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Did you get special incentives on your mortgage because you are renting out all or part of your property? (E.g. buy-to-let in the UK (London at least), where it

by kspaans 10y ago

Did you get special incentives on your mortgage because you are renting out all or part of your property? (E.g. buy-to-let in the UK (London at least), where it's easier to buy a house you plan to rent out than it is to buy a house to live in.) I agree your out-of-pocket costs are probably lower than renting. It sounds like you are saying everyone can and should become a landlord, but how much of a downpayment did you need to come up with for your house?

mancerayder 10y ago
I didn't get special incentives because I'm renting out my property, not in the sense you mentioned Buy to Let in the UK. Instead, I have a few additional tax breaks: instead of paying income tax on the rental income, I can offset it against the depreciation of the property (that will increase the spread between sale price and the price I paid, which will 'go down', so when I sell it I will report higher profit ); I can tax deduct the mortgage interest like any homeowner already can ; I can tax deduct house wide expenses such as heating and common utilities, including repairs to the rental unit (and even linens and furniture if I AirBnB it but that's a different tax schedule). I can declare loss when a unit is not rented. I used a special loan called an FHA loan which meant I needed less than 20% down payment, but I was punished with a high insurance from the bank. I recently refinanced out of that into a normal mortgage, because the value of my property went up and the 20% figure magically became true. And most of us here (unlike in the UK) have 30 year fixed-rate mortgages. If I rented out my units and moved out, I'd make 2K a month over and above my mortgage payment and taxes. I regard the negativity towards housing above with a lot of amusement. I could withstand a housing crash, a job loss, and a lot more now. I am much more worried about a fire, or crime in my neighborhood, or construction next door.

by kspaans 10y ago

mancerayder 10y ago

I didn't get special incentives because I'm renting out my property, not in the sense you mentioned Buy to Let in the UK. Instead, I have a few additional tax breaks: instead of paying income tax on the rental income, I can offset it against the depreciation of the property (that will increase the spread between sale price and the price I paid, which will 'go down', so when I sell it I will report higher profit ); I can tax deduct the mortgage interest like any homeowner already can ; I can tax deduct house wide expenses such as heating and common utilities, including repairs to the rental unit (and even linens and furniture if I AirBnB it but that's a different tax schedule). I can declare loss when a unit is not rented. I used a special loan called an FHA loan which meant I needed less than 20% down payment, but I was punished with a high insurance from the bank. I recently refinanced out of that into a normal mortgage, because the value of my property went up and the 20% figure magically became true. And most of us here (unlike in the UK) have 30 year fixed-rate mortgages. If I rented out my units and moved out, I'd make 2K a month over and above my mortgage payment and taxes. I regard the negativity towards housing above with a lot of amusement. I could withstand a housing crash, a job loss, and a lot more now. I am much more worried about a fire, or crime in my neighborhood, or construction next door.