Buying a tenanted property

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    Buying a tenanted property

    Hi I'm thinking about buying a tenanted property.Is there anything I should be weary of ? .This would be my 4th and would bring my total income to about 48000 minus mortgage interest etc.Im presuming the new tax rules would not affect me as I would still be in the basic tax bracket ?

    #2
    if there is a tenant in there - beware
    is there some reason why the property is being sold ? is this a bad tenant ect ?
    not sure if you would be in the basic tax bracket but check that out - in a basic tax and earn 9,000 pounds plus my rental income 4000 pounds minus repairs/mortgage and im basic

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      #3
      Originally posted by craig2222 View Post
      Hi I'm thinking about buying a tenanted property.Is there anything I should be wary of ?
      Yes.
      Most conveyancers don't know what they're doing when it comes to a tenanted property purchase.

      You need to be very sure when the tenancy began.
      You need to know that the tenancy agreement is one you are happy with.
      The deposit needs to be transferred.
      Any letting agent involved needs to be removed or incolved.
      There are notices you are required to give the tenant on completion.
      I would want to see regular rent payments.


      [/QUOTE]This would be my 4th and would bring my total income to about 48000 minus mortgage interest etc.Im presuming the new tax rules would not affect me as I would still be in the basic tax bracket ?[/QUOTE]You're getting close to the higher rate threshold and need to be sure that the new way of calculating rental income doesn't knock you over.

      The conventional calculation of income is rental income less allowable costs (including interest),
      The new way for landlords is rental income less allowable costs (excluding interest and other finance costs) which is used to calculate tax and then a new restriction is applied based on the interest and finance costs at the base rate of tax.

      Which can knock previously base rate tax payers into the higher rate - which doesn't matter too much for income tax, but matters significantly for CGT and any dividend income tax.

      So make sure the "about" figure is accurate.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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        #4
        You may have to pay the 3% Premium for a B2L mortgage.

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          #5
          Maybe time to look at buying through a company.

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            #6
            Originally posted by craig2222 View Post
            Hi I'm thinking about buying a tenanted property.Is there anything I should be weary of ? .This would be my 4th and would bring my total income to about 48000 minus mortgage interest etc.Im presuming the new tax rules would not affect me as I would still be in the basic tax bracket ?
            Yes, why is the property been sold with a tenant and not vacant possession, when did the tenant 1st move in ?
            Thunderbirds are go

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