New buy to let tax on low income

AdrianC

jamels2 wrote: »

Well I am looking at properties at 200k each which rent for £8-900 a month and with mortgages about £300 a month interest only.

At 4.5% interest, £300/mo for each mortgage will give you £80k per property. Do you have £360k + fees + SDLT to fund the rest?

Let's say you actually achieve this £1500/mo gross income - have you taken fees, voids, maintenance, repairs into account? What sort of cash buffer are you going to leave yourself for the winter month when one property's empty after you've had to evict a non-paying tenant who's trashed the place, one is being redecorated and recarpeted during a void - and the boiler in the third goes bang?

And where are you living?

By the time you figure out your actual net income, I think you're going to be doing well to pay ANY income tax, let alone be near to worrying about higher rate.

Then how do you plan on building up a fund to repay the £240k you still owe on these interest-only mortgages? Or, in 25yrs time, will you sell them all and be left with zero income?

marksoton

Others have crunched the numbers, i'll just say it.

You're whole plan is BS.

FBaby

And what are you plans when you come to the end of the mortgage terms? Do you sale and live of the profits for the rest of your life? In this case, you better work out there will be enough equity to do so to your satisfaction, or do you intend to pay the capital each year, in which case, will you have enough to live on until they are all yours?

buglawton

AdrianC wrote: »

At 4.5% interest, £300/mo for each mortgage will give you £80k per property. Do you have £360k + fees + SDLT to fund the rest?

BTL rates for creditworthy borrowers and 75% LTV are more like 2.5% at the moment. Many small BTL owners are working with modest amounts of inherited money too.

AdrianC

buglawton wrote: »

BTL rates for creditworthy borrowers and 75% LTV are more like 2.5% at the moment. Many small BTL owners are working with modest amounts of inherited money too.

Woo. Let's base our calculations on historically low borrowing rates rather than something more medium-term realistic. What could possibly go wrong?

jamels2

Wow so much anger in the responses, it's a wonder anyone lets out property with all the scare stories. I guess nobody here likes people making money from capitalism and leverage. Well what if you have a tenant with no intention of buying that looks after the property and pays a fair rent? who else they gonna rent from? How else I gonna make an income without giving up 12 hours of my time 6 days a week? Thanks.

Thrugelmir

jamels2 wrote: »

Wow so much anger in the responses, it's a wonder anyone lets out property with all the scare stories. I guess nobody here likes people making money from capitalism and leverage. Well what if you have a tenant with no intention of buying that looks after the property and pays a fair rent? who else they gonna rent from? How else I gonna make an income without giving up 12 hours of my time 6 days a week? Thanks.

Letting property can be profitable. However you have to know what you are doing. No different to running any business. Leveraging is double edged. Not a guaranteed way of doing nothing to make money.

marksoton

jamels2 wrote: »

Wow so much anger in the responses, it's a wonder anyone lets out property with all the scare stories. I guess nobody here likes people making money from capitalism and leverage. Well what if you have a tenant with no intention of buying that looks after the property and pays a fair rent? who else they gonna rent from? How else I gonna make an income without giving up 12 hours of my time 6 days a week? Thanks.

You have to know what you're doing.

You clearly don't. If you did you wouldn't work 72 hours a week in a job you can't wait to drop.

marliepanda

jamels2 wrote: »

Wow so much anger in the responses, it's a wonder anyone lets out property with all the scare stories. I guess nobody here likes people making money from capitalism and leverage. Well what if you have a tenant with no intention of buying that looks after the property and pays a fair rent? who else they gonna rent from? How else I gonna make an income without giving up 12 hours of my time 6 days a week? Thanks.

How are you going to fund three property deposits.


If you have a good 150k lying around for that plus buying fees and the larger stamp duty, you probably have a good enough savings net to cope.

Kynthia

It's not anger it's exasperation. Too many people become landlords without doing the proper research on the legislation and tge finances. Then innocent tenants suffer. I'm sure b&b, holiday let, and restaurant forums are full of naive people thinking wouldn't it be lovely to do that and make money, and full of exasperated members who know the reality is different.