Renting out house to rent other. Tax creds Q.

[inmyshoos]

Dont want to drip feed so sorry if this turns into an essay...

Moved to remote area 8 years ago for dhs job. 2 years down the line he was paid off and it was extremely stressful for a while. He found a couple of temp jobs but not really in his field. We have 3 young kids who were very young then (now all at primary school) So then dh managed to land a job in his field but not full time hours and also in a diff area. He covers a large geographical area but his base is 2.5 hrs from here and so he works 'away'.
We are very remote and little job opportunity for me here at the moment that let alone that would fit around school hours. Our school has less than 30 kids total to give an idea of how remote we are.
If we moved nearer the city perhaps i could find a bit of work whilst dc at school. Dont really want to leave this area as high school very good here but perhaps while dc primary age we could rent nearer city.
When they are upper primary/secondary i imagine they will be able to manage after school id think so would want to be back in present house and could travel to city for work. I was looking at houses to rent near the city. They all cost around 850 per month.
If we rented our house out would the rent be seen as income for tax credit purposes? So currently we have mortgage 450. If we rent house out for 800 and rent somewhere for 850 approx will this affect tax credits. I would hope to find work but have been sahm since dd1 born 8 years ago and so doubt i will be the most employable and so i dont want to jump from frying pan into fire. We barely scrape past at present which is why i am looking to move.

Does this make sense? Will the rent we get for our house be classed as income even though we will be paying out more for rent?
Wine if you got to the end!!

Yes, apart from the part of the mortgage that is interest, and allowable expenses, of course it's classed as income, because it is.

Looks like there isnt much hope of getting out of this rut then.

I know the world and his wife manage to peddle all sorts of shite but have you got any crafts you're actually good at?

I am good at diy!! What sort of crafts were you meaning? Where we live is so remote most things have been done. We have avon rep, pottery painting, cake maker, childrens party entertainer, card makers, dog walkers....
I have done the odd diy jobs for my friend and her mother (both older and live alone) but dont feel i have the confidence to advertise myself as a 'handy(wo)man'.

Right. Good start. Is there anything you can make with those skills?

Your problem appears to be that you live in a remote, jobless zone. The only thing going for the area you live is the school. There has to be more than one good school near the city and those that aren't good should be improving. Move where the jobs are rather than staying poor for the sake of a school?

I agree. It will be very hard to rent out a place that remote. It isn't going to be easy to sell it, so better get started.

Actually it is quite the opposite in terms of renting out here. Two friends who put house on market had people approach them to see if they would rent to them. Also currently in post office there are 2 notices people looking for 3/4 bed house in this area. Renting it out wont be a problem. My getting a job might however.

If there's demand for accommodation you could sell up, clear any debts & move to be nearer your DHs job so that you have more time together as a family and increase your job prospects at the same time. What are property prices and rental prices like where he works?

live and learn! But unfortunately it seems that doesn't help you. Would it sell?

Live and learn, i'm not sure what you mean by that special.
House would sell but not sure we want to sell it. Great house. Lovely spot. Got a lot going for it and have lots of memories here. Dc have never really known another house. It really feels like home. Also as we have septic tank/private water supply our council tax is very cheap and so makes getting by more manageable.
I have looked into re training in the field i worked in pre dc but have to find money to do this which is why i had thought about moving by renting for a year or 2.

I've heard you. Have you thought about childminding, babysitting?

Actually was just saying to dh tonight that i might put an ad up in post office offering babysitting on weekend evenings.
Childminding i have considered but there are quite a few and they are quite clichey. I also think i might feel even more isolatet not having other adults to speak to. This is another reason im keen to get a job. Im bored and lonely and feel like im on the verge of depression. I have had years of being a sahm and now i feel like i need my own identity back. Dh enjoys his job which relates to his degree. I almost feel my degree was a complete waste of 4 years of my life.

Will the rent we get for our house be classed as income even though we will be paying out more for rent?

Only the net profit. So all expenses can be deducted - mortgage, insurance, routine maintenance, fees, repairs, decor replacement, furniture, inventory services etc, as well as incidental expenses like phone calls to agent/tenants, mileage to and from the property and agent, stamps for postage, print cartridges for letters etc.
I know several people who rent out a single house and not one (including myself at one point) made a net profit. They covered their costs, but no more. The mortgage interest payments are likely to be higher if you're renting it out, your insurance will definitely go up, the maintenance and fees are significant - so it's easy for costs associated with renting to rise and eat Into any profit.

There are guidelines and templates online of accounts for rental properties, but unless you are mortgage-free or own a number of houses, in my experience, it's not profit making.

Isolated

Thanks wakey very interested and informative post. I am not interested in profit making just want to be able to rent somewhere else but have the security of ctc if i am unable to gain employment.