Advice on whether to buy to let

CarolT_3

We have no mortgage on our own house and some savings, so with the addition of a small mortgage we are thinking of buying a house to let out (Peak District). A couple of friends have warned us not to do this at moment - we thought it would be an ideal time. We don't plan on selling for at least 6+ years. Advice?

97trophy

IMO, unless you are willing to be a LL for at least 10y+ don't bother - due to all the initial costs.

Robert_Sterling_3

Topov wrote: »

the buy to let market is dead right now so it probably isnt the right time to buy. I would wait for prices to fall further and for the credit crunch to end before doing anything connect to btl

Supply and demand tells me that it could be a good time to buy.
On the other hand tomorrow it may be a better time to buy.
Why not stay out of BTL and give home seekers a better chance at a better price.

poppysarah

Supply and demand? Go and look for the to let signs. Look on rightmove renting bit around your area.

mlz1413

OP is the peak district your home area? BTL's are better nearer to home,unless you know all the trades people in the area of the house and have really good agents.

Are you doing this to make money on the house ultimately or to take a monthly income from? Both have pitfalls, CGT if the prices rise and yearly tax returns and payments to the taxman on all your profits, unless you don't work and can use the annual tax allowance on this income.

Do you intend to be involved with all the tenants, payments, repairs etc?

With no interest being paid on savings a BTL could be another income option, but it has its own pitfalls so do your sums carefully before entering into this business.

moneysavinmonkey

CarolT wrote: »

We have no mortgage on our own house and some savings, so with the addition of a small mortgage we are thinking of buying a house to let out (Peak District). A couple of friends have warned us not to do this at moment - we thought it would be an ideal time. We don't plan on selling for at least 6+ years. Advice?

How much are your savings? Most banks don't want to lend for BTL (ask yourself why!) and so if you do find a mortgage you will need a heft deposit.

If you don't know what you are doing, getting into BTL right now is complete folly, IMHO of course!! If it's something you really want to do I'd recommend you spend the next 6-12 months learning about the various laws, regulations and practicalities and work out a proper business plan (ie how are you going to make money from this with best + worse case scenarios?!) You'll be able to answer the question yourself by then!

lr1277

Will you be doing short term lets (less than 6 months) or long term lets.

For long term lets, it is not knowing the tradesmen that is the issue, it is getting tenants.
Are there jobs in the area you are buying? What kind of property will those workers want? 1 bed, 2 bed or family homes?

Then if you do buy where there are jobs, you will want somewhere that is close to connections (road, rail and bus), close to the shops, places to go out.
Please remember this may not be somewhere you would live yourself, but would be suitable for a tenant. So neutral colour scheme is a must.
Also you shouldn't install something that you aren't prepared to replace because it is broken. So whilst you shouldn't have anything tatty, if it is a bit old but usable then it should be fine. Get the advice of a lettings agent.

In fact, speak to the lettings agents in the area you want to buy. Find out the state of the market.

HTH.

lr1277

A couple more thoughts.

My dad's gardner works in Hatfield, Herts but has student flats in Bath. The rental property doesn't have to be next door. Having said that when I was a student in Leeds, the landlord lived a couple of miles away in a big house on one of Leeds' most expensive streets whereas I was a tenant in a terraced house in one of the crappier areas of Leeds.

I choose to rent to professionals because the rent is higher and they are less hassle. But the yield is low.
A huge generalisation on my part, but you can rent out properties with lower rents to people without guaranteed incomes or those with incomes from the state. My prejudice is that there will be more hassle, but the yields are higher.

Again, HTH.