Will this work? Buying a second house.

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We own a house in London but are going to move out of London for quite a specific reason and period of time (10 years). I'm afraid if we sell our house we will never be able to afford to move back in. It turns out the house is worth quite a bit more as a rental than I realised. It would pay its own small mortgage plus management fees etc with a good chunk left over. Could we remortgage our current house and take some equity out and use it as a down payment for a another house? The current house could easily service the increased mortgage. Is this mad? Could it work?

Letting property is no longer a game for amateurs! Do your research. start by joining something like the Landlord Zone forum (free) and join a landlord's society to get sound advice.

Also, assume the worst - voids are a certainty; difficult or unreasonable tenants are highly likely; unforeseen costs are almost guaranteed - there's no end to the unintentional damage that tenants can cause - and there are many regulations landlords have to comply with.

Thanks @ICouldBeSomebodyYouKnow. That's really useful. I'll join a landlord forum. I think we are going to give it a go renting it out for a year and see how we do.

We do have an accountant but DH deals with him as the company is his. The accountant is happy that even after tax we will clear about £500 a month. We will then put that aside for whatever it needs to be used for toward the upkeep of the house/unrented periods etc.

The hassle of being a landlord might be too much and if so we will sell it in a year but if it works out I'd be thrilled as it would mean keeping this house and being able to come back to it. The house in the catchment for an outstanding primary and secondary so imagine we will get renters looking to use the local schools.

Others have pointed out that this will leave us rather undiversified with too much money in real estate. And that's probably true but I'm not sure I'm ready to let go of this house.

You could hedge your bets further by renting a year in the new location before buying. Then if you do decide being a landlord is not for you there would be no need to pay 2nd property stamp and you would have a lot more flexibility in what you decide to buy in your new location.

I know people that have done this for various reasons. See an acct but I also very much suggest you do as the PP suggested and rent initially. Is there any real need to be on a rush to buy? Moving is a pain I know but seeing various friends in similar circs I would strongly consider it.

I have done similar, depending on the tenants, there maybe a small profit, but from experience, breaking even is a win, and it's certainly not free cash.

would that be the same accountant who advised the following:-

"We are 20% tax rate payers as we own a business so take most income as dividends."

Because I am telling you for free - with no possible charge or benefit to me - if this is your accountancy advice then you need to get a new accountant

I don't actually think you know what you're doing.

lots lots more from the landlord side - insurance for buildings, contents, rent guarantee, legal expenses, malicious damage, home emergency. epc, gas check, smoke alarms, right to rent , inventory , agent fee etc etc etc.