letting/buying dilemma

pedro789

If anyone has any advice/thoughts I'd be very grateful. Here's my situation:

I really want to move this year, little fella is growing up and we need bigger place.

I have 2 properties. 1 I rent to a family friend (great tenant) for 450 p/m with no outstanding mortage, the other we live in but been on the market for nearly a year without any serious interest. There's about 20k outstanding on the mortgage.

I'm thinking of renting my house (EA thinks about 500-550 pm) but bit reluctant (hassle involved/dodgy tenants etc) and would prefer to sell to put down a bigger deposit and keep hold of savings, but can't see my house selling anytime soon.

Houses in the area I'm interested go for about 170 - 180k. I have 50k savings, so I could find 40k (20%) deposit but not much left for improvements/rainy day. The mortgage would be 907 p/m which is OK as I have a fairly good job.

The rent from both properties (assuming they are both let) would cover a fair proprtion of the new mortgage but I'm bit worried about:

- using my savings for deposit and leaving myself short
- the hassle of looking after two properties, while working full time
- whether I should sit tight till I sell and get better deposit/rate

Sorry if this is a bit random but I know how knowledgable people on here are and would appreciate any thoughts/advice.

Thanks

mynameisdave

Its not a great idea to plan the fact you can manage with your payments if the rent is coming in. if it isnt coming in then you have a big hole to plug.

£900 for a monthly payment on a 130K mortgage sounds a lot, what rate is that, because you are looking around 75% LTV at those levels.

BitterAndTwisted

I think you'd be bonkers to let a second property and then buy a third if you can't afford all of the payments with absolutely no rent coming in. Never put all of you investment eggs in the same basket. Ever.

pedro789

mynameisdave wrote: »

Its not a great idea to plan the fact you can manage with your payments if the rent is coming in. if it isnt coming in then you have a big hole to plug.

£900 for a monthly payment on a 130K mortgage sounds a lot, what rate is that, because you are looking around 75% LTV at those levels.[/QUOTE]

It's based on 140k at 4.79% over 20 years. Thanks for the reply.

pedro789

BitterAndTwisted wrote: »

I think you'd be bonkers to let a second property and then buy a third if you can't afford all of the payments with absolutely no rent coming in. Never put all of you investment eggs in the same basket. Ever.

I can afford new mortgage with no rent coming in as have no/small mortgage on my properties but I take your point. Thanks for the reply.