Hi,
whilst before you had no debt at all, now you will be paying out a net of around £35 per month. That is if you fully let the property. However, you do need to factor in rental agency fees, which could reduce your rental by about 15% (depending on what sort of management you do with the agency). If you do all the rental managing yourself, do factor in your advertisement costs and the costs of your time. Also, factor in council tax bills when the property is empty, getting safety certifications for gas and electrics (yearly and three yearly respectively). Having done all that, we now need to see whether the prices will stay steady or rise. At the moment, they are just steady (depending on the area you are in ofcourse). Five years down the line, they may or may not rise. I think the rise is not going to above inflation rate if any. I also think that properties you often think are worth more than you paid for are infact not so. They are just about right, and will be only be worth more than you think they are in a rising market. So, all in all, I dont think you have made the best possible decision, but neither an awful one. You have taken on a headache which may or may not be worthwhile in the end. However, you havent made a disastrous decision either (unless there is a long term crash in house prices). If you do lose on this one, it will only be about 10-15% of your investment at the moment by my rekoning. If all goes well though, you could end up getting around 30-40% return in 5 years.