Moving abroad considerations

NoQuarter

Hi all

I'm thinking about getting a mortgage on an apartment this year. I'll be buying as a sole applicant and renting the spare room under the rent a room scheme.

One concern I have is that I am in a job that travels very well. To places that have low/no income tax (all sunny too!). Working abroad is something that has always been on my radar so I will probably do it in 2017.

My question is, if I buy this year and am living in the apt and renting the other room, when I do go to travel abroad, what do I need to take into account in respect of then renting out my room in the apartment?

Do I become a landlord? If so, I assume a tax liability then arises. Are there any other considerations? Do I have to appoint someone over here to maintain the property? Anything else?

Is it a good idea to get a mortgage only to work abroad for a couple of years in the early years of paying back the mortgage ~(even though my financial position abroad will be vastly greater than over here with the low income tax).

Thanks for your time.

Michael D Not Higgins

There are a number of sums you will have to do. Yes you will become a landlord with all the requisite obligations in law and tax issues. You will be obliged to repair the apartment so you will need someone to take care of it for you. There are a number of agencies that can do this work.

You would be wise to consult an accountant to ensure your tax liabilities are up to date and correct. Normally the tenant is supposed to retain 20% of the rent to pay to Revenue on your behalf. Also consider your mortgage will have to be switched from owner-occupier to BTL so you will incur a higher interest rate. Also be aware it could be difficult to remove a tenant when you are returning and wish to move back in.

All of these factors and more could influence you one way or the other and it won't be until you've sat down and gone through the figures will you reach a decision.

NoQuarter

Michael D Not Higgins wrote: »

There are a number of sums you will have to do. Yes you will become a landlord with all the requisite obligations in law and tax issues. You will be obliged to repair the apartment so you will need someone to take care of it for you. There are a number of agencies that can do this work.

You would be wise to consult an accountant to ensure your tax liabilities are up to date and correct. Normally the tenant is supposed to retain 20% of the rent to pay to Revenue on your behalf. Also consider your mortgage will have to be switched from owner-occupier to BTL so you will incur a higher interest rate. Also be aware it could be difficult to remove a tenant when you are returning and wish to move back in.

All of these factors and more could influence you one way or the other and it won't be until you've sat down and gone through the figures will you reach a decision.

That's very helpful, many thanks. As regards the first point, there is a management company that will maintain the premises so one less thing to worry about in principle.

Happy to hear other opinions.

Thanks

The_Morrigan

NoQuarter wrote: »

That's very helpful, many thanks. As regards the first point, there is a management company that will maintain the premises so one less thing to worry about in principle.

Happy to hear other opinions.

Thanks

Are you talking about the management company of an apartment complex?

Mrs OBumble

NoQuarter wrote: »

That's very helpful, many thanks. As regards the first point, there is a management company that will maintain the premises so one less thing to worry about in principle.

They will - or at least should - do the outside. But you will still have to take care of inside.

I would strongly recommend hiring a local property manager to look after the property for you. This will cost a bit - but their fees are tax-deductable, and if you get a good one they are worth their weight in gold for screening tenants and dealing with problems for you. And because the rent is paid to them, your tenant doesn't need to worry about the 20% deduction thing.

IMHO it's best to hire a company that specialises in managing residential rentals. Don't use an estate-agent who offers this service on the side, because they put most of their attention into the higher-profit sales work.

NoQuarter

The_Morrigan wrote: »

Are you talking about the management company of an apartment complex?

Yes.

Mrs OBumble wrote: »

They will - or at least should - do the outside. But you will still have to take care of inside.

I would strongly recommend hiring a local property manager to look after the property for you. This will cost a bit - but their fees are tax-deductable, and if you get a good one they are worth their weight in gold for screening tenants and dealing with problems for you. And because the rent is paid to them, your tenant doesn't need to worry about the 20% deduction thing.

IMHO it's best to hire a company that specialises in managing residential rentals. Don't use an estate-agent who offers this service on the side, because they put most of their attention into the higher-profit sales work.

Great advice, that's something I would certainly consider and I have never dealt with an apartment complex management company before so I wasn't aware of that. (As an aside - their fees are very high for that!!!).

Appreciate the advice so far.