Buy to let -First time buyer

steviehud37

Hi

I am thinking about buying a terrace house and using it has a buy to let

So can anyone help with the following

Mortgage-interest only best option? What are the current Fixed term 5 year deals?

How much deposit will i need ? (house i am thinking about is 75K)?

Any other costs will i need to budget for? ie Buildings insurance? Fees from buying House (rough cost please?)

Any information/links would be so appreciated

I really want to get a handle on costs involved

Burridge60

Do you have a mortgage on your own home?

steviehud37

yes i have got a mortgage

17 years left
81K left on mortgage
bought Flat for 125k
valuation roughly 115K

Hope this helps

Burridge60

You need a 25% deposit ideally more and a thick skin

You must accept that property can go DOWN and DOWN as well as up. Research rental agents charges, full management charges? (or get calls about ball cocks all hours), wear and tear (and damage too), redecoration if you don't like goth colours!, the mortgage lenders that make it seem easy but add a £3000 fee to your mortgage debt.

Seriously work it all out. If you are not making a profit from it over the first 12 months if the property dips in value you will be chasing your losses and wont find an easy way out.

Needs great timing on your purchase and great timing on your exit strategy.

Sounds very much like shares to me!

Gorgeous_George

I'd want a monthly rental income of £500+ on £75K property. Is that achievable?

If not, what drives your desire for BTL? It can be hard work and stressful (but it can be rewarding).

If you can't be bothered to find what deals are available yourself, I doubt you'd find the time to make a BTL work.

Mortgage-interest only best option? What are the current Fixed term 5 year deals?

Google came up with this (link). 5.99% for 75% LTV or 4.99% for 65%
Interest only makes your tax return easier The interest is an allowable expense.

How much deposit will I need ? (house i am thinking about is 75K)?
25% of £75K is £18,750; 35% of £75K is £26,250

Any other costs will I need to budget for? i.e., Buildings insurance? Fees from buying House (rough cost please?)
I pay ~£130 for buildings and landlord insurance
Voids (expect 1 month per year to be tenantless)
Mortgage arrangement fees
Legal costs
Time
Remember, the mortgage needs paying even if you do not have a tenant. I had 2 months void one Christmas and about £2,000 of repairs/missed rent from a bad tenant. You need an emergency fund.

Any information/links would be so appreciated
Try Landlordzone

I really want to get a handle on costs involved
Use Excel
I'd want a monthly rental income of £500+ on £75K property. Is that achievable?

Good luck!

GG