I would be grateful for advice on buying a property to rent out - pitfalls etc.
Basically, the scenario is this: we may have to move down the property ladder for various reasons to not a brilliant area. To give us options of getting back into a nicer area later we were wondering about trying to buy either a flat to rent out or a holiday home. We don't need a mortgage for the smaller house but we don't think this is an area we want to stay in forever. However, having stepped off the property ladder it will be very expensive to get back on it in a nice area in 5-10 years. We therefore think it makes sense to take on a mortgage now when we are in what should be main earning years of our life and buy a second property which could be sold when we want to move to give us more capital.
Hope that makes sense but basically we are complete novices in this area and wonder if there are tax issues/letting agents to beware of/tenant issues to beware of before we go down this path. Also, what are your views on a holiday house v flat to rent out? Obviously, rented flat would bring in very helpful money and hopefully cover the mortgage. On the other hand, perhaps tenants are such hassle that it would be better to have a little flat/small cottage somewhere nice where we could escape to at weekends.
This is a bit hypothetical at the moment but any views?