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Should we buy to rent?

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buzu
buzu Posts: 3 Newbie
in House buying, renting & selling
Hi All,

We bought our house 3 years ago for £160K. It's currently valued at around £240K.

We are thinking of moving for school catchment areas purposes.

We are wondering how much it would cost us to switch the loan to Buy to rent loan and if they the rent would cover the load + other expenses.

We have £130K left on our loan.

Any ideas what the Loan repayments (or % for that matter) would be like?

Any insight would be greatly appreciated

Comments

  • kingstreet
    kingstreet Posts: 39,253 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    It's practically impossible to answer this.

    The term, interest rate, choice of interest-only or capital & interest, the lender's rental income cover calculation will all have a bearing.

    If you really, really, really, really want to be a landlord get an assessment of the rental income possibilities from an ARLA registered letting agent and make an appointment with a decent independent mortgage broker.

    Will this be a let to buy? Will you want to buy another residence? If so, where is the deposit coming from? What about the extra 3% stamp duty on the purchase?

    A lot to think about and there are landlord tax changes currently underway which will make such a plan less tax efficient.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Cakeguts
    Cakeguts Posts: 7,627 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    When letting a property you have to consider if you would be able to continue to pay the mortgage for several months if the tenant stopped paying the rent. If you get a tenant who stops paying the rent it can take several months to evict them. You also have to be able to afford to pay for repairs if you are not getting any rent.

    So work out if you can afford to pay the mortgage and repairs for at least 6 months without getting any rent. If you can't do this then you would be risking your house if you let it.

    I am a landlord and some tenants don't tell the whole truth when they apply to rent a property.
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