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I’m not after profit
It's strong yield* and capital appreciation** you want - two things that are hard to achieve if you are BTLing in London now.
Do you have an accountant? Who is doing your tax return?
* i.e. the profit from your cash outlay expressed in % - example you paid £100,000 for a property, cash £25,000, mortgage £75,000. You get £500 a month rent, and the mortgage costs £100 per month. There are no other costs. That leaves you with £4,800 a year which is a cracking yield before tax of around %20 (£4,800 is roughly %20 of £25,000).
** rising house prices
Howard-
Argh. I don’t have an accountant yet, early days, and debating if it’s wise.
I don’t even understand what the first * means.
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Right, think I get it...
So if I were to have a £100 a month mortgage, get £200 a month rent I'd have about £60 profit assuming I'd be in the highest tax band?
(£200 - £100) -40% = £60
I'm prob missing lots of finer details, but that sounds manageable, with the profit going into over payment.
Is that anywhere near right?
chrisbmx116
It’s all pretty over my head to be honest. I think I need to meet with some sort of independent advisor. I’m not after profit, just mortgage covered, and yeah higher tax bracket before any rent so prob stitch up?