Tax from renting when most of rent goes into paying off mortgage

Pixie5740

kinger101 wrote: »

It's a shame there's not a McG_M.

I have thought about writing guides for private tenants in Scotland but it's a bit more complicated as there are 3 types of tenancies that can be in place, well 4 if you count the pre-02/01/1989 regulated tenancies. Shelter Scotland's website is a good resource for information.

getmore4less

BoGoF wrote: »

I do realise this. I was talking purely from a monthly real terms cash position and OP saying he did not want to lose money. Unless the property is gaining more value than the monthly cash loss he is losing money.

Not the case.

on monthly cash flow the deficit has to be sufficient for there to be no capital payment before there is a real loss.

da_rule

G_M wrote: »

Please note that all the links I provided in post 7 are written from an Englandd/Wales perspective.

You are aware I hope that in Scotland all landlords must be registered with the council?

You need to register in Wales as well don’t you?

https://www.rentsmart.gov.wales/en/landlord/landlord-registration/

lesterxburnham

00ec25 wrote: »

rental profit after non finance costs and partially restricted mortgage interest = 1,925

tax payable 1,925 x 40% = 770
add back 25% balance of mortgage interest relief capped at 20%: (7*300= 2100 x 25% = 525. check if £525 is less than the property profits (1,925), yes it is, therefore use finance costs not deducted above in capped relief calculation: 525 x 20% = 105

net post tax profit in cash terms: 1,925 - tax (-770 + 105) = 1,260

thanks for that!

generally, even after I pay the tax, someone is paying off 80% of my mortgage, how is that a bad deal? some users hinted on selling - well, if I were to sell, then what investment would give me at least £400 a month?

getmore4less

lesterxburnham wrote: »

thanks for that!

generally, even after I pay the tax, someone is paying off 80% of my mortgage, how is that a bad deal? some users hinted on selling - well, if I were to sell, then what investment would give me at least £400 a month?

How did you get to £400pm?

rtho782

lesterxburnham wrote: »

thanks for that!

generally, even after I pay the tax, someone is paying off 80% of my mortgage, how is that a bad deal? some users hinted on selling - well, if I were to sell, then what investment would give me at least £400 a month?

I'm making about £600 a month mining bitcoins with 6 1080tis.

So that's an option I guess

getmore4less

How much real cash do you have invested in this place( include every fee not just the deposit), how big is the mortgage and what rate?

Crashy_Time

MobileSaver wrote: »

Well there are over 10,000 users a day on the HPC site who by definition (and completely misguided and flawed logic) have been paying off landlord's mortgages for well over a decade so for many the dream is actually a reality.

That is exactly the type of logic that got the OP into the pickle that he is in..;)

Crashy_Time

lesterxburnham wrote: »

thanks for that!

generally, even after I pay the tax, someone is paying off 80% of my mortgage, how is that a bad deal? some users hinted on selling - well, if I were to sell, then what investment would give me at least £400 a month?

The plan comes unstuck when you have voids? How many tenants have you had?

Cakeguts

lesterxburnham wrote: »

thanks for that!

generally, even after I pay the tax, someone is paying off 80% of my mortgage, how is that a bad deal? some users hinted on selling - well, if I were to sell, then what investment would give me at least £400 a month?

It isn't giving you £400 a month because that goes on repaying the mortgage. You are losing money each month. All that needs to happen is that you get a bad tenant and then you will lose a seriously lot of money.

Because you didn't do any research you are trying to make a profit on a property that isn't suitable as a rental property.