Is this a bad idea?

Jedeye_2

Hello All

Here is the thing. I currently live in London and rent. I tend to move around a bit so have steered away from buying my own place...plus my immediate neighbourhood is out my price range.

I have the opportunity to buy another house with pretty much guaranteed tenants (that I know well) who want the place for years. Their rent will pretty much cover the mortage.

Question: It seems completely backwards to me to rent my own place, and buy another, just to let it out. Is there anyone else out there who does this sort of thing and/or has some thoughts on this?

Bad idea..good idea...waste of time?

Any thoughts appreciated.

Cannon_Fodder

Plenty of people do, though most of the buy-to-let explosion of recent years was founded on releasing equity from house price inflation...hence the 95% drop in BTL this year.

"Pretty much cover the mortgage" sounds a bit tenuous. You should check that the rent for that type of property in that area DOES cover the mortgage. You might be happy to discount a bit for known, reliable, long-term tenants. But, in the event that your first tenants move on unexpectedly, you'll want to be able to re-let quickly without carrying a portion of the mortgage.

You'll need 20-25% deposit for a buy-to-let mortgage. And be happy that it might be tied up in that property, should you decide you do want your own place sometime down the road...

Mrs_Bumble

I agree as per above and I will just add a point as well, I rented a property out for a few years because of negative equity in the late 80's early 90's, had some good tenants and some shocking tenants, one of the worst being my SISTER! Thought I knew her pretty well!

I also had a perfectly lovely tenant who was great until her boyfriend moved in and the noise abatement people at the council were involved and lots of hassle and also non payment of rent that resulted in having to go to court and get an eviction notice and then 3 months to put the house right and about £5000 out of pocket, still! Was all very stressful, I was single on my own and not making enough out of the rent to put it in the hands of a management company who maybe could have dealt with some of the hassle and made it less stressful, I don't know?? Anyway just think all the pros and cons out etc

Good luck!