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Buying house for CASH from Son-Letting it out to His ex-Subsidized rent.

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Comments

  • blindman
    blindman Posts: 5,699 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Comms69 said:
    But will you actually make money on it? Reduced rent + costs generally means less profit. 

    £180k in cash could easily be better invested. Hell lego sets would be a better investment than the potential drama once she has a partner. 
    This is a long term investment so I would hope the value of the house goes up.
    I understand there will be initial costs of SD + solicitors 
    But they will not have to use an Estate agent, move out 

    What is the issue with the ex getting a new partner? This is what she hopes to do as does my son, they want to move on but the house is the sticking point as she cannot afford to move out, she cannot buy out my son's half and could not afford the mortgage should that happen.


  • Comms69
    Comms69 Posts: 14,229 Forumite
    10,000 Posts Third Anniversary Name Dropper
    blindman said:
    Comms69 said:
    But will you actually make money on it? Reduced rent + costs generally means less profit. 

    £180k in cash could easily be better invested. Hell lego sets would be a better investment than the potential drama once she has a partner. 
    This is a long term investment so I would hope the value of the house goes up.
    I understand there will be initial costs of SD + solicitors 
    But they will not have to use an Estate agent, move out 

    What is the issue with the ex getting a new partner? This is what she hopes to do as does my son, they want to move on but the house is the sticking point as she cannot afford to move out, she cannot buy out my son's half and could not afford the mortgage should that happen.


    The costs of the rental itself - gas safety checks, maintenance, repairs, tax. 

    Plus - @greatcrested - if the ex remains in situ wouldnt this be a different type of tenancy? I forget, but i'm pretty sure it cant be an AST

    As for the drama, that tends to come to a head when someone enters kids lives
  • blindman
    blindman Posts: 5,699 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Comms69 said:
    blindman said:
    Comms69 said:
    But will you actually make money on it? Reduced rent + costs generally means less profit. 

    £180k in cash could easily be better invested. Hell lego sets would be a better investment than the potential drama once she has a partner. 
    This is a long term investment so I would hope the value of the house goes up.
    I understand there will be initial costs of SD + solicitors 
    But they will not have to use an Estate agent, move out 

    What is the issue with the ex getting a new partner? This is what she hopes to do as does my son, they want to move on but the house is the sticking point as she cannot afford to move out, she cannot buy out my son's half and could not afford the mortgage should that happen.


    The costs of the rental itself - gas safety checks, maintenance, repairs, tax. 

    Plus - @greatcrested - if the ex remains in situ wouldnt this be a different type of tenancy? I forget, but i'm pretty sure it cant be an AST

    As for the drama, that tends to come to a head when someone enters kids lives
    OK so I need to look at types of tenancy
    Costs of rental can be offset t against tax due.
    Wife is non tax payer at the moment.

    I leave the dram to the TV soaps.
  • Comms69
    Comms69 Posts: 14,229 Forumite
    10,000 Posts Third Anniversary Name Dropper
    blindman said:
    Comms69 said:
    blindman said:
    Comms69 said:
    But will you actually make money on it? Reduced rent + costs generally means less profit. 

    £180k in cash could easily be better invested. Hell lego sets would be a better investment than the potential drama once she has a partner. 
    This is a long term investment so I would hope the value of the house goes up.
    I understand there will be initial costs of SD + solicitors 
    But they will not have to use an Estate agent, move out 

    What is the issue with the ex getting a new partner? This is what she hopes to do as does my son, they want to move on but the house is the sticking point as she cannot afford to move out, she cannot buy out my son's half and could not afford the mortgage should that happen.


    The costs of the rental itself - gas safety checks, maintenance, repairs, tax. 

    Plus - @greatcrested - if the ex remains in situ wouldnt this be a different type of tenancy? I forget, but i'm pretty sure it cant be an AST

    As for the drama, that tends to come to a head when someone enters kids lives
    OK so I need to look at types of tenancy
    Costs of rental can be offset t against tax due.
    Wife is non tax payer at the moment.

    I leave the dram to the TV soaps.
    Sorry that's a question for another poster. I believe this would be a protected tenancy, so you could never evict. I'm hoping that poster can clarify as it's been a while since i've looked at it. 

    Youre mistaken though. You cant offset costs against tax code. you still pay them. You deduct costs from your income, to give you a profit, on which tax is paid. 

    And wife may be a non tax payer at the minute, but that's only for 2 years you said? I would expect an investment property to be bought for in effect life. 
  • JGB1955
    JGB1955 Posts: 4,009 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    How about you buying your son's share of the property, leaving the ex with the other 50% to mortgage?
    #2 Saving for Christmas 2024 - £1 a day challenge. £325 of £366
  • blindman
    blindman Posts: 5,699 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
     believe this would be a protected tenancy, so you could never evict. 
    Interesting
    Youre mistaken though. You cant offset costs against tax code. you still pay them. You deduct costs from your income, to give you a profit, on which tax is paid. 
    That's what I meant, I have rented before about 20 years ago!
    And wife may be a non tax payer at the minute, but that's only for 2 years you said? I would expect an investment property to be bought for in effect life. 
    Yes I understand it's just a point that at the outset there would be little or no tax to pay

  • blindman
    blindman Posts: 5,699 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    JGB1955 said:
    How about you buying your son's share of the property, leaving the ex with the other 50% to mortgage?
    Not sure what you mean.
    How does that work?
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    How big is the mortgage on this £180k house?
  • blindman
    blindman Posts: 5,699 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    How big is the mortgage on this £180k house?
    £114 K
  • Comms69
    Comms69 Posts: 14,229 Forumite
    10,000 Posts Third Anniversary Name Dropper
    blindman said:
     believe this would be a protected tenancy, so you could never evict. 
    Interesting
    Youre mistaken though. You cant offset costs against tax code. you still pay them. You deduct costs from your income, to give you a profit, on which tax is paid. 
    That's what I meant, I have rented before about 20 years ago!
    And wife may be a non tax payer at the minute, but that's only for 2 years you said? I would expect an investment property to be bought for in effect life. 
    Yes I understand it's just a point that at the outset there would be little or no tax to pay

    Ye just that the saving is basically 20% on your outlays, so between that and subsidised rent you need to look at the profit you'll be making. 
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