Best use of 60k gift

[Sarenco]

Well, BTL mortgage rates are high because lenders got badly burned by high default levels in the recent past and hence the pricing.

You obviously don't have to pay an accountant to prepare your tax return if you are happy to take on the job yourself. But bear in mind that your own time costs are not deductible for tax purposes.

 

[galway_blow_in]

My advice to anybody that is considering getting into the residential letting business is to be very cautious with your financial projections.

In my experience, prospective landlords invariably underestimate the costs and taxes involved in the residential letting business. It is important to be realistic and to include a suitable provision for voids/over-holding periods.

The format on this thread may be helpful in running your own projections -

https://www.askaboutmoney.com/threads/keep-apartment-as-rental-or-move-tracker.203907/

FWIW, I take the view that the RPZ regime has artificially increased rents on new rentals - because sitting tenants have a huge incentive to stay put and this restricts turnover/supply. I don't expect this to continue indefinitely.

Personally, I can't see any value in a leveraged rental business at today's yields and BTL rates. Properly accounted for, the numbers just don't work.

i would not invest in a BTL unless i had more than half the cost and i would not be that keen with that kind of loan to book value tbh

 

[Ballymag]

God I love this site. Thanks people for that great breakdown of figures etc. You are right though - a rent of 1300-1400 would be more realistic and as it would likely be an apartment there would be an annual fee of 1000 (guesstimate). All that eats in to any likely profit. One other question - isn't there a way to offset some tax by maximising AVCs? As I mentioned I work part time so will be short on service for pension purposes. Could anyone give me an idea of how much could be offset etc. I know it probably won't make a huge difference but just want to consider all the figures before I abandon investment in property. Thanks.

 

[cremeegg]

God I love this site. Thanks people for that great breakdown of figures etc. You are right though - a rent of 1300-1400 would be more realistic and as it would likely be an apartment there would be an annual fee of 1000 (guesstimate). All that eats in to any likely profit. One other question - isn't there a way to offset some tax by maximising AVCs? As I mentioned I work part time so will be short on service for pension purposes. Could anyone give me an idea of how much could be offset etc. I know it probably won't make a huge difference but just want to consider all the figures before I abandon investment in property. Thanks.

You should probably start a new thread on the pensions forum for the AVC issue.