Would you buy a buy to let at the moment

Thrugelmir

if interest rates went up we could cope on the £40k mortgage on our home but not sure how it would affect the mortgage on the buy to let...

If you can't afford it don't do it. The combined exposure of the BTL and your own home would amount to £340k. Thats a lot of money to back on one horse when you've little in the way of other asset types.

Rather than fritter your money away, plenty of opportunties via ISA's and Pensions to build a well diversified portfolio in a tax efficent manner.

Once you've the capital amassed that you can afford to lose. Then reconsider BTL.

AGBAGB

I'd always look for a property you can add value to imediately. Market falls are then absorbed.

As long as the rent covering all expenses and giving a return more than around 5% then it's a good risk in my book.

tartanterra

fertyskids wrote: »

Me and hubby paid off our mortgage a couple of years ago.

we spend the £900 a month thats was on the mortgage on "nice" things but would rather save it.

we also have about 25k in the bank

we looked at the stock market but were not happy with the advice we were given

we are thinking of buy to let... use 10k cash deposit. £40k mortgage on our home and £150k mortgage on buy to let.. this would give us a 3 bed house with garage in bh21 a good area good schools and very rentable.

i am unsure if the housing market will go down and interest rates will go up.

we see this as a longterm descion 15 - 25 yrs we are happy to have a mortgage on our own property as we will be "saving" this money each month. if interest rates went up we could cope on the £40k mortgage on our home but not sure how it would affect the mortgage on the buy to let... although we would still have at the moment £150k ecuity in our house.

would you do it? thoughts please...

sorry i also manage a buy to let (no mortgage but in trust for my son so financially seperate) so im ok with tenants and property maintenance etc its the mortgage side that will be new to me.

But to let can be an excellent source of income, however you shouldn't confuse it with "mortgaged up to the eyeballs to let"
The income you receive from letting can be easily eaten up by the debt repayments, and as many "enthusiastic amateurs" have found out, can end up costing you dearly.

Unlike the "crash, crash, crash" merchants on here who are willing a houseprice crash as they are embittered by their own inability to afford a place of their own, many people believe houses prices are likely to stay flat or even dip slightly over the next few years. So....why don't you use the spare £900 a month you have at the moment to save a for a bigger deposit?
With a much larger deposit you are servicing much less debt, and are far more likely to turn a profit.

I certainly would never have purchased a BTL with only a 5% deposit and your original post demonstrates that you have some doubts about the level of debt you will have to take on.

If I were you, I would sit tight and save, until I had a minimum 30% deposit at the very least.

chucknorris

I am a LL, I suppose I would buy another if I spotted real value, but if I was you I would just keep an eye on the market for the next few years, I don't think you will miss out and you could get yourself a bargain if you are patient enough to sit tight.

Rinoa

fertyskids wrote: »

would you do it? thoughts please...

To my mind BTL only works if you buy at least 15% below market value and add value to the property. You may have to be patient and put many low offers in, but they are out there.

However, rather than buy to let I'd sell it on immediately to make a quick £15/20k.

Quicker profits than BTL and with a £10k CGT allowance each you should be able to do one a year completely tax free.

nearlynew

Rinoa wrote: »

To my mind BTL only works if you buy at least 15% below market value and add value to the property. You may have to be patient and put many low offers in, but they are out there.

However, rather than buy to let I'd sell it on immediately to make a quick £15/20k.

Quicker profits than BTL and with a £10k CGT allowance each you should be able to do one a year completely tax free.

Is this what you're doing at the moment columbo?

rockitup

Rinoa wrote: »

To my mind BTL only works if you buy at least 15% below market value and add value to the property. You may have to be patient and put many low offers in, but they are out there.

However, rather than buy to let I'd sell it on immediately to make a quick £15/20k.

Quicker profits than BTL and with a £10k CGT allowance each you should be able to do one a year completely tax free.

Then your profits will be taxed at Income Tax levels and not CGT

Rinoa

nearlynew wrote: »

Is this what you're doing at the moment columbo?

No, retired couple of years ago.

delain

I can't give you advice on the housing market but if you buy something 3 bed in the BH23 6 area I'd be a ready and willing tenant :rotfl:

ETA: Actually pretty much BH23 anywhere,

Graham_Devon

Rinoa wrote: »

To my mind BTL only works if you buy at least 15% below market value and add value to the property. You may have to be patient and put many low offers in, but they are out there.

However, rather than buy to let I'd sell it on immediately to make a quick £15/20k.

Quicker profits than BTL and with a £10k CGT allowance each you should be able to do one a year completely tax free.

Can I get this right?

YOU are going to get the property for 15% below market value. Which tells me that no other person has put in an offer above yours. Which tells me lack of interest.

But YOU are going to sell it on straight away, and, unlike the seller when you bought, are going to have no issues whatsoever getting a buyer paying close to the asking price....and everyone lives happily ever after?

That business plan has some serious merit. Wonder why no ones ever thought of doing that?!