Anyone here a Landlord ? Will the property pay for itself.

CraigN

CraigN

CraigN

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Joined
30 Jul 2005
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Bristol
So myself and the GF have just bought our perfect home its our first house purchase then bang i have been offered a superb job in London which i fully intend to accept.

So i have been looking at my options of renting our property. The mother in law has been scaring my GF with talks of income tax and bills sort of trying to scare her out of the idea of moving i feel however.

Does anyone here rent a property out ? It is my only house i am aware of capital gains tax etc but for me as long as the property pays for itself in terms of covers my mortgage and fees, tax etc then i will be fine. I have assumed it would.

Of course they may be major things that break such as a boiler or something but that would have happened if i lived there and i always allow for such emergencies.

I will need to rent in London have also considered selling if it is far to much stress/financial ball ache if the property wont pay for itself.

Anyone ?
 
I am currently on a 5 year capped tracker my mortgage payments are £548 PCM If interest rates rose this could potentially rise to a maximum of £770.

Similar properties in my area depending on condition are renting for £750 - £850 PCM
 
How much are your mortgage repayments? What rental rates like in your area? Do you plan on renting as a house or as rooms? There are so many variables involved it's not going to be a straight yes or no.

Most property will pay for itself one way or another though.
 
I think you should rent it out! Im not an expert but it must pay for itself otherwise people wouldnt do it. That said however I think it is probably more suited for a long term investment but if you plan on being in London for a while then why not?

It would probably be worth letting an estate agent take car of all the management aspects if you are going to be far away.
 
You want a decent cushion between all your outgoings for the house and incoming rent, that gives you a bit of wiggle room for emergencies, or maybe if you end up with a month or two with nobody renting it. Which brings up the biggest concern of all, how easily can you rent it out, can you guarantee it will be rented out for enough months a year to not become a burden on you.
 
I have a two bed house I let out, at the moment I am making £400 a month on it but when interest rates go up i'll break even at about 6%, so the £400 is going on new boiler new windows anything I can write off to increase the value of the house and not pay tax on any earnings the past couple of years.

I've had it for 4 years and I have broke even on the basis that I plough the spare money back, I could have easily made 10 - 15% roce year on year but then had to pay 40% tax and not have spent money increasing the value bit by bit.

In the end I will have to pay capital gains but my plan is to pass the property to my kids either as a house or a income, I plan never to sell it
 
the area is very popular its within walking distance of Bristol city centre and temple meads station etc but not the sky high prices of actually living in the city centre.

I would like to rent it out as a whole house and i think it would rent very easily having rented myself in this area prior to buying.

The cushion is what im concerned about if i have to start paying 40% tax on any rental income that cushion will be very small.
 
But the cushion will build over a couple of years if anything goes wrong, the first years you'll have nothing to cushion, but that's business
 
Rememebr to keep money aside should the boiler blow up/roof start leaking/etc. Getting stuff like this fixed can wipe out some of your gains :(
 
Will your mortgage lender allow you to rent it?
Read the small print, as they have different deals for landlords (which are often a higher rate of interest)
 
CraigN said:
the area is very popular its within walking distance of Bristol city centre and temple meads station etc but not the sky high prices of actually living in the city centre.

I would like to rent it out as a whole house and i think it would rent very easily having rented myself in this area prior to buying.

The cushion is what im concerned about if i have to start paying 40% tax on any rental income that cushion will be very small.
Click to expand...
You can offset mortgage interest payments and household maintenance costs against tax.

You only pay tax on capital repayments and "profit". No profit = no tax.

eatcustard said:
Will your mortgage lender allow you to rent it?
Read the small print, as they have different deals for landlords (which are often a higher rate of interest)
Click to expand...
In reality they don't care so long as you make the payments.
 
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Go for it! Makes much more sense and you won't regret it in the future.
I have had my house rented out in England for the past 5 years with the best tenant ever, so in turn I have not overly raised the rent (once in the 5yrs).
Last year I had to replace the boiler which was bit of an expense, but now that that has been done, I'm not expecting too many major expenses.
At the moment it makes a little bit of extra cash PM, but I've always said, as long as it covers itself PM I'll be happy.
 
You may well find the property won't completely pay for its self. In fact I think it's quite the norm for it not to pay for its self completely.
 
I've had 3 sets of tenants, first set were OK long let but left the place in need of a clean so docked their deposit by 1/2ish, second left it cleaner than I gave it to her, third was same as first just in need of a deep clean paid through deposit.

All depends on who you let to / location / area and general population

My current tenant is a council tenant, I get paid every month on time and she keeps the place nice and clean, she lived over the road when we lived there and didn't know she was a council tenant
 
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