Buying with 5% deposit, then Letting straight after...Possible?

master_ian

Is it possible to buy a property with 5% deposit, (cannot wait, and would take ages to raise the 15% required for BUY-TO-LET), live in it for about 3 months, then rent it out?

Master E is in doubt....

petegaffney

Hi Ian,

I did something similar to what you are trying to achieve here, but that was before the whole Buy-to-Let market really became fashionable.

I aquired my property in the usual fashion with the 5% deposit and then I informed the mortgage provider, a couple of months after completion, that due to a change in circumstances, it was my intention to then let the property. Not alot they can do really as you have the property in place already.

There was a slight increase to my mortgage payments, but never the less, it was done and dusted and I started letting pretty much straight after. Once the mortgage has all gone through and you have the property, it is alot easier. You must inform them however as (buildings) insurance policies could become null and void if you haven't been up front and honest.

You must appreciate that because (now) so many people are doing the buy-to-let thing, that the financial providers are offering these "specially tailored" mortgages for this purpose - hence the higher deposit.

The reason that they are demanding at least 15% is so they have something to fall back on in case you are unable to let the property and subsequently default on your payments.

Alot of people are purchasing second and third properties with the intention to let - so please ensure that the area when you intend to buy (and let) in, does has full rental potential, and is not already over run with other lettings - many of which could be empty.

Best of luck.