How do I get the best return on my property?
Scenario: I rent a terraced property, may consider selling in future, currently I overpay on mortgage to reduce the amount owed.
Point 1;
I was told that having a mortgage on a property wasn’t actually a bad thing as I would save on capital gains tax as the mortgage would have to be paid off first before capital gains was charged.
On this first point, would I be right to think that you can reduce the amount of capital gains tax charged if an outstanding loan (mortgage) was still outstanding?
Point 2;
I am looking for any hints or tips to help manage my investment better for maximum return.
Currently I pay over the normal mortgage repayment to reduce my mortgage a lot quicker (no fees for over-payments), but I don’t know if in the long run I am penalising myself by doing this. The interest repayment on this property is only actually £75 per month as there is only 14k left to pay.
I do not pay any tax on the property as it is still minus £12,000 due to refurbishment so this will have to run down and move into the green before I pay tax.
My question is, would you advise me to stop overpaying the mortgage and just pay what is required therefore I will reap more of the benefit of having a rental property?
Cheers
Andy
Comments
Have Your Say
Every day, landlords who want to influence policy and share real-world experience add their voice here. Your perspective helps keep the debate balanced.
Not a member yet? Join In Seconds
Login with
Previous Article
How do you set your rent - research for seminarNext Article
VIRGIN property investor needs advice
Comments: 297 - Articles: 1
3:02 PM, 25th November 2013, About 12 years ago
http://www.hmrc.gov.uk/manuals/pimmanual/pim2020.htm about halfway down says “The underlying principle is that the cost of buying a property in good condition is clearly capital expenditure. Hence the cost of buying a dilapidated property and putting it in good order is also capital expenditure. ”
So it seems to me that when the refurb was done is important – was it a running repair or was it done shortly after acquisition and before the property could be let?
Member Since July 2013 - Comments: 15
4:26 PM, 25th November 2013, About 12 years ago
Well it was bought on a first time buyer scheme and wasn’t rented for 6 months but my circumstances changed and I had to rent it. So it was repairs made to Let the property about 6 months after aquitision
Member Since January 2011 - Comments: 12207 - Articles: 1403
4:31 PM, 25th November 2013, About 12 years ago
Reply to the comment left by “Andy ” at “25/11/2013 – 16:26“:
Presumably you obtained Consent to Let from your mortgage lender Andy?
.
Member Since July 2013 - Comments: 15
6:34 PM, 25th November 2013, About 12 years ago
Yes of course plus I purchased a landlords insurance with building cover etc. protected deposit and put inplace an assured Shorthold tenancy in.
the hmrc wrote to me over a year ago but when I wrote back they never responded but when i called they advised me they had received my reply and they will get someone to look at this.
I’m going to give them a ring tomorrow and chase it up with them because I haven’t had a final response.. I just want to make sure I’m doing the right thing…
Has anyone ever managed there own accounts?
Member Since August 2013 - Comments: 126
6:49 PM, 25th November 2013, About 12 years ago
Out of curiosity. How did you obtain a residential mortgage on an uninhabitable property?