Buy to let mortgages

joanna_leigh

This is my first post, however I need to ask advice!

My next door neighbour asked if we would like to buy his house for £50, 000 (the value is about £80, 000) and the idea is to buy it and rent it out for around 4/5 years then knock both houses together. I know NOTHING about renting at all since I have never rented a house ..

My questions are - do I really need to BTL mortgage, or is any mortgage fine?
What is my LTV amount if I have around £5000 for a deposit and the values are above? (as I've figured I won't be able to get a mortgage for any more than 80% LTV)
Are there any restrictions around renting houses out, etc?

Please help mee!!

theartfullodger

BTL 75% max, usually...

Nothing to stop you raising cash on your current home to get to 25% (but explain why to mortgage company).

Restrictions on who you rent to?? Me, I only rent to those who I think will pay the rent & look after the place..

You would be very strongly advised to join a Landlord Association (RLA or NLA) and get on a course on how to be a Landlord (about £75). It's a minefield, very very easy to get things wrong...

Cheers!

Artful

BitterAndTwisted

Yep, and if you get things really, REALLY wrong not only will you have the Tenants From Hell you'll have the Neighbours From Hell as well.

I'm interested to know why your next-door neighbour is looking to sell an £80k house for only £50k. What's the catch?

joanna_leigh

Well he wants to move out as he is now disabled and struggles to climb the stairs and is going through a divorce and have agreed to sell the house for enough to pay off what they owe (there are several houses on the street that have been for sale for 2 years +) ... But as always I only know what he tells me and assume it's the truth.

So would I need to come up with a 25% deposit to do this? Cos I really do not think we could get that sort of money!

Course is a good idea, I like that. And £75 in the grand scheme of things does not sound a lot.

lr1277

joanna_leigh wrote: »

(there are several houses on the street that have been for sale for 2 years +)

When looking at buying a rental property, be sure that people want to live in that area/house. Is the house close to amenities, transport, schools etc.

Just because a particular area/house suits you, doesn't mean it will suit all tenants.

joanna_leigh

There is a train station about half a mile away and several schools within walking distance including a high school. Several shops and a nursery across the road and small village centre about two miles ... All of those were reasons I moved here in the first place. It's hard to tell what people want though - tried trawling RightMove for idea but still non the wiser really!

silvercar

If the value is really 80k, then you could present it as a vendor gifted deposit. ie you are buying at 80k but the seller is giving you 30k to be your deposit, so you need a mortgage of 50k.

I'd be wary of divorcing couples selling below value - what happens if the ex isn't happy with their share?

lr1277

joanna_leigh wrote: »

There is a train station about half a mile away and several schools within walking distance including a high school. Several shops and a nursery across the road and small village centre about two miles ... All of those were reasons I moved here in the first place. It's hard to tell what people want though - tried trawling RightMove for idea but still non the wiser really!

In that case I would talk to local letting agents and estate agents.
One to find the letting potential of the property and how much it could be let for.
The second to get an approximate valuation on the house with their knowledge of the area.

You could try the land registry website to see what the owner paid for the house.

Also is the house a semi-detached? If so are you ok with kids living next door? Or does it not matter because you have kids?

theartfullodger

lr1277 wrote: »

In that case I would talk to local letting agents and estate agents.
One to find the letting potential of the property and how much it could be let for.
The second to get an approximate valuation on the house with their knowledge of the area.

3 seconds later an estate agent will gazump you if you do that...


btw living next door to your let property will probably be painful: Once rented it becomes the tenants property but your investment. (Oh yes, no longer your property). The temptation to pop round/have-a-word/complain-that-they-don't-draw-their-curtains may be too much for you & you'll find you've been harassing your tenants & any Judge will side with them in an eviction case...

Cheers!

Artful

Thrugelmir

joanna_leigh wrote: »

There is a train station about half a mile away and several schools within walking distance including a high school. Several shops and a nursery across the road and small village centre about two miles ... All of those were reasons I moved here in the first place. It's hard to tell what people want though - tried trawling RightMove for idea but still non the wiser really!

Yet houses have been on sale in the street for over 2 years. So why do think you are getting a bargain?

joanna_leigh

I am wary but if I can get it at an affordable price it would be great.

The main reason we want it us to knock both houses together once we can afford both mortgages (which isn't right now) hence the idea to rent it out. On this side of the street we are actually the only two houses so the value for me is that possibility rather than just simply renting it out for a profit.

Kids don't bother me, I'm not sure pets would either - but as with everything suggested these are all things I need to think about for sure.