Should I buy flat for cash or get a mortgage

MrHelpful

Jonbvn wrote: »

You do realise that the rental income is taxable? As such, it is generally a good idea to have a mortgage, so that you can offset mortgage interest against tax.

If you are only getting 0.5% interest from savings then you are not trying. If you lock it up in FR ISA for 5 years, you can get close to 5%, virtually risk free.

For a return of only 5%, IMPO a property investment just does not stack up given the time you have to spend on it.

I do realise income is taxable but if I place it in my parents name and they are earning nothing then I guess they will have to pay nothing. I've already used up my ISA allowance for this year therefore no I can't get 5% risk free. 5% isnt great I agree but I am continually frustrated with the bank and how it keeps wanting to sell me products and take a hoof off on commission

MrHelpful

I think I know where you are coming from on this therefore if my parents were to use "their" savings and put it in the house and be shown as having very little in the bank they may get some benefits. At the mo, they claim nothing off the state and havent for the last 3 years... they are digging into their savings. They have no other income nor pension. They still have another 5 years to go before they get the state pension.

The long term costs of the flat as I see it are - ground/annual maintainance = £600/year. Its only 7 yrs old therefore dont see needing a new roof coming into contention just quite yet