advice on buy to let

joebob

own house valued at 175k outstanding mortgage of 42k wanting to buy house to let at 110k but not got 15% deposit thinking of putting 20k on mortgage for fees deposit etc. is this the cheapest and easiest way to do it ? also been told fees for letting agent £350 and 15% of rental income is this the going rate and is it best to have one.? last one how much for solicitors fees.

dunstonh

own house valued at 175k outstanding mortgage of 42k wanting to buy house to let at 110k but not got 15% deposit thinking of putting 20k on mortgage for fees deposit etc. is this the cheapest and easiest way to do it ?

It wont help you on the tax front but its possible to do it that way.

also been told fees for letting agent £350 and 15% of rental income is this the going rate and is it best to have one.?

Seems about average. Would you be able to do all the things the letting agent could do? Are you in a position to comply with the new rules coming in next year (which will be mostly handled by the letting agency)?

last one how much for solicitors fees.

No different to a normal purchase.

I know you havent asked about anything else but you are about to enter into a high risk transaction and you say you dont a 15% deposit (£16,500). That really is an issue of concern. What you going to do when the tenants run off and leave the house in a tip and you get no rental income for 6 months whilst you go through the eviction proceedure? Can you afford the monthly repayments when they go up half as much again (on both mortgages)?

What is the rental yield and it it worth it for the level of risk you are taking?

joebob

we were thinking of using letting agent in case of bad tennants etc my son is wanting to come in 50/50 which would make void time manageable. we are thinking of a long term investment. i know the profits would be halved but hopefully the risk would be.

silvercar

letting agent fees are usually 10% for unmanaged, 15% for managed.

you can claim tax relief, upto the value of the property, on all the interest payments on money you borrow for the purpose of letting. Where, or even if, you have the money secured is not relevent provided you can show that the money was taken for the purposes of your letting business. mortgages, unsecured loans etc all qualify.

Conrad

BUY LOW SELL HIGH... thats what us investors do.
We dont BUY HIGH AND HOPE FOR THE BEST.

Dont know any canny investors adding to UK B2L stock now, only tail end Charlies and people who are unable to compare investment total returns.

hornetgirl

15% seems high. We were paying 10% for managed, but got rid of the agent about a year ago as they didn't provide a great service (to either us or our tenants).