Buying a property with £10,000

willj

Thanks to everyone who took the time to comment. I have read them all and it has given me a lot to think about.

Thanks again.

Willj

Running_Horse

sharkie wrote: »

It is not often that I disagree with PasturesNew, however if you are working AND have loads of surplus cash, or parents willing to help it is an excellent idea.

firstly see a mortgage advisor to see how much btl cash you can raise. Legal fees, stamp duty??? etc takes a few £1000's and you will probably want a mortgage you can add into without getting penalised.

Then buy what you can afford, taking into account how much you can rent it for. Basically you have to be sure that the property market will go up too. Make sure you buy well and a large proportion of the mortgage is covered by the rent.

remember, mortgage rates will increase too

This sounds like a terrible idea in an uncertain economy.

Put your £10,000 in the bank and keep saving.

It is also impossible as no one will lend enough for NW London.

Squish_21

I'd put that in the bank, find yourself a good interest rate and get saving at least a 15% deposit.

Reasearch the market in the area to see how much you are going to need to buy the property you are after.

Simon11

I live in NW London, and for a Studio in a really bad area, its around £120k, 1 bed £150k

To get a decent mortgage, you will need 20%, so 30k deposit+ Fees to move.

Just keeps saving like I am:j

Owain_Moneysaver

Quite apart from your deposit you're also going to have to pay for:

Solicitor's fees and disbursements for the conveyance
Landlord's insurance, buildings and contents
Gas safety certificate (required by law) and any repairs needed to the heating system
Electrical safety certificate (usually required by agents) and any repairs required

And, as most smaller properties are let furnished:

Carpets / Curtains / Blinds
Major kitchen appliances
Lounge furniture
Bedroom furniture

Any redecoration and garden tidying required

You have to pay all this, and your mortgage, before you can put the property on the rental market, and then your first month's rent will disappear in agent's fees. Your sixth month's rent will disappear because the tenants won't pay it before flitting, the seventh month's will be lost because of the void period, and the eighth month's will disappear in agent's fees for the second tenant. Mr Taxman will want a large chunk of the twelfth month's fees, and the month after that it's time for the annual gas safety check, the insurances are due again, etc.

phlash

MW may be offering 80% LTV, but this is to experienced Landlords. The LTV drops away with less experience and certainly if you have no other property.

£10k may seem a lot, initially. But it is probably 1/3 of what you need.

Please, make the sums work with any future BTL. It's a business, therefore it has to make sense on a monthly basis, not on the basis that house prices will increase and you will get capital growth. That is not a business plan, it's a gamble. You may as well go to the casino with it.

sonastin

While your £10k is in the bank and you're saving to turn it into a more realistic sized deposit, use the time to do some research into what it takes to be a landlord. There is a lot more to it than I ever realised before joining this forum. It has the potential to be a really good investment once you have the initial capital, but only if you really understand what you are getting yourself into...