Buying a house to let

[sammd]

Assuming the rent covers the mortgage repayments this is a great way to get on the housing ladder, but what are the risks? And what taxes do you have to pay - tax on the rent income and tax on the profit when you sell the house?

[Dollie]

sorry sammd - don't know about taxes etc. but what I do know is that my friend has just done this - he bought two apartments in a new flat complex. This was great apart from the fact that he only managed to let one of them out straight away and it was five months before he managed to let the other (at considerably less rent than he wanted.) During this time he still had to pay the mortgage. So just beware - don't be totally reliant on the income if you can help it - you may have weeks or months when you have to find the money yourself. Having said that - I agree with you, it is a brilliant way forward to owning a property - I hope it goes really well for you.

[spacechimp]

capital gains tax, I should think. I also believe the rules on this changed recently, but I'm a rather clueless person.

[Postdog]

Plus if you are letting, remember you are responsible for the upkeep and repairs.

[Oneeyedvic]

You will pay income tax on the rental profit (at 10%, 22% or 40% depending on your income) - this is only on the profit though which you probably won't make much of. ;-)

When you seel the property you will pay capital gains tax at 20% less personal allowance of �8500.

[sammd]

Thanks!

[Kathyan]

I would also advise getting a letting agent and taking out insurance in case the tenants refuse to leave when you ask them to, or to cover rent if they leave without paying. We let our house for four years and went through a local letting agent. They vetted the tenants and looked after the property, collected rent and oversaw all repairs etc. Well worth the money.

[CT]

Where are you going to ive in the mean time by the way. Do you have somewhere to stay or will you have to rent somewhere else?