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  • FIRST POST
    • PaulSMallinson
    • By PaulSMallinson 1st Jun 17, 4:42 AM
    • 7Posts
    • 1Thanks
    PaulSMallinson
    Looking to get into Buy to Let
    • #1
    • 1st Jun 17, 4:42 AM
    Looking to get into Buy to Let 1st Jun 17 at 4:42 AM
    Hi,

    I am looking to set up my first buy to let property in the not to distant future and cant seem to find advice that I am looking for elsewhere on the net, so thought I would register on here and see if you folks can offer some advice.

    I have a company share scheme and have so many shares now available to sell, enough for a reasonable deposit on a small house.

    Currently my wife and I jointly own our house (mortgaged), I work and I am in the 40% tax bracket. My wife currently isn't employed, she is bringing up our children.

    I am hoping that we will be able to:

    Buy a small house/flat to rent out on a repayment Mortgage (rather than a Buy to Let interest only Mortgage)

    Set up a new bank account that the mortgage payments will come out of, along with any other costs (insurance etc) and that the rent goes into. Any profits would build up in the account, to cover any unforeseen maintenance costs, and hopefully ultimately put towards another property in the future to rent out.

    The profits would hopefully be in my wife's name to take advantage of her currently unused tax code, and thus go un-taxed.

    Is it possible to proceed as I have described?

    What would our first steps be? Other than, securing a mortgage, setting up a bank account, finding a property.

    I would probably look to use a letting agent to market, help find a tenant, and draw up a contract, but after that, to maximise income I would rather take care of things between my wife and myself. I have done my sums, and I am confident that I can buy a property, let it, pay the mortgage and still have approx £100-200 left over a month in profit.

    Thanks in advance for any advice and guidance.

    Paul
Page 2
    • Crashy Time
    • By Crashy Time 4th Jun 17, 3:59 PM
    • 5,229 Posts
    • 2,208 Thanks
    Crashy Time
    https://abodeltd.co.uk/section-24/
    • Crashy Time
    • By Crashy Time 6th Jun 17, 1:00 PM
    • 5,229 Posts
    • 2,208 Thanks
    Crashy Time
    https://www.theguardian.com/money/2017/jun/06/uk-rents-fall-london-brexit#comment-99808485
    • nubbins
    • By nubbins 13th Jun 17, 2:32 PM
    • 691 Posts
    • 929 Thanks
    nubbins
    You could jointly buy the property with your wife and own it as tenants in common with a 99:1 split.
    Originally posted by Pixie5740
    I was going to say this or a declaration of trust...

    https://www.property118.com/declaration-trust-mortgage-buy-let/86023/
    • LadyL2013
    • By LadyL2013 13th Jun 17, 2:53 PM
    • 153 Posts
    • 106 Thanks
    LadyL2013
    Are you aware that you will have to pay extra stamp duty?

    Are you willing to self manage the property? Giving an agent 10% of your income seems stupid to me.

    Do you both have adequate pensions, investments and 6 months expenses in cash savings? Ideally property should be less than 25% of your net wealth.

    Are you aware of the huge amounts of rules and regulations you must follow while being a landlord? For instance getting the deposit protected can result in a 3x penalty for doing something as simple as forgetting to print some documents and resend them when a tenancy is renewed despite the deposit being protected.

    Personally I think the learning curve of all this regulation is too much a risk now there can only be more regulation and tax on the way.

    You can also see that confidence in the housing market has slowed with transactions low, it seems house prices will stagnate or maybe reduce over the next 5 years.

    Have you worked out the yields on potential investments?
    Originally posted by tom9980


    Also consider that A LOT of people will not look to kindly on competing with FTB for precious small properties/first homes that you don't intend to live in. I have seen people get a lot of stick for this, so aside from financial it's also important to consider the way you may be viewed morally.
    • caronoel
    • By caronoel 13th Jun 17, 6:07 PM
    • 774 Posts
    • 983 Thanks
    caronoel
    Please note the wise old owls over on HPC are now happily trolling on this thread:
    http://www.housepricecrash.co.uk/forum/index.php?/topic/230297-another-poor-soul-on-mse/#comment-1103247418
    • Crashy Time
    • By Crashy Time 13th Jun 17, 8:23 PM
    • 5,229 Posts
    • 2,208 Thanks
    Crashy Time
    Please note the wise old owls over on HPC are now happily trolling on this thread:
    http://www.housepricecrash.co.uk/forum/index.php?/topic/230297-another-poor-soul-on-mse/#comment-1103247418
    Originally posted by caronoel

    Were all their posts removed?
    • Mrs Optimist
    • By Mrs Optimist 14th Jun 17, 7:22 AM
    • 1,084 Posts
    • 1,258 Thanks
    Mrs Optimist
    We have a dilemma in that we have inherited a house that is mortgage free. Trying to decide whether to release some equity from that house to pay off our existing mortgage and the rental income will cover the mortgage payment on the other house, we will no longer have a mortgage on our family home.

    Or

    Just sell the inherited house, pay off our morgage and be done with it.

    What would you do ?
    • Pixie5740
    • By Pixie5740 14th Jun 17, 7:43 AM
    • 11,104 Posts
    • 15,384 Thanks
    Pixie5740

    What would you do ?
    Originally posted by Mrs Optimist
    I'd read the other threads started by landlord wannabes and do the maths.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • AnotherJoe
    • By AnotherJoe 14th Jun 17, 8:43 AM
    • 7,591 Posts
    • 8,191 Thanks
    AnotherJoe
    We have a dilemma in that we have inherited a house that is mortgage free. Trying to decide whether to release some equity from that house to pay off our existing mortgage and the rental income will cover the mortgage payment on the other house, we will no longer have a mortgage on our family home.

    Or

    Just sell the inherited house, pay off our morgage and be done with it.

    What would you do ?
    Originally posted by Mrs Optimist
    If you owned your own home outright now, would you consider remortgaging it to the amount you currently owe, buying a property to let out and become a landlord? If not, then that should answer your question.

    The other related point to consider is, if you were to become a landlord, would this be the house you'd buy to let out on account of it's good rental potential and low maintenance needs ? Again, the answer to that should guide you.

    FWIW I can say what id do, which would be pay my mortgage off and put more money (at least some of what you were putting into your mortgage) into pensions, since I suspect you are like most people, underfunding their pension.
    • Crashy Time
    • By Crashy Time 14th Jun 17, 12:24 PM
    • 5,229 Posts
    • 2,208 Thanks
    Crashy Time
    We have a dilemma in that we have inherited a house that is mortgage free. Trying to decide whether to release some equity from that house to pay off our existing mortgage and the rental income will cover the mortgage payment on the other house, we will no longer have a mortgage on our family home.

    Or

    Just sell the inherited house, pay off our morgage and be done with it.

    What would you do ?
    Originally posted by Mrs Optimist

    Selling it may be easier than the drama of being a landlord, but you will need to find a buyer first......quicker you make a decision the better IMO, before we move into leadership contest/EU dummy spit mode etc.
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