Renting out my first property

swarby_2

I am in the process of buying my first place, now i hope this doesn't seem like a silly question but once i have bought it and done it up could i give it to the council on one of the 3 year guaranteed rent schemes and just go and but another place? i doubt the rent would cover the mortgage but would only be a couple of hundred short a month which i could afford to make up alongside a new mortgage, this just seems a bit easy and i fear i must be missing something as otherwise surely everyone would be doing this!!!

mystic_trev

Just send me £150 each month, that way you'll be £50 better off and not have a mortgage to worry about!

LOL

djm1972

If you are planning on doing that make sure you get a freehold rather than a leasehold property; or if you do get a leasehold make sure that the freeholder is happy for you to let it to social tenants as many are not...

swarby_2

the property i am buying is on a council estate so it would be rather hypocritical if they wouldn't let me rent it out to social tenants!! lol


does anyone have any experience of these council run schemes?

Amitoocautious

Why would you want to subsidise the rent when its unlikely you are going to get the capital gains of the past few years!

swarby_2

sorry, i dont get what you are saying...i am extremely unknowledgable about this....

Mozette

I think what amitoocautious means is, why would you rent a place out at a loss when the property market is slowing down, and you may not see a huge rise in the value of your property?
I still think in the right circumstances property is a good thing, but just my opinion.

Zammo

I think what you're planning on doing is admirable.

Gordon Brown needs people like you.

barnaby-bear

swarby wrote: »

I am in the process of buying my first place, now i hope this doesn't seem like a silly question but once i have bought it and done it up could i give it to the council on one of the 3 year guaranteed rent schemes and just go and but another place? i doubt the rent would cover the mortgage but would only be a couple of hundred short a month which i could afford to make up alongside a new mortgage, this just seems a bit easy and i fear i must be missing something as otherwise surely everyone would be doing this!!!

You'd need a BTL mortgage. Most BTL mortgages insist rent is 130% (i.e. bigger than mortgage), mortgage rates seem to be creeping up, you may not be able to remortgage even if you found a BTL mortgage in the first instance willing to let you subsidise. You'll also need to pay maintenance, you maybe willing to wait a week without hot water to find a cheap plumber tenants wont and would demand expensive emergency plumber, you need to pay BTL insurance which is more expensive. Also you will be liable for 40% CGTax (although taper can reduce but complicated) on sale price if you sell reducing your profit from house rises. You'll have to pay tax on any rent above the interest on the mortgage.

swarby_2

right, all sounds very complicated, we speak to the bank and see what they say, as far as plumbing is concerned, thats not a problem....i am a plumber!!

nelly_2

swarby wrote: »

sorry, i dont get what you are saying...i am extremely unknowledgable about this....

really?......:)