Where to start

hanb

Hello everyone,

I'm pickling my brain looking at various websites so thought I'd come and see whether you guys might be able to help me!

I'll try not to ramble on!!

I have (jointly) inheritted a house which has been let out for the past 18 months - the tenants have now given notice and I'm thinking about selling to buy my first home.

I've worked out that whilst the house has been rented out I earn less than 2% on my investment so it seems to make sense to sell.

I would be looking to buy for around 170k and would have an 80k(ish) deposit.

I'd like to rent a spare room out on the government rent a room scheme and get £350 a month from that but don't want to rely on that money to make my monthly payments. What I'm hoping for is to be able to borrow 90k over 25 years which would mean i could still live comfortably, and then make an extra annual payment of the rental income. According to the repayment calculator I could be mortgage free in 12 years!

I know there's fee's that can be imposed for extra payments and that's something to take in to account but I think what I'm asking is, on the whole, is this a good idea or have i missed something glaringly obvious??

According to my calculations, this would leave me in a much better financial situation than renting my current flat and renting out the inherited property at 2% return. I'm just concerned I'm missing something important!!


Any help would be appreciated.

Hannah

Thrugelmir

In principle the ideas fine.

The issue may be sharing your property with a lodger for the next 12 years.

Not my ideal situation.

The lodger will cost you money. Utility bills etc. General wear and tear. So not entirely profit.

holly_hobby

You may also need to factor into your costings CGT liability, which will occur if any gain realised on disposal exceeds your annual cgt allowance. (base point for calc being the value of the property when inherited )

Holly

Southernman

I have a lodger and he's great! So it's not all bad news. I'm not planning to live in my flat forever though and i'll probably go onto btl eventually but for the short term he does pay my mortgage!