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Question on whether I should rent out my property

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feras14123
feras14123 Posts: 3 Newbie
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in House buying, renting & selling
we're thinking rather than selling our property we could rent it out instead, however as I was researching I was reviewing the tax bracket being 40%. I wasn't sure if it was worth it..

The current mortgage is under my wife and I and it's roughly £1000 a month if we were to rent it out we'd be getting £1300 a month.

My annual salary is £60k and hers at £17k, would we fall into the 40% tax bracket from the rental income or is that separated? 


Comments

  • born_again
    born_again Posts: 14,480 Forumite
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    Will your mortgage provider let you rent it out? As many will not on a std mortgage, or for just a short period.

    Also look at just what is involved in renting out. As it is not just as simple as many think.
    Life in the slow lane
  • feras14123
    feras14123 Posts: 3 Newbie
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    That's correct it would be a consent to let from the bank. born_again said:
    Will your mortgage provider let you rent it out? As many will not on a std mortgage, or for just a short period.

    Also look at just what is involved in renting out. As it is not just as simple as many think.

  • pramsay13
    pramsay13 Posts: 1,955 Forumite
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    If you haven't been a landlord before or currently I would say just sell it based on those figures. 
    £300 a month extra is not a lot when you have to figure in redecorating, repairs, insurance, gas and electric checks, fire safety etc. 
    If it doesn't rent immediately do you have a few thousand to service the mortgage for however long it takes to find someone? 
    What happens if they stop paying?

  • caprikid1
    caprikid1 Posts: 2,135 Forumite
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    "The current mortgage is under my wife and I and it's roughly £1000 a month if we were to rent it out we'd be getting £1300 a month."

    You need to remember that only the interest is tax deductible so if you have mortgage interest of £300 you could easily find yourself paying 40% tax on a £1000 or more that income.

    So without an interest only mortgage it would almost certainly be cash negative on those figures.
  • HouseMartin567
    HouseMartin567 Posts: 54 Forumite
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    With the information given it certainly doesn’t seem that the numbers would stack up. Additionally, assuming you are buying another property you would incur the extra 3% stamp duty on your new purchase.

    And that doesn’t even factor in the mental stress of being a landlord (been there, done that).
  • propertyrental
    propertyrental Posts: 2,551 Forumite
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    and if the renters reform bill becomes law......


  • feras14123
    feras14123 Posts: 3 Newbie
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    Thank you everyone here for providing some insight regarding this  :) . 
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