            Originally posted by Bel View Post
            I believe that you are allowed 2 lodgers without it being an HMO if you own the property. So no worries on that score.
            sorry if i sound stupid, but i dont know what HMO stands for either (newbie) lol

            when you mean own the property, do you mean in respect of freehold and leasehold?

            beacause i paid for this house in cash so there is no morgtage, and it was for a leasehold of 250 years.

            so in that instance would it be considered that i own the property?

            thanks

            Comment


              #7
              House
              in
              Multiple
              Occupation.
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

              Comment


                #8
                Originally posted by Wickerman
                But does that apply to any property alterations?

                If it looks like a duck, quacks like a duck there is a good chance it tastes good with hoi sin sauce.

                One for the HMO experts methinks!
                Property alterations?

                After re-reading the post; LL would have to live there for 2 other occupiers to be called "lodgers" ; which would not be HMO. see http://www.landlordzone.co.uk/forums...hlight=lodgers

                If it is not landlords main abode then room occupiers would be tenants. 2 room occupiers + occasional guests not an HMO. 3 unrelated room occupiers is an HMO.
                All posts in good faith, but do not rely on them

                * * * * * ** * * * * * * * * * * * *

                You can search the forums here:

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                  #9
                  hey Bel thanks for the advice, im jsut about to read it over now.

                  BUT one thing, i just spoke to someone at the local council and he said that it would definetly have to be classed as a HMO because i have TWO people living there, he explained that if they were related then that would count, but since im renting out to student which arent related then he said it would be classed as HMO.

                  and explained that i would have to go through all the security checks and get my house inspected etc

                  then i told him that i have a 3 storey house, and he said that i would have to get a specific £3,000 alarm because of the fact that its a 3 storey house, and fire doors for the tenants etc.

                  he didnt sound too sure, but did seem like he was reading it off some paper.......so i dont know whether he's right?

                  but if he is, then does it really cost this much AND this much hassle just to rent two rooms out? im sure there must be a way around this......im not splashing out £3000 on an alarm lol

                  Comment


                    #10
                    "But under the new Bill any more than 2 unrelated persons sharing a house or flat will constitute an HMO"

                    i just read that from the article on landlordzone

                    but im wondering whether 'anymore than 2', will that include 2....or do you think it means 3 or more people?

                    thanks again guys

                    Comment


                      #11
                      Originally posted by patrickyuis View Post
                      "But under the new Bill any more than 2 unrelated persons sharing a house or flat will constitute an HMO"

                      i just read that from the article on landlordzone

                      but im wondering whether 'anymore than 2', will that include 2....or do you think it means 3 or more people?

                      thanks again guys
                      Suggest you post on the HMO forum, as this may catch other members eyes.

                      Its always best that you check with your Local authority as you have already done...as interpretations can vary from place to place. Doesn't mean to say that the person you spoke to is correct, or I am either....I just go on what I have researched for myself. It would be financially be worth your while to argue your case for sure with your local authority.

                      Did you specifically say that you owned the home and wanted to take in 2 lodgers? Saying 'students' is a bit like a red rag to a bull.
                      If he thought that you were a tenant also then 3+ is an HMO.

                      There is loads of evidence on the net that 2 lodgers are acceptable, including Tessa Sheperston (residential lettings specialist lawyer) on her site.

                      http://66.102.9.104/search?q=cache:u...gl=uk&ie=UTF-8

                      http://www.landlordinfo.co.uk/whatisanhmo.php look under 'exemptions'
                      All posts in good faith, but do not rely on them

                      * * * * * ** * * * * * * * * * * * *

                      You can search the forums here:

                      Comment


                        #12
                        Paragraph 7 in Schedule 14 to Housing Act 2004 states clearly that "Any building which is occupied only by two persons who form two households" is NOT a HMO except re Part I of Act (Housing Conditions/standards/improvement notices/etc.)
                        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                        4. *- Contact info: click on my name (blue-highlight link).

                        Comment


                          #13
                          Originally posted by jeffrey View Post
                          Paragraph 7 in Schedule 14 to Housing Act 2004 states clearly that "Any building which is occupied only by two persons who form two households" is NOT a HMO except re Part I of Act (Housing Conditions/standards/improvement notices/etc.)
                          hmmm....so when it states TWO people would that include myself? or TWO additional ppl?

                          thanks

                          Comment


                            #14
                            Originally posted by patrickyuis View Post
                            hmmm....so when it states TWO people would that include myself? or TWO additional ppl?

                            thanks
                            If you are owner and occupy it, para. 6 (not 7) would apply.
                            It states that property not a HIMO if occupied only by owner, his household, and "no more than such number of other persons as is specified...in regulations...", ie in a Statutory Instrument. I don't know if there is any such SI yet. Also, para.6 does not apply to converted block of flats under s.257 but can apply to individual flats!
                            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                            4. *- Contact info: click on my name (blue-highlight link).

                            Comment


                              #15
                              couple looking to rent a house in belfast

                              im looking to rent a house in belfast how do i search for lanlords in belfast

                              Comment

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