Should I go debt free or invest in BTL?

fumken

I am in the process of selling my house. I should have about £250,000 cash left thereafter. I am currently renting too. I have a good mind of simply buying something within this range and have little or no mortgage, especially as I recently got my fingers burnt badly from renting out my house. I am also still tempted to split the money and buy a house and also get a BTL mortgage for a second house. I like the idea of not having a mortgage but I also feel that I may be wasting an opportunity. If I do not owe, the cash savings from my salary may not be as good a long term investment as bricks and mortar. So I am not quite sure which way to go.
Cheers.

BitterAndTwisted

Debt and mortgage-free every time! What you're not paying in rent could be invested in something a lot less risky than a BTL

ETA: Considering all of the heartache you had with your LHA tenant and their arrears and non-payment of utility bills I'm gobsmacked that you're considering a BTL. You must be a glutton for punishment!

poppysarah

BTL? Really? Go and read this forum for a week and then make up your own mind.

Doozergirl

Each to their own.

I don't see investment as being a glutton for punishment, I see a properly calculated risk providing for the future.

A relatively modest deposit in a BTL which provides a properly calculated income, covering a repayment mortgage whilst having a sensible mortgage on your own home isn't a bad thing. Yes you have to pay out for it sometimes and you must be able to afford that; but even a sizeable mortgage which decreases with inflation as rent rises, paid for entirely by a tenant is not a bad thing. And at the end of the term it's an income.

It's not a stupid idea. What is a stupid idea is to think that any property is good for that when actually you need a really good yield which isn't provided for in general asking prices vs rental income. Some places are better than others for rental yield. So it's incredibly important to shop around.

But understand that being a landlord is a job which carries responsibilties. Decent accommodation should be a right for tenants, not a privilege. You owe them that.

fumken

Thanks all. I see where the glutton for punishment is coming from because I really suffered in the hands of a terrible tenant. However, I have had good people in the past. I agree that one needs to consider the yield. I have not sold my house and we have exchanged contracts and will complete in a few days. I am still not sure, but I think it will be debt free first, then start saving. I am not sure there is any investment as good long term as property really and one must think of ones pension .

Bermuda_John

Depends if you want to progress financially or not. I dont see what the fascination in england is with owning a house outright. YOu get to 75, own a massive house yet have no income or means of generating any.

buy some property,make some monthly gains, take the capital gains and build up some proper cash. you can always liquidate the investments and pay off your mortgage at any time .......... presuming your investment is sound

sonastin

Start with finding the place you want to live in and buy that outright. Then start building up a deposit to put down while you look for a BTL. If you find the right BTL property before the money set aside is enough for a deposit, it might be worth topping up by taking out a small mortgage on your home. Make having the right roof over your head your priority and then let the timing and the price of finding the right properties guide your decision on how to invest / finance your investment.