Is now a good time to buy a property to rent out?

first78

I'm a total novice in the world of buying to rent but now that house prices are falling I was thinking about buying a property to rent out. I have no idea where to start looking for simple, strightforward information although I'm hoping here will be a good start!!

Now that house prices are falling is there still a market to rent or will more people be buying homes of their own rather than renting?

What is the best way to find out if I can financially afford to buy a second property?

What else do I need to consider?

poppysarah

You've got lots to consider. What's the rental market like in your buying area?

huntersc

Yes if you're paying cash and no if you need a mortgage. Simple as that. With interest rates as low as they are and every investment vehicle performing badly property can offer a decent return.

Put £300k into property you might see £1.2k - £1.5k back a month. Put £300k into a bank account paying 1% interest you might see a couple of hundred a month.

However if you need a mortgage to buy a BLT then you'd be crazy to go down that route right now.

ncooper1974

Can I ask if you have any savings? if you're looking to buy a BTL right now you will need at least a 25% deposit, maybe more....

Conrad

I agree with Hunter that B2L mortgages are too expensive really.
Having said that, if income is not your priority, some will argue capital growth over the long term (15 years +) might make it worthwhile.

I've been in 2 minds for ages whether to get a B2L, but I keep waiting and the prices keep falling.
There sont be a sudden price surge anytime soon, as mortgages are so severly limited now, so there wont be enough funds to bring about a sudden swelling.

I am in the process of buying a property abroad as I expect the rental yield to be well above 10% after ongoing costs, plus we can use it and save thousands on holidays each year.

first78

ncooper1974 wrote: »

Can I ask if you have any savings? if you're looking to buy a BTL right now you will need at least a 25% deposit, maybe more....

I don't have any savings right now but was thinking if I can buy a property for 30-40K and put down a 10% deposit then I wouldn't be looking at massive monthly repayments on a mortgage.

first78

poppysarah wrote: »

You've got lots to consider. What's the rental market like in your buying area?

This is something I need to look into, can you tell me how best to do this? Is it just a case of phoning letting agents to ask?

ncooper1974

first78 wrote: »

I don't have any savings right now but was thinking if I can buy a property for 30-40K and put down a 10% deposit then I wouldn't be looking at massive monthly repayments on a mortgage.

you really shouldn't be thinking about a BTL if you dont have *any* savings at all. as said earlier, you will need at least 25% deposit - so even if you think you can buy a house for £30k, you'll need £7.5k as a deposit.

if you're serious about buying a BTL, then you should start saving up for a deposit. I assume you dont have any other debts (credit cards, loans) that might be better to clear first as the interest on those will be more than the interest on your savings account

ncooper1974

first78 wrote: »

This is something I need to look into, can you tell me how best to do this? Is it just a case of phoning letting agents to ask?

Have a look on RM for your area

poppysarah

first78 wrote: »

This is something I need to look into, can you tell me how best to do this? Is it just a case of phoning letting agents to ask?

Pretend you're looking for someone to rent if you do ask LA.

Rightmove has a to rent section - and with property bee installed you'll see the price drops.

Look in the local papers too to see what gets avdertised rent wise there.

getmore4less

I was thinking about buying a property to rent out. I have no idea where to start looking for simple, strightforward information

Start with gross yield of 10%