Itâs a matter of opinion. Over time you get capital growth as well as an income stream. Decent location and youâre grand.
Yes.
All interest on the mortgage relating to the rental.
You also have the minefield of HAP to deal with. Screen these by just having email as contact and flush out the spoofers by looking for salary certs, employers letters etc. All mortgage interest deductible so if youâre at start of mortgage this will be of benefit. Keep any receipts for appliances, couches etc as these can be used to
A lot of capitalist pigs outing themselves here
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Sigh
No we donât have a mortgage at moment we are renting ourselves but have a big deposit saved up over a few years for the right place and mortgage approval for a few more months in the back pocket. Market is gone very stagnant now though and with prices likely to take six months or a year and then fall I am thinking we should buy something for half or two thirds of what we are willing to spend on our long term home and put a big lump sum in and therefore have a very small mortgage on a variable rate that all going well might be repaid in 2-3yrs. All the while instead of paying rent weâll own something. Then have an asset of a mortgage free house in the suburbs to rent out while we then move on to the next property which hopefully will be the one we stay in long term.
So a three year plan but i understand with these things something comes up and that three year plan turns into six years. And we would also in the meantime have thrown away first time buyer status meaning weâve to have saved up 20% of the price of the next house. So say itâs âŹ250k purchase next time weâve to have âŹ50k of a deposit, which might take time after paying off a mortgage on house number one in as fast a time period as possible.
Not sure if itâs worth all the hassle and instead just keep renting until a proper place comes up and avoid becoming a sort of âreluctant landlordâ. Our current rental lease is up soon but can buy a few more months if we like but we are sort of ready to move on from here. Also framing my thinking is I am due to fall in for the family home someday (hopefully a long way off and might never happen if my parents outlive me) and would be reluctant to sell the house I grew up in so could become a landlord anyway in that case, so would it be just as easy be a landlord on two houses as one?
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I thought a rural type such as yourself would have a site
Hard to give advice without knowing your specific financial circumstances. However if it was me in your position Iâd look to buy âyour homeâ before a rental property. Owning your home with no or a small mortgage is a great freedom. You can add the rental property later if you want to.
The rental property would be our home until the mortgage on it is paid off (hopefully in three years), because as I say I have looked into it and can get something in a decent area and with the deposit we have in place would allow us a small mortgage under the minimum five year term. Have the bank any problem if you pay this back in three years? I presume this is fine under a variable rate. So onwards we move then to our next house in a few years but have a mortgage free one in the back pocket to rent out to professionals. My concern otherwise is to go back renting and end up in a cycle that could last two years ago knows, and all the while nothing to show for it.
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Iâm not warm on the idea of building, too many unforseen costs and also time frame is too long.
Think youâre over complicating it. Rent for the next year. Prices will prob drop 20% and with that much cash you could prob get it for cheaper again. Have your ducks lined up on the mortgage side but luckily it doesnât sound like you need a big one. Being a new landlord for that short time is not worth it IMO
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Being a landlord is, by and large, a pain in the ass. Only you can decide whether itâs worth it to you or not. Even with good tenants, itâs a nuisance. With bad ones itâs worse.
Weâve had two very good ones in our place over ten years - both east European families who keep place spotless. Little enough maintenance apart from when tenants changed and gave it refurb.
I think you are maybe misunderstanding me. Iâm not saying Iâd become a landlord for a short time, what I mean is Iâd buy a house to live in until mortgage is paid back in a few short years and then KEEP it for renting out, in the meantime moving on to another home that we hopefully buy and stay in. But what I am trying to gauge off ye is would the hassle of becoming a landlord be worth it, answer appears to be no. Iâm not ruling it out yet though. Also I may be a landlord one day anyway so could get an early head start at it here and double down.
Iâd personally sort out your home first. Dead money some say, but it is one of the few very important things in life.
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If youâve time on your hands it may be and itâs making sense financially. No harm popping down to cut the grass every 2 months to also keep eye on things. Estate agents not worth it - they just do the admin you can easily do yourself. You can specify in lease what you will look after and what tenant will. Getting a young family would be ideal. The rent a room thing would be too problematic, even if it means more return.
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If I sort out my own home first with what we want itâll be entering into 20+ years of a mortgage and this is the only window right now to extend that out a few years instead and also have a paid off house in the meantime to rent out forever more. Also who is to say it wonât take another year or two of renting before we get what we want (which is in a specific rural area). But I get what youâre saying.
Youd be better off having a bigger mortgage on the investment property for tax purposes
Its not