2007-02-23 08:47:15 · 6 answers · asked by michael k 1 in Business & Finance ➔ Taxes ➔ United Kingdom
First, take a look at the interest rate you are paying on that house. Say it is 6%. If, based on your research, you think that your own business can make more than 6% return on capital a year, then it would look more appealing to go for the business. Another thing to consider is taxes. If you're selling that house at a gain and haven't lived in it for an IRS stated length of time, you will have to pay taxes on that gain as well.
You say rent with a $500 profit a month. If you don't normally rent houses, this can get tricky. Did you consider the amount it would cost for attorney's fees to draft a lease agreement? What about maintenance on the property? What if they don't pay? Advertising to get someone to live there? There are alot of other expenses you may not have thought about or weighed.
It's ultimately, obviously, up to you. If you have never been a landlord before, I would caution you to do your research into the expenses and what it takes. Good luck with whatever you decide.
2007-02-23 08:56:20 · answer #1 · answered by jkersman01 3 · 0⤊ 0⤋
Depends. Collecting $500 a month in rent is an excellent way of generating wealth in the form of unearned income. On the other hand, have little to no debt at the start-up of a new business is good sign the business with last. If you expect to see consistent profits in the business once it's up and running, then the difference between the two decisions will only come down to how much one will bring in over the other. It comes down to your long term goals. If your thinking about simply creating wealth, I'd say rent your old place and invest the new income. If your planning to be more entrepreneurial, focus on the business start up costs and figure out how much you will need and how much you can expect to get from the market value of your home.
2007-02-23 08:55:42 · answer #2 · answered by TooMuch 4 · 0⤊ 0⤋
The second house as an investment SHOULD appreciate and help support you in retirement. You would also be getting cash income - renting is a business - so how much will your proposed business produce? Business income gives you the ability to add to your assets not just make a living - you can do that and let someone else have the day to day headaches. So it depends what you want in life.
2007-02-23 08:58:06 · answer #3 · answered by justwondering 6 · 0⤊ 0⤋
A. I own 2 properties one among which I stay in the different I hire. it rather is around the corner so if it desires maintenance i don't have a suggestions on the thank you to flow to do it. in case you may get out from below the different residing house and make a income that's what i might do. Renting sources is a crap shoot. You get solid renters this time and a bunch of morons the subsequent that do extra injury then they pay hire while they determine to pay it and attempting to evict somebody is worse then pulling tooth and takes months to do legally. flow with the chook interior the hand and are not getting into the slum lord employer. they're going to call you all hours of the day and night while issues wreck and in case you hire a administration enterprise there is going your income and you nevertheless have Taxes and assurance. And in the event that they do no longer mow the backyard guess who gets mailed the quotation. You!! solid luck!!
2016-11-25 19:38:56 · answer #4 · answered by ? 4 · 0⤊ 0⤋
If you can rent out your second property with a $500.00 monthly profit, why not use some of that profit to pay off your current mortgage sooner?
2007-02-23 09:01:46 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Smart people stay out of debt and own their home instead of renting.
2007-02-23 08:55:43 · answer #6 · answered by banananose_89117 7 · 0⤊ 1⤋