First time Buy-to-let - is this a good idea?

Firestorm_2

Hi Everybody. I have been a big fan of MSE and I need some advise from the forum members to see if this sounds like a good idea.

I am a 28 year old single guy with no dependants living in plymouth.

Thanks to Martins help, I have paid off all my debts (including student debt) and have saved up £17,000 and am managing to save about £500 per month each month.

I am currently renting.

I was thinking of buying a property (perhaps a 2 bed flat) in the plymouth area for around £100k.

The mortgage payments would be about £500 - £600 per month. something I can afford since my rent is currently £525 per month.

I was thinking about living in one of the rooms and renting the second room out to someone, or renting both rooms out.

My job is secure at least for the next 18 months as I have an 18 month contract but after that.... who knows.


I have lived in lots of different rental places, and i have learnt a lot about what a landlord does, and I know that it is not quite "easy money" especially when expensive things go wrong. But I really think I can do this.

Do you think that now is a good time to buy-to-let? I know there are less and less renters out there, but plymouth is a big student area and the university is expanding every year. Although I would prefer to rent to young profesionals rather than students.

I have run my own busineses in the past, so i am fine with risk, and also not phased by insurance and legal requirements etc.

One of the problems I am currently strugling with is that I like to travel and not really "settle down" so I am not buying the house for me to live in as a primary reason, but buying a house for someone else to live in (tennant).

To assess demand, I placed a small advert on a couple of rooms-to-rent websites, with a description of the sort of property I am after and the location, so that I can see how many inquirereies I get. If i get no enquirines from my "fake" advert, I will know that there is no demand, if I get lots then I will know there is demand.

Please tell me what you think of this idea..... I really value all the help people from MSE have given me in the past....

Firestorm.

RomansProperties

Hi
In the current market I think if you do decide to do it, I would live in the place and rent one of the rooms out.
That way at least you can reduce your outgoings.
You will also get a better mortgage rate if its not a buytolet rate.

Web sites I have used to rent rooms in properties are
Gumtree (free)
Easyroommate (Pay Site)

There is normally good demand from both.

Hope this helps

Firestorm_2

yes, thats a good idea to live in one of the rooms and rent the second room out. that way it would be easier to take care of any small problems that arise and make sure that the place is not destroyed by party-animal tenants.

If I get a normal, first-time-buyer mortgage but still want to rent one of the rooms out, is that ok? I heard somewhere that I had to notify the mortgage company if you want to rent out part of your house.... and that there may be charges associated with it.... is that right? It also seems almost impossible to get a "buy to let" mortgage these days, so i would probably start off with a normal first time buyer morgage.

SwissLe

It's not hard to get a BTL mortgage these days, you just need a decent deposit. 30% was the minimum they would give BTL to me at. The rates were also pretty poor compared to the amazing deals avaliable to personal users at the moment.

Sounds to me a no-brainer, you would halve your rental costs by adding a room mate.

thelawnet

Firestorm wrote: »

Hi Everybody. I have been a big fan of MSE and I need some advise from the forum members to see if this sounds like a good idea.

I am a 28 year old single guy with no dependants living in plymouth.

Thanks to Martins help, I have paid off all my debts (including student debt) and have saved up £17,000 and am managing to save about £500 per month each month.

I am currently renting.

I was thinking of buying a property (perhaps a 2 bed flat) in the plymouth area for around £100k.

The mortgage payments would be about £500 - £600 per month. something I can afford since my rent is currently £525 per month.

I was thinking about living in one of the rooms and renting the second room out to someone, or renting both rooms out.

If you're living in it, it's not BTL. Also the mortgage payments should be much less than £500/month if you've got a good deposit.

Do you think that now is a good time to buy-to-let? I know there are less and less renters out there, but plymouth is a big student area and the university is expanding every year. Although I would prefer to rent to young profesionals rather than students.

Have a look at auction prices to see what things are really worth. You should be looking for a bare minimum of 30% off, preferably 40%, and better still 50% off the 2007 price.