My plan to rent and tips

SAMMYE_2

I currently rent a one bedroom flat through the Council on a direct let scheme I get £644 a month rent.

I am living with my Dad and am free to do so for as long as I want but am planning to live with him for at least another 2 years.

My Flat is worth around £115k - £120k. I plan to have paid off around 40% of my mortgage in those two years. My flat should then only cost me around £150 - £250 a month mortgage.

I should also have saved around £20k... I want to buy at least a two bedroom house next although I may need to save another £40k for this which could take just under another year.

My main dream really is to get ahead with a little bit of sacrifice.

I think I will probably move back in the one bedroom flat (as it will be low mortgage and buy a two bedroom house which I will rent out on the basis that I will try and pay off as much of the mortgage as quickly as possible again.



Does anyone think my plan is a good one or can anyway make any alterations to my plan which might benefit me better?

Cheers guys just trying to get some advice and suggestions of brainer and more experienced people.

G_M

Bear in mind mortgage interest can be offset against the tax on your rental income, so if the mortgage is paid off, your tax liability goes up.

More info on renting here.

taxsaver

Personally I'd live in the two bed one as then you will be able to get a better mortgage than as a BTL (probably), plus it is also better for you from a CGT point of view if you do have it as your PPR for a period.

Keep letting out the one bed.

jamie11

If you live in the 2 bed place you could also take a lodger, you are allowed a certain amount tax free. Lodgers are easy to get rid of if you need to.

SAMMYE_2

taxsaver wrote: »

Personally I'd live in the two bed one as then you will be able to get a better mortgage than as a BTL (probably), plus it is also better for you from a CGT point of view if you do have it as your PPR for a period.

Keep letting out the one bed.

Thanks very much great advice. :-) I suppose I was only thinking about renting it out as the mortgage would be more expensive and I would be able to cover it with the rent received.

What is PPR though?

Much appreciated.

SAMMYE_2

jamie11 wrote: »

If you live in the 2 bed place you could also take a lodger, you are allowed a certain amount tax free. Lodgers are easy to get rid of if you need to.

Oh yeah brilliant idea!

Oliver_Green

SAMMYE wrote: »

I currently rent a one bedroom flat through the Council on a direct let scheme I get £644 a month rent.

I am living with my Dad and am free to do so for as long as I want but am planning to live with him for at least another 2 years.

My Flat is worth around £115k - £120k. I plan to have paid off around 40% of my mortgage in those two years. My flat should then only cost me around £150 - £250 a month mortgage.

I should also have saved around £20k... I want to buy at least a two bedroom house next although I may need to save another £40k for this which could take just under another year.

My main dream really is to get ahead with a little bit of sacrifice.

I think I will probably move back in the one bedroom flat (as it will be low mortgage and buy a two bedroom house which I will rent out on the basis that I will try and pay off as much of the mortgage as quickly as possible again.



Does anyone think my plan is a good one or can anyway make any alterations to my plan which might benefit me better?

Cheers guys just trying to get some advice and suggestions of brainer and more experienced people.

Hi There Sammye

Just read your post and my suggestion would be to speak to an independant financial advisor!

Most, normally give advice for free but commonly start to charge if you proceed with one of their products.

Make sure you ask them about charges first, so as to limit finger burning and if they only charge for products then you are fairly safe as you not obligated to take up the product they suggest.

Again clarify everything first...

Take care, Oliver Green

chewmylegoff

G_M wrote: »

Bear in mind mortgage interest can be offset against the tax on your rental income, so if the mortgage is paid off, your tax liability goes up.

More info on renting here.

i'd rather pay 40p tax than £1 of mortgage interest, personally, but each to their own.

SAMMYE_2

Oliver_Green wrote: »

Hi There Sammye

Just read your post and my suggestion would be to speak to an independant financial advisor!

Most, normally give advice for free but commonly start to charge if you proceed with one of their products.

Make sure you ask them about charges first, so as to limit finger burning and if they only charge for products then you are fairly safe as you not obligated to take up the product they suggest.

Again clarify everything first...

Take care, Oliver Green

Cheers I think your probably right maybe I should do that at some point... I always worry that they will just offer things that benefit them best!? One of my friends was a financial advisor and he was a right sly git so it has kind of put me off.

There are a lot of very clever and experieced people on here so just thought I would see what some of them suggested to begin with at least.