I am looking at buying rental property with a view to generating monthly income and hopefully some long term capital gains. I expect to hold the property well into the future. I have a property management and maintenance background but am unsure of the best way to finance a purchase. Having viewed several properties we have narrowed it down to a house selling for E100,000. The monthly rental income should be about E600. Having read the boards it seems that interest only mortgages are recommended. We own our home which is worth about E350k and has a mortgage of E75k. We have substantial other savings from a recent property sale but would rather invest our own money in equities and use the banks for the property. In theory we could buy outright with no mortgage and receive about 7% annual return but from a tax point of view this makes little sense even though the rate of return is good. Our income is relatively low at 35k a year but the whole deal should be self financing and allow us to go on and buy a similar second property when it is complete. any ideas/advise on the best way to finance would be much appreciated.