Growing up advice

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Growing up advice

Postby insideout » Sun Jul 13, 2014 10:16 am

Since I started working I've just bin banking a shit tonne on the side and building up a large pot of cash. It does nothing for me in the bank and not prepared to risk it in stocks/shares.

Speaking to a colleague he reckons I should buy a house this winter and rent it out but I'm not sure on the idea, I don't think I'll get stung too much because I get paid tax free from an offshore company. So pretty sure I won't get taxed on the incoming rent.

The questions I am stewing on are, do I really want to do this work for the rest of my life and one day would a big amount of cash be more valuable to me than a house in the Uk? I.e. To start a business.

Are uk mortgages a massive con at the moment?

I do like the idea of someone paying my mortgage for me and one day in 20 or so years having a house sat there paid for, but it's not the sort of topic I can talk about with lads my age as they have no experience in this area.

What does everyone else say?
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Re: Growing up advice

Postby Leedsol » Sun Jul 13, 2014 10:56 am

If you are ordinarily domiciled in the UK then you need to be declaring any income you get, even if from an offshore company, to the HMRC and pay at the appropriate rate be it dividend rate ir personal income tax. Rent you receive will be liable to UK income tax.

Don't fall into the trap of as it's not taxed at source I don't need to declare. I know of a few folk who lived large and big and had to pay back a lot as they entered their 60s involving loss of family home.

A two up/down terrace will always sell on so go for it. You won't lose out and will likely pay it off quickish.
You're too deep Camel..its Indo not Margaret River
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Re: Growing up advice

Postby insideout » Sun Jul 13, 2014 1:16 pm

Yeahh a couple of guys here pay a company £200 a year to sort their income properly!

Leedsol - Don't you have a property in Portugal or is that another forum member?
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Re: Growing up advice

Postby Leedsol » Sun Jul 13, 2014 1:51 pm

Aye got a little flat in the Algarve. Put the income on my tax return too!

no real profit but covers all my costs and maybe a couple of grand here or there plus all our weeks out there are feee ( will be 8 weeks this year)
You're too deep Camel..its Indo not Margaret River
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Re: Growing up advice

Postby Chris F » Mon Jul 14, 2014 9:03 am

Where do you live at the moment?

If you buy somewhere and then rent it out, but are renting yourself, then it's not a bright idea. Stealing from Peter to pay Paul, as the saying goes. Best use of your money is to but somewhere to live in yourself, and if you are away travelling at any point look to rent it out.

And as Leedsol says beware the taxman!
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Re: Growing up advice

Postby danny1 » Mon Jul 14, 2014 9:19 pm

And renting a place out is not as easy as your mates say it is. It can be a fuckin huge pain in the arse for a number of reasons. But prob safest bet LONG TERM. Do not buy anything off plan !
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Re: Growing up advice

Postby insideout » Tue Jul 15, 2014 8:24 am

When I'm back in the Uk I crash at the mothers, but it's looking like I'll be spending very little time in the Uk this year maybe a few weeks over Christmas. I thought buying a house in the Uk would be good idea for years down the line if I need to come back because of ill Health or something and work a regular job.

On the other hand I could buy a decent house in Portugal or the Canaries to go back to on time off, can't see why I would have to focus on just England and maybe rent out in between.... Not sure if the Uk will lend to buy abroad of if I'll have to raise the funds with a foreign lender?....
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Re: Growing up advice

Postby Philshoz » Tue Jul 15, 2014 10:31 am

insideout wrote:When I'm back in the Uk I crash at the mothers, but it's looking like I'll be spending very little time in the Uk this year maybe a few weeks over Christmas. I thought buying a house in the Uk would be good idea for years down the line if I need to come back because of ill Health or something and work a regular job.

On the other hand I could buy a decent house in Portugal or the Canaries to go back to on time off, can't see why I would have to focus on just England and maybe rent out in between.... Not sure if the Uk will lend to buy abroad of if I'll have to raise the funds with a foreign lender?....


That's a whole new can of worms, getting a foreign mortgage. Very very difficult. We had to show books for three years trading (which we didn't have) you can only borrow a much smaller percentage than the UK and the paperwork is horrendous.

It could just be possible to buy a property outright if you have good pot. There are empty houses near us for 60k euros. (£50k)

I would be tempted to go the Leedsol route and get an apartment, lock up and go, rent it through an agency, use it when you want, less chance of being burgled etc etc.
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Re: Growing up advice

Postby ATTMFKH » Tue Jul 15, 2014 11:15 am

Yeah - get one out in the Canaries and give discounts to your SeaWeed Brethern 8)
Are We Too Deep ...............
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Re: Growing up advice

Postby Philchapman » Tue Jul 15, 2014 1:11 pm

What are your electric bills like Phil?

'If you have good pot'. 8)

Is your other car a black BMW by any chance?
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Re: Growing up advice

Postby Philshoz » Tue Jul 15, 2014 2:25 pm

Philchapman wrote:What are your electric bills like Phil?


Pretty good actually. Averages 60€ every two months. I do the reading and enter it on-line. EDF check it twice a year so none of that direct debit crap paying out more than you need to.

Bottled gas for the cooker and oil fired heating that supplies the hot water (that's reasonable at the mo but last winter we got a bit carried away, being our first French house with central heating :oops: )
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Re: Growing up advice

Postby spewing » Wed Jul 16, 2014 12:55 pm

If your not a UK resident your rental agent has to deduct 30% and pay it direct to the inland revenue.
The agents fees and the cost of any repairs are not subject to the 30% but everything else is. Mortgage payments etc.

You can file a tax return and and may be able to reclaim the 30%

Assuming your not a UK resident I think your still allowed a £10,000 ish tax allowance before tax so on a single property you'll probably get it all back.i think the legislation is designed to hit foreign nationals with a large property portfolio rather than the little man.

I've got a coppy of the inland revenue guide for rental agents if your intrested but it's quite heavy reading.
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Re: Growing up advice

Postby Vince Noir » Thu Jul 17, 2014 10:05 am

spewing wrote:
I've got a coppy of the inland revenue guide for rental agents if your intrested but it's quite heavy reading.



did you mean to post this in the " getting to sleep" thread 8)
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Re: Growing up advice

Postby insideout » Sun Jul 20, 2014 12:28 pm

Thanks for the advice! Started looking abroad too, any reason why Portugal or Fuerteventura
Would be a bad idea? I'm fond of both places to be honest and seem to be able to get more for your money out there. Plus working down in the Med it makes no sense to fly back to England to surf!
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Re: Growing up advice

Postby spewing » Sun Jul 20, 2014 12:59 pm

insideout wrote: any reason why Portugal or Fuerteventura
Would be a bad idea? I'm fond of both places to be honest and seem to be able to get more for your money out there


Personally I wouldn't look on a house as an investment but far more somewhere to live. I wouldn't buy a house I didn't want to live in.

But if you are relying on the rental income as I understand it the Canaries and Portugal are prety saturated with good quality holiday type accommodation and rental returns arn't that great.

But from what I've seen in Portugal if you were to live inland a bit you could get a hell of a place for far less than the UK and if you don't need the rental income to pay for it even better.
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Re: Growing up advice

Postby insideout » Tue Jul 22, 2014 6:10 am

Okay thanks for the insight Spewing, would be nice to let out to friends and close friends of friends especially if in a good location to surf! Think it comes down to who you can trust mainly. I preferably would like to buy outright then I'd be in a better position to haggle I think, see what winter brings!
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