Landlord costings

[Angrygirl]

I am looking for a bit of advice

I have a property that i currently live in, myself and my partner are discussing living in his house and me renting out mine.

I have had a look on the revenue website to try and get information but I seem to be confusing myself

For Example:
A five year arrangement with the bank is costing: €300 per month
Rent obtainable will be €400
I will be paying €860 management fees and registering the property with the PRTB and making sure I have landlord insurance.

Can anyone help with the kind of fee's i would have to pay the revenue or how i would work this out myself (i'm looking for a simple way of understanding it please)

Thanks in advance

 

[cremeegg]

You will have to pay income tax on the profit you make if you rent out your house.

The profit is calculated as rental income less allowable expenses.

In general all the costs you incur for the property, insurance, repairs etc. are allowable expenses.

There is one significant exception

Interest on any mortgage you may have taken out to buy the property. Only 75% of the interest cost is allowed as an expense. The capital elements of the mortgage are not allowed as an expense.

 

[facetious]

There is also PRSI and your mortgage provider is likely to change your mortgage to a buy-to-let mortgage which will probably be several percent higher than your present mortgage rate.

Furthermore, most mortgage agreements prohibit the renting out of your home without their written consent and the absence of such permission may affect your lease agreement (leasing a property which you are not entitled to do).

 

[oldnick]

Angrygirl - you say you have a 5 year arrangement with the bank. What does that mean ?Is the 300 per month purely interest/ part-payment,what?

If this arrangement means that the capital amount owed remains the same after five years then it may not be worth letting the property. There's not just the financial aspect but the stress of letting-and the risk of damage, bad tenants who don't pay etc etc.

It's impossible to advise without knowing what the payments to the bank are -interest or what. And also whether this property is in negative equity. And whether you are earning an income (which determines rate of tax on your rental income).