What's best - Rent out + get second mortgage or sell everything and buy another place

Snibbers

Hello - I'm finding it really hard just to get some general advice without having to pay for a big 'Independent Financial Advisor' type company to take over all my finances!

I own a flat and rent it out to a tenant. I rent a flat in another city and now I'm settled there in a new job, I'm thinking of buying there.

Main question: Am I better to keep on the flat I own and rent out (the rent covers the mortgage plus a little more) and get a new, second mortgage separately to buy a new place (for which I'd pretty much have no deposit).
OR, am I better selling the first place and using the profit on that (would be around £50-60k) as a deposit for a new place?

Do Citizens Advice or anywhere like that offer free general financial advice as I really need help with looking at different types and terms of mortgages but don't want to have to pay a fortune for the privelege and I'm really kinc of lost about where to even start! Thanks!

Cannon_Fodder

Is your current flat rented on consent-to-let or buy-to-let basis?

The former will mean your income restricts second mortgage affordability. Which together with the missing deposit, makes it a non-starter. Just sell and take the equity to the new place as deposit.

The latter will allow you to use your income in full against a second place as your own residence - although without a deposit, you will struggle.

Potentially, if you have equity leeway in your first flat, you could re-mortgage to release some for the deposit, but the BTL needs enough equity to remain in it, to satisfy the BTL Lender, usually 25%.

As for advice - why not pay for some? You have a business, in renting out a property, so why would you not seek the best advice to make sure that the business operates effectively?

getmore4less

Lack of deposit is going to be the first hurdle.

What sort of prices are you looking to buy at that?

That means selling the flat
Or raising more money on it limit will be aroud 75% LTV will that be enough free cash for a depsoit.

Gross yield will give an indicator if it worth renting it out anyway even if you can raise enough money.

THe other factor do you want to be a landlord, made sense while you were trying out a new area but long term?