should i or should i not?!

molly22

i have a tracker mortgage with a drawdown facility which means i can obtain the sum of £70k just by writing a cheque, no questions asked. while the bank rate is .5% my mortgage rate is 1.5%.
should i use the money to buy my brothers cottage which he is desperate to sell (in a lot of debt)?
i could probably buy it a little below market value, then rent it out. (possible £400 pm.)
i understand that as the bank rate rises i will be paying more each month.
its seems a good idea, but sure there must be some pitfalls ive not thought of.

any help or advice welcome.

thanks molly

[Deleted User]

Bottom line is, does it make financial sense? Can you afford both mortgages - even if you couldn't rent out the cottage? And can you continue to afford them if rates went up by another 2 or 3 % in the next couple of years?

If it makes sense, then yes, could be worth doing. But be careful of doing it just to help your brother. Or he may not be the only one in a lot of debt.

silvercar

It seems you want to help your brother, families are funny beasts. Will your brother feel hard done by if prices rise and you make a profit on the bungalow?

You need to be doing this because you want to get into BTL, not to help your brother out.

geoffgeoff

We have a couple of BTL properties and they work for us. Don't expect to get rich quick tho and be prepared to be dealing with tenants issues on a reasonably regular basis!

Check out local rental market by visiting some local agents and asking questions. Our flats are in a very popular area and we've never even had to advertise for tenants - we've literally had then knocking on the door and saying 'can we rent your flat?'

Obviously it all depends on your area - do your research!

geoffgeoff

Oh yeah, I also recommend having a good read of this site!

http://www.rla.org.uk/