Diary of a Buy to Let Purchase Part 18 - Always open the envelope
Following on from my last blog where I pontificated about doing my own accounts so that I could understand the process, on the Friday before August Bank Holiday, with just five working days before my deadline and me having made the sum total of ZERO PROGRESS on getting anything together, I cracked and called an accountant.
It was a bit of an SOS call, but he was wonderful. I sent over bank statements, my completion statement from when I purchased the property, and a few other bits of correspondence from Companies House and three days later, hey presto! I had a set of accounts which were duly filed on 31st August with two working days to spare - well in!
I am yet to receive my bill but I imagine this will be a few hundred quid which, to my mind, was money really well spent. So really, I should be breathing a sigh of relief and relaxing for the next twelve months.
However...
Whilst scrabbling around trying to find my bank statements and the like, I came across an unopened envelope from my solicitor. So, only 17 months later, I opened it and inside I found the Energy Performance Certificate.
Now, for those who don't know, as of April 2018, landlords granting tenancies to new or existing tenants must ensure their properties have a minimum energy performance rating of E. (If the tenant is already in situ, you get an extra two years to comply). Anything below this will mean that it is illegal to rent the property out and a penalty of up to £5,000 can be levied for breaching this.
So, what rating does my property have? F bordering on G. G is the lowest score you can get. If this was a GCSE, basically, I managed to turn up to the exam and write my name. As you can imagine, I'm a tad worried.
As my property is already tenanted on a rolling AST basis, I might be lucky - if the tenants stay between now and April 2020, I'll have a lovely long time to make the necessary improvements. But, if they move out, I could be snookered.
Also, I must admit to feeling pretty terrible about owning a property which is leaving a carbon footprint the size of Wales. Just call me Swampy. So, I intend to make good the property sooner rather than later.
My real issue is that the property is a flat, so in terms of the building itself, I am not entirely sure there is much I can do to affect how energy efficient it is. However, reading through the report it does look like I need:
- New windows
- New heating - it's currently underfloor
- New means of heating the water - currently an immersion
- More low energy lighting
Having mulled this over, I am tempted to get an energy consultant round to have a nosey and see what they recommend so I can improve on matters.
As you can probably tell, my initial landlord smugness is rapidly waning...
Diary of a Buy to Let Purchase
Follow Jeni as she recounts her experiences of becoming a buy to let investor for the first time.
Part 1 - It was that or a Range Rover
Part 2 - I've made £800 already and I haven't got the mortgage yet
Part 3 - The demise of Nathaniel Pig
Part 6 - Business bank account interview or Center Parcs?
Part 8 - The method behind the madness
Part 9 - Join me in a buy to let fist pump?!
Part 10 - The silence is deafening
Part 11 - Throwing toys out of prams
Part 12 - Stuck with the Mini... for now
Part 14 - The end of my sad little tale...
Part 16 - A year on my buy to let portfolio grows by default
Part 17 - If Carlsberg made tenants - shame the same can't be said for the tax man
Part 20 - Buy to let mortgages and tenants are like buses
You may also be interested in:
Setting up an SPV Limited Company
Buy to let lenders which offer mortgages to limited companies usually require the limited company to be an SPV (Special Purpose Vehicle). Jeni explains what one is and how to get one.
Stamp Duty FAQs
Simon Whittaker, CFO answers the most commonly asked questions around SDLT - including information on mixed use properties and non-residential Stamp Duty rates.
How to maximise borrowing and remortgage your buy to let within 6 months of purchase
It can be difficult for landlords to remortgage within six months of purchase let alone maximise borrowing, so it’s refreshing to see that Keystone will lend more than most in these scenarios.
Residential Stamp Duty Calculator
Non-residential Stamp Duty Calculator
7th September 2017
