Just done a quick calculation regarding the new tax rules on mortgage interest. Oh ****. Think that clears things up for me! Interest is approx £350 a month. Rental income is £500pcm. I’d have to pay out an additional £1500 a year to cover the interest.

I’m oot…

I’m pretty sure you’ve got your sums wrong. On a rental income of £670 and mortgage interest ~£290 by 2020/2021 (or whenever it is), I’ll only be paying an extra £100/yr in tax according to the on-line calculators.

My experiences haven’t been quite as bad as hels’ but I sacked off the agents a few years ago.

Agents normally charge 1 month’s rent (+VAT) to find a tenant on an introduction-only basis. Or I can put a free ad on Gumtree, answer a few phone calls & emails, and book viewings for one evening during the week. A few hours of my time, but I save ~£1k each time. I also get to vet the tenants personally.

Alternatively, they’ll charge 10% (+VAT, again, so that’s actually 12% because you won’t be VAT registered) per month to manage it. But their “management” when it comes to repairs extends as far as phoning a tradesperson for you and sending you the bill. That 12%, *every* month, didn’t feel like good value for the maybe once a year they had to make a phone call. Especially as they probably get a kickback from the tradesperson for being on their list of suppliers.

The agent’s fee is money for old rope. Much better to do it yourself if you can.

How much is left on the mortgage? This is important as if you do have some capital it may be able to earn you more money elsewhere – by reducing your mortgage at least. Also, are house prices in your area likely to change over the coming years? Maybe they’ll stay still or even fall. Keeping the house was probably a mistake IMO us the yield doesn’t sound great from what I gather.

Not selling for the sole reason of not wanting to take the £10k loss is a mistake – mature investors don’t look at it that way.

Alternatively, they’ll charge 10% (+VAT, again, so that’s actually 12% because you won’t be VAT registered) per month to manage it. But their “management” when it comes to repairs extends as far as phoning a tradesperson for you and sending you the bill. That 12%, *every* month, didn’t feel like good value for the maybe once a year they had to make a phone call. Especially as they probably get a kickback from the tradesperson for being on their list of suppliers.

Agents also do quarterly inspections, chase late payments, do tenant check in/check out including inventory, sort out the deposit, do credit checks, obtain references, etc. One of my properties is 200 miles from home, there’s no way I would ever manage that without an agent. Another property is closer to home and for a couple of years I managed it myself and just used an agents tenant finding service. But I had a dream tenant, always paid on time, sorted out any small issues himself, the integrated fridge/freezer broke down, I ordered a new one and he fitted it. But using an agent is just hassle free.

You are best getting an agent to do tenant find only and managing yourself, it, appoint local people.

I live in Spain and manage mine myself, my local chap can do the easy stuff – he does inspections at 60 quid a time, best thing is that whilst there he can do proper checks of hidden leaks (like removing bath panel) and do odd jobs.

So 2 x 6 monthly inspections = 120 gbp, plus my tenant intro fee at 6% plus vat, plus say 1000gbp of improvements, my costs are at worst 10%.

Tenants tend to stay on avg 3 years, so the real numbers are better.

Read up on land Lord zone.com, some really good tips on there.

How much is left on the mortgage?

Ok. I’ll bare everything – maths was never my strong point!

House bought 2007 at £110k. Deposit of £11k. Currently attempting to sell at £95k. Mortgage is £88.5K. Rent is £500pcm, mortgage is £460pcm, mortgage interest is approx £340pcm. Insurance costs £35 a month.

?

How easy is it to rent out? Yield isn’t too bad really and capital left is low so I think it could be worth keeping – but keep it rented out!

Oh – what’s the mortgage interest rate and how long left to pay off?

Oh – what’s the mortgage interest rate and how long left to pay off?

Not sure on int rate at the moment – dont have it to hand, but its on standard variable – tracks something like 1% over the base rate. 31 years to pay

Hmm not sure that’s right as doesn’t match up with the payment levels I think.

My mortgage calculator:

https://docs.google.com/spreadsheets/d/1cLH5NU8s4ghbiB7wlc_a1obAcjXdY59TZuW5jhStqjc/edit?usp=sharing

That’s a 6% yield so Deffo a keeper in my books. You would be lucky to get 4% in the London area, and that would be a flat with service charges.

Where are houses selling at pre 2007 levels?

Based on what you’ve said above your interest rate is ~4.5%-4.75% which isnt surprising based on your LTV.

And you’re only going to pay £1500 off the capital over the next 12 months.

Unless you have the cash to significantly increase the capital and to get on a better rate, any tinkering with Tenants/manageing it yourself is just pointless.

At best you make £2k this year, but this could easily be wiped out by any maintenance/further house price reductions

I’ve been a landlord for 20 years and on the whole I’ve had very few issues with tenants, …., another died in one property and wasn’t found for a few days ….

What a complete sh*t. Tenants really are scumbag aren’t they. Makes you wonder why anyone bothers.

I’d say keep it. Get agency to find tenants, manage money, you manage trades so agency doesn’t charge you for this. In the long run you’ll make money. It may be a bit of hassle but so is any investment.

Don’t some agents do a guaranteed income deal?
May not be the best rate but overall could be a good offer v’s stress

TheDTs – Member
Don’t some agents do a guaranteed income deal?
May not be the best rate but overall could be a good offer v’s stress

Like Northwood mentioned several times 🙄
Legally binding contract, they are the tenant, etc.
You get money in the bank with no surprise bills.

How much equity does it hold. And where is it ?

TheDTs – Member
Don’t some agents do a guaranteed income deal?
May not be the best rate but overall could be a good offer v’s stress

Yes we have one.

What a complete sh*t. Tenants really are scumbag aren’t they. Makes you wonder why anyone bothers.

I know, very rude. However his deposit covered my costs – you can’t just get out of a tenancy agreement by dying.