Renting my house and using equity to buy

Bomber07

new_home_owner wrote: »

Just think if you buy anther house with a 85000 pound mortgage on and the house you have been renting out goes from 180 to 280,000 you could sell and have a nice little nest egg of 110,000 pounds.

Im not sayIng they will go up instantly but history tells us house prices usually double every 10 years, i paid 70,000 for mine in 1999 and in 2009 its was valued by the mortgage company at 150000, the estat eagents valued at 169,000:eek:

Not only is this untrue, but it is totally irresponsible to be posting this kind of comment on a website designed to help people save money.

zzzLazyDaisy

OP I almost did what you are considering. I had an apartment in Manchester close to a hospital and airport and easy to rent out with only a small mortgage. I wanted to move and my idea was that I would use the rent money to pay the mortgage on the new place. In the end it all got too complicated (landlord legislation, tax etc) and I just wanted a quiet life.

So I sold up and used the money from the apartment, and my savings to buy a small place mortgage free. That was June 2005. Shortly afterwards the property prices for apartments in Manchester imploded. I was so pleased I got out when I did.

I think there is room for another drop in house prices, and although over the longer term (maybe 10-20 years) prices will almost certainly rise again, for someone in their 50's that is a very long time. In my view you should be consolidating your financial position and reducing your debt in readiness for retirement. I mean no disrespect, I am also in my 50's, and have moved from a tolerance for a moderate amount of risk, to being quite risk averse, and this has stood me in good stead through the recent economic crisis.

Just my opinion and not in any way intended as financial advice.

Regards

Daisy

TypeR

Good grief, with respect, why on earth do you want to be going near a mortgage at your age - and I don't mean that in a rude way. Sell your house, buy the house you want and live happy being debt free.

if you're in any doubt about what is instore for the United Kingdom, then just watch these two Videos about what is going on in the USA.

We have run our economy EXACTLY the same way they have, consumer debt binge with over inflated houseprices, money printing and out of control government spending.

Think very very carefully - taking on debt NOW is really not such a good idea in my opinion.

Listen closely to these videos - you might find them boring, but LOOK at what is happening over there.

http://www.youtube.com/watch?v=eZA0qNsf4m0&NR=1

http://www.youtube.com/watch?v=8rWrC_PLvlc

new_home_owner_3

Bomber07 wrote: »

Not only is this untrue, but it is totally irresponsible to be posting this kind of comment on a website designed to help people save money.

Like i said usually, it might have not happened once in the last 100 years, thats why i said usually.

And has for you saying everyone would be doing it if this was right, i believe they would if they could, but with tight lending and people finding it hard to get mortgages it has slowed right down.

A friend of mine has been trying to buy another house, he has 5 btl properties and he said the only thing thing thats holding him back is the high btl mortgages and he can only apply for a new mortgage every 6 months.

Heres house prices from 1952 and only once did house prices not double and from 1999 to now they more than tripled.

http://www.allagents.co.uk/house-prices-from-1952/

doire_2

getmore4less wrote: »

Just do the numbers.

rent £700pm

£170k borrowings required(or is the new place going to be more than this?.

£17k salary so 4* £68k on residential say 4% £226pm
£102k on BTL say 5% £425pm

£651 just covers the interest unlikely the £50 left will cover costs so you will probably be needing to use some income to support this.

Note this is interest only if you want to pay off this debt in 10 years you need another £1000pm.

Pure property speculation and the rental property value increases will be subject to CGT.

Think the other way, why have you not gone out and bought a £170k house to rent before? Why is this suddenly a good idea?

Maybe she watched Homes Under The Hammer for the first time today

doire_2

new_home_owner wrote: »

and from 1999 to now they more than tripled.

http://www.allagents.co.uk/house-prices-from-1952/

And what fuelled this? 100% mortgages, liar loans, banks lending to anyone! Those days are gone and wont be back

new_home_owner_3

doire wrote: »

And what fuelled this? 100% mortgages, liar loans, banks lending to anyone! Those days are gone and wont be back

You can blame the banks, liar loans and 100 percent mortgages, if people want to lie and have 100 percent mortgages they know the risks if they dont pay.

I think you will see 100 percent mortgages again, and if people want to lie to get a loan that they have no way of paying back, they deserve all they get.

My friend never had 100 percent mortgages to buy any of his btl houses, but then again he bought at the right time.

The only people who have really lost out are who bought with 100 percent mortgages at peak 2006/2007.

The other person does have a lot of equity, but i think they are to old to do this.