Gallygirl's "A journey of 121,226.67 pounds begins with a single penny" diary

gallygirl

I've never really found anywhere so let me know how you get on :rotfl:.

Basically, I'd advise you to not look at big houses or old houses, less demand for former, too expensive on upkeep for latter. I also wouldn't go for student lets (no uni near me anyway) as I wouldn't want the annual hassle. You can go for a nice place to let to professional people who may move on fairly quickly, so you'll get more voids, or an ex-council or cheaper private house where you'll get 'council tenants' who'll want to stay put. Also see what is happening locally about the bedroom tax - I reckon 2 beds will become more popular.

Rightmove is great as you can map out areas you're interested in. Set up a simple spreadsheet showing rental values. Then look at houses to buy and work out yield. Gross yield (simply the annual rent as a % of value) gives an indication of most profitable types/areas. Look at cheaper areas (but not the worst :eek:).

Tax wise it's a bit complex. All buying (and later, selling) costs are not tax deductible (but can be used to offset capital gains when house prices rapidly increase and you sell at a massive profit :rotfl:). The interest part of the mortgage is tax deductible, as are all repairs and maintenance deemed necessary to stop deterioration of the property. So you could redecorate when empty but not claim for gold leaf wallpaper . Insurances etc are tax deductible and you can claim a small amount of non-receipted expenditure for mileage etc.

We aimed initially to have the mortgage paid off in 25 years by the rental income, so say a 20k investment would be worth 100k with no further financial input (and that's assuming 0 house price increases). No chance of achieving that elsewhere if you're not prepared to invest in the stock market. Over time we've paid all the excess income back in so it will be paid off sooner and we can then live on rental income.

Not sure if you or Mr Radish are higher rate tax payers? If you both are then that is a killer. If one if, I believe it's possible to buy the house jointly but determine that all the rent goes to the 20% taxpayer.

It's no good if you stress over things, and you need to treat as a business. You need to sort out landlord insurance, gas safety, protect the deposits and have a list of tradesmen you can call on at short notice.

Happy to advise further with my limited knowledge :cool:. I don't recommend going on the MSE forum as they're scary :eek:.

Do you want me to help you look for somewhere ?

Staffordia

Hi Gallygirl, this post is of interest to me, as I have just inherited a third of a rental property, along with my two siblings. Unfortunately I am (only just) a higher rate taxpayer, so expect to pay on the current yearly rent around £800 in additional tax. There is no mortgage on the flat, so the rent minus deductions is profit.

Radish72

Thanks GG, shows how much of a novice I am, never even thought about tax implications

But I guess it could mean a couple more spreadsheets could be played around with

nattypants

GG you are a financial guru:T Between you and Ed it's like a free subscription to moneywise:D

gallygirl

nattypants wrote: »

GG you are a financial guru:T Between you and Ed it's like a free subscription to moneywise:D

:rotfl::rotfl::rotfl::rotfl::rotfl:

Hardly :rotfl:

Staffs, I suppose the bonus is that you earn enough to pay higher rate (that's what I tell myself :cool:)

Nice peaceful day spent on spreadsheets :T and in garden. Decided my lovely silver birch has to go , just takes up too much light. Sitting listening to wind going through it now though. Also listening to 2 territorial blackbirds doing The Voice auditions (can't actually see them, but the one above me is best ).

Off to take nail varnish off and have a bath. Rock n roll

ahem_47

GG - 7 more sleeps!!!!

gallygirl

ahem_47 wrote: »

GG - 7 more sleeps!!!!

:rotfl::rotfl::rotfl:very funny :rotfl::rotfl::rotfl:

ahem_47

i have my moments GG

6 more sleeps!!!!!!

gallygirl

Just for you El, update after mortgages have been paid:
Mortgage 1 - interest dropped from £2.01 a day to £1.99 but will go back up to £2. Next month will drop to £1.98 then back up to £1.99, but the £2 barrier will have gone
Mortgage 2 - interest dropped from £2.26 to £2.24 and stays at that.
Mortgage 3 - interest dropped from £1.50 to £1.48, back up to £1.49.
Overall: £5.77 down to £5.72 then back up to £5.73.

Total net debt 104k :T.

Mr GG debt 45.9k :T.

Onwards and downwards folk, onwards and downwards :j.

ahem_47

GG - 2 more sleeps!!

PS - how's your bottom? Leave you to explain away ....