First time landlord - DIY or set up property management company to collect rent?

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    First time landlord - DIY or set up property management company to collect rent?

    Brand new to this and just looking for any help at all. I have searched the site but would love it if anyone could look at my numbers and give me any tips/advice etc. Obviously I will be getting an accountant if I need one just working out whether we should rent flat out or sell it....

    1 bed flat

    Property mortgage: 450 pcm (interest only)
    Possible rental: £1300 pcm
    Service charges/ground rent: 110 pcm
    Insurances: 50 pcm

    1. Is it the 1300 rent which is taxed or the £690 after the mortgage?

    2. Myself and my husband are both 40% tax payers. Is it therefore more tax efficient to set up property management company and keep the money in the business account until the 2014-15 tax year when we will be 20% tax payers?

    #2
    Are there any things I am missing which could reduce the number before tax is paid? I've read about wear and tear money; decoration etc...

    Comment


      #3
      You are taxed on rental PROFIT (rent minus allowable expenses).

      A property management company is likely to shelter only the agent's commission - 15% of rents?

      If so, it may not be worthwhile at the moment.

      Comment


        #4
        Thank you King_Maker

        Comment

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