Cheap renting v's staying on the property ladder

ooobedoo

I will have to check this out, I have been turned down since from another policy since taking this one......

Andy_L

What about renting out your current property? or is the rental yield not enough to cover the mortgage.

ooobedoo

WRT renting the property, I'm not really the brightest button in the box and my husband is in the forces, I will have 2 kids and work full time and worry about things going wrong. I know that there agents who can work out all this stuff but I presume they still need contingency money in case anything goes wrong and I would stress about it. The mortgage is £600 a month, if it was for a rental market I presume we would need different type of mortgage that is more expensive, then pay income tax and stuff like that???

glamourpug

I'm about to do almost the same as lynzpower. me and my OH both live in shared-ownership flats at the mo but we're planning for him to move in with me for a short time, rent his flat out, then I'll rent mine out and we'll rent another place together. we've done some vague maths and we'll be better off. but it's not primarily about money-saving - that's a bonus - it's about lurve....

DOZYMARE

ooobedoo - you could rent out your house on your existing mortgage. You are supposed to tell your mortgage provider and they then make a decision about whether they will increase your rate. I rented out my flat for a year without telling them, I had redirect on my post so they were none the wiser. At the end of one year I decided I wanted to carry on renting it out and swapped over to a buy to let mortgage at a slightly higher rate.

You can get managing agents to manage your property. Mine asked for a holding deposit of £200 and they ask for it to be topped up when it is low. They also charge a fee of 10% of the monthly rent for collecting it. I find managing agents well worth the money.

You only pay tax on the profit from renting once you have paid all other costs like mortgage, insurance, managing fees etc. You may well find there is no profit it in.

If you keep your existing property you also have the worry about what the housing market is going to do and you may lose the equity in the property if prices drop.

Tough choices.

Tassotti

Generally, lenders don't take much of an interest as long as they are getting their money every month.

However, this could invalidate the buildings insurance.

Also, if the place burnt down killing the tenant, you would be facing serious prison time.

Always tell the lender and get appropriate LL insurance with personal liability.

lynzpower

@glamourpug

A fly in your ointment, have you checked you are able t osublet your SO flat? Im not able to do so, so thats why im selling

glamourpug

weeeeellllll, I'm not absolutely certain but I have done it before for 6 mths with an estate agent who I think did inform the housing assoc. others in my block also have done/are doing it and the consensus of opinion seems to be that the housing assoc couldn't give a **** as long as they're getting their rent!