buying a second property

anskills

just wondered if you guys knew any web sites (or folk on here) that could talk me through all the ins and outs of buying a second very cheap property to refurbish and subsequently let out. the area i live in still has nice flats for under £15k - £20k in decent areas that just need a bit of tlc. a new dual carriageway (to be completed within a year) to a major city and redevelopment of the whole town means property value should greatly increase. i have a decent knowledge of whats required and am fairly handy with the tools but want to find out everything and any loopholes to make this a sound investment.

cheers,

kev

Joe-C_4

nice flats for under £15k - £20k

what area is that?

izzy_flint

moonie check pm's

anskills

Joe-C wrote:

what area is that?

angus in scotland. areas such as arbroath, brechin, montrose, forfar.

when i say nice flats, i mean decent areas and structurally sound. just needing tlc and minor reconditioning.

see here for an example, fixed at £25k in a nice area in a town that can only go up in fortunes. http://www.tspc.co.uk/details.asp?id=73211

again a cheap one: http://www.tspc.co.uk/details.asp?id=73001

and again: http://www.tspc.co.uk/details.asp?id=73047

these are finished flats. i would prefer one needing more work done on it and pick it up for £15k.

anskills

nobody can offer any assistance?

kinster_2

What do you want to know?

You just either finance it through a BTL or other financial means as the amount is so low.

You need a 'full structural' survey (cost depends on price of property).
Appoint solicitor, exchange then complete.
Find your tenants

Also, you get taxed on the rental income, but the interest of the loan is tax deductible. And when you come to sell, you are liable to Capital Gains Tax minus your CGT allowance as it is your 2nd property

I don't know what more do you need to know?

anskills

is there anywhere on the web that i can look (inland revenue?) to see exactly what is tax deductable and what i can claim back for various reasons?

i was after things such as maximum % LTV normally given, usual letting agency charges and whether folk think its necessary to use them, just general advice and hints and tips to maixmise profit and minimise ease of leasing that experienced folk might have

budgetflyer

If you are serious about doing this then I suggest you speak to an accountant who can guide you through what you can claim or not claim tax wise. You will need to speak to a broker to organise funding. Speak to builders /builders merchants as to renovation costs.Speak to letting agents to determine demand ,what fixtures and quality are required by prospective tennants.
Buy some books on these subjects.Invest a lot of time and some money on learning the ropes before jumping in and the chances are you will succeed in your venture.

Debt_Free_Chick

i was after things such as maximum % LTV normally given, usual letting agency charges and whether folk think its necessary to use them, just general advice and hints and tips to maixmise profit and minimise ease of leasing that experienced folk might have

Lots of folks with bags of experience on this Property Investing Board

http://boards.fool.co.uk/Messages.asp?bid=50096

theGrinch

max ltv usually 85%, but some lenders will lend a minimum amount

Lighteater

The maximum LTV is generally 85%, but you're in a grey area when it comes to mortgages - you may well be below the minimum allowed.

You also need to prove 130% rental coverage - in other words, rent is 130% of mortgage repayments.

Outside of that standard route, look at refinancing your own home and extracting equity that way. it's generally a lot easier, and if you can get a draw-down facility, you only pay interest on what you use.

Another possibility is using a credit card. Check on this site for 0% intro deals - that can give you 8-12 months to turn a property around, if you can get a decent credit limit.

Sounds to me like you're in an ideal position to get going on this - good with DIY, deep area knowledge, new transport links, low cost of entry. Sounds damn-near perfect to me!

You might also want to check out the site that sent me here - ThePropertyMan - they seem to specialise in cheap, below-market-value properties.

Oh, and check the Bookstore there - I know the PS book range and it's excellent!

Good luck!