Here’s a situation that I imagine applies to many other people today. I have a city centre apartment, would love to trade up but cannot sell my current property in today’s market. I had always assumed, perhaps naively, that if necessary I could rent out my old place it would only require a small monthly subsidy. Doing my calculations, I am starting to realise that I may have been way off – can anybody tell me if I am missing something.
Projected rental income is 850.
Claimable expenses are 781, which means I pay tax of 28 on the remainder and end up with a monthly income of 818.
BUT
Current monthly payment is 925.
If I rent it out, I presume I lose my mortgage interest relief of 20pc – therefore the payment goes up to 1,080.
Management fees cost approx 140 per month.
I would probably need an agency to find tenants, which adds at least another 50 per month.
Maintenance could be anything, but let’s say 20 per month.
If the place is empty for just one month per year, that costs 69 per month.
Last but not least, second home tax is 16 per month and will certainly increase.
When you add all that up, I reckon it could cost me well over 500 per month to keep the place going – a hefty amount by most people’s standards. Given that my situation must be fairly typical, I cannot understand why anybody would want to become a landlord these days – the laws seem to be stacked against them.
As I mentioned earlier, I would love someone to tell me I’ve got something wrong or left something out. But what?
Projected rental income is 850.
Claimable expenses are 781, which means I pay tax of 28 on the remainder and end up with a monthly income of 818.
BUT
Current monthly payment is 925.
If I rent it out, I presume I lose my mortgage interest relief of 20pc – therefore the payment goes up to 1,080.
Management fees cost approx 140 per month.
I would probably need an agency to find tenants, which adds at least another 50 per month.
Maintenance could be anything, but let’s say 20 per month.
If the place is empty for just one month per year, that costs 69 per month.
Last but not least, second home tax is 16 per month and will certainly increase.
When you add all that up, I reckon it could cost me well over 500 per month to keep the place going – a hefty amount by most people’s standards. Given that my situation must be fairly typical, I cannot understand why anybody would want to become a landlord these days – the laws seem to be stacked against them.
As I mentioned earlier, I would love someone to tell me I’ve got something wrong or left something out. But what?
Last edited by a moderator: