How do i start to mortgage a property portfolio ?

mikeyw

Guys,

My introductory period for my own house mortgage runs out in a couple of months. I’ll be left with about £80K on a £400K house.

I want to use this opportunity to remortgage with no charges to release some equity to consider at least one BTL property in the North East.

What’s the best way to do this ?

Should I remortgage say £100K and keep a repayment mortgage or just go for £100K on interest only ?

This will give me £20K as a deposit for a 2 bed terrace to get me up and running.

However I’m unsure what happens next after I’ve taken an interest only mortgage on the new BTL property for the remainder of the cost. How do I go about raising the next deposit for a potential second property? Obviously there’s no money to take out of the 1st BTL property so I assume I have to raise further deposit money from my own house (meaning charges if done within the 2yr period)

I’m aware of the risks of BTL but am going to try a couple of small cheaper units rather that one expensive property.

What’s the key to been able to roll money forward to the next property without having to keep raising further cash for the deposits?

TIA,
Mike.

Mrs_pbradley936

Something that works for me is an offset mortgage which only charges interest on what you are actually borrowing. As an example if you have three properties each bringing in £500 then you will be borrowing £1500 less every month. You have to have a good income or assets way over and above what you want to borrow but Barclays/Woolwich have a very good flexible account.

Mrs_pbradley936

Also you do not have to have a mortage tied to a given property. Often it makes sense to have the mortgage secured on your own home because debt to borrowing ratio is better. It makes no difference and all interest is tax deductable. You need an accountant and a flexible mortgage.

mikeyw

Thanks PB !

Any others have advice here ?

Need to make a decision in the next few weeks.

furndire

Try TheMoneyCentre.net. They have meetings at various places - which are free to attend. We went to one in Sheffield earlier this year. really helpful, no pressures, but we learnt a hell of a lot. We weren't sure how to raise the money for a new build we are doing. But after listening to the speakers, we realised that there would be no problems raising the money we needed and some. Oh, and yes there was a free lunch!!! I do not have a vested interest in the above site either.

whambamboo

mikeyw wrote:

I’m aware of the risks of BTL but am going to try a couple of small cheaper units rather that one expensive property.

What kind of yield are you looking at, and what area?

Conrad

Me and other Landlords have sold UK portfolio. Investing in Europe and Morocco makes a lot more sense.

Any canny investor knows you buy low sell high.

The only real estate worth having in the UK is commercial property - see Daltons weekly as you can alter property to increase yield.

As for resi stuff, you get a better return from the Bank without all the hassle and costs.

Before anyone says it....... I also buy for the long term, but that doesnt mean I want an unacceptable return in the short or medium term.

Do give you an idea my Moroccan property is increasing in value about 35% pa. The Berlin stock is just starting to increase and we fully expect the price curve to be similar to that of London from 1993 - 2004.

Now looking at Motenegro, offplan flats.

Offplan is attractive because your small deposit levers you into profit on the full asset value (as long as you resell the contract prior to completion).

Never forget, UK B2L in 1994 was viewed by 99.9% of people as too frigtening and complex.
10 years from now buying abroad will be a spopular as B2L is now, so its a case of do you want to be at the back of the queue again, or this time to you want to trailblaze?

Mrs_pbradley936

I have experience of investing in property abroad and I would be very cautious, in the mid 80’s I lost £75k on a buy off plan development in Portugal. So did lots of other people, we all thought that although the builders had gone belly up at least we owned the land. Thousands of pounds and 4 years later we did not own anything. I at least had not borrowed the money to invest so was better off than many others. I have also bought property in the USA and never had any problems at all, in fact their laws for protecting consumers are stronger than ours.

F_T_Buyer

Didn't you hear Martin Lewis on TV today?

mikeyw

F_T_Buyer wrote:

Didn't you hear Martin Lewis on TV today?

I missed it - what was the gist of his comments ?

F_T_Buyer

mikeyw wrote:

I missed it - what was the gist of his comments ?

http://news.bbc.co.uk/media/video/42081000/rm/_42081438_debt_lewislive_vi.ram

You can watch it there.

Check out the other threads here about investing in property. Basically, it's not a good time to invest in property.