Advice buying a 2nd property

supa_nan

Hoping someone can give me some advice. We own our house, it's probably worth just over £200K.

We are considering renting this house out, (to my daughter) we can expect a minimum of £900 rent per month. Maybe £1100 to an outsider.
My daughter currently rents at £800 per month, and has today looked at a property for £1100 per month. :eek:

We have good credit rating. My salary alone is £24k although I don't have a fixed contract.

My old lender Barclays (Woolwich) have just given me a costing, £120K mortgage would cost me just under £500 per month repayment or £350 per month interest only. The application fee is £2000. I'm thinking the rental on this property would fund a 2nd home. Am I being realistic ?

Is there anything I should be aware of. Would I be liable for Tax on the rental income ?

I'de welcome any tips or advice. Thanks

somethingcorporate

Yes, you would be liable for tax on the income although there are a whole bunch of costs you can offset against them to minimise this.

The slight issue is would you have a deposit for the new property? Otherwise you may need to release equity from your existing home.

Your best bet would be invest a bit of time in finding a good broker to discuss all your options. It can get quite complicated with renting houses to family, 2nd homes etc. so a good broker that can penetrate the bureaucracy will be worth their weight.

Good luck!

Thrugelmir

supa_nan wrote: »

Is there anything I should be aware of. Would I be liable for Tax on the rental income ?

Yes, you would need to declare the income.