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Buy to let with mortgage
Skag
Posts: 480 Forumite
Hi,
I am thinking of purchasing a house in Brighton in a well popular student area.
I am after the following plan:
For a house of ~250k to pay 50k upfront and get the rest in mortgage.
The rent will pay off the mortgage (here let's assume that the house is always rented, it's a 5 bed, so let's assume at least 1400pcm).
If the mortgage is getting paid off by the rent, and the mortgage monthly installment is ~1000 - 1100 pcm, then I also get around 300 in pocket (if I want to, so I can have a steady income every month from my investment).
Does this "easy" plan sounds correct? If not, can you please state pitfalls and why?
Thanks
I am thinking of purchasing a house in Brighton in a well popular student area.
I am after the following plan:
For a house of ~250k to pay 50k upfront and get the rest in mortgage.
The rent will pay off the mortgage (here let's assume that the house is always rented, it's a 5 bed, so let's assume at least 1400pcm).
If the mortgage is getting paid off by the rent, and the mortgage monthly installment is ~1000 - 1100 pcm, then I also get around 300 in pocket (if I want to, so I can have a steady income every month from my investment).
Does this "easy" plan sounds correct? If not, can you please state pitfalls and why?
Thanks
0
Comments
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Your tenants don't pay the rent, it takes you 6 months to evict them and they wreck the place on the way out. How much profit then?0
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Let's suppose the following then:
a) It's let by a letting agent (which take their commission etc, which in effect may lower my income or so)
b) It's insured
c) I am renting a second property whereby I have a steady income / I have monies which will cover me on that case.
If you add all this, can you review my initial thought?0 -
You seem to have overlooked maintenance - always a lot more than you expect.0
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I've already got a house which I am renting out and am aware of maintenance costs.0
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What about the HMO regs? And you don't appear to have taken account of the income-tax on the rental-income in your calcs either. Or a possible increase in interest-rates.0
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Seconded. With HMOs there's a lot of things to do such as changing the doors to fire doors etc. And £300 doesn't leave you a lot of room for mortgage interest rate rises.0
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Don't forget the tax payable ..._____________________________________________Mortgage 1 £80k paid off july 2014Mortgage 2 £213k paid off May 20210
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Renting houses is a business. Have you prepared a business plan?0
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Interest rates don't stay at their 300-year low and your mortgage payments go up?poppy100
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agents fees.
income tax
landlords insurance
annual gas certificate
void periods
maintenance
non-paying tenants
utility bills between tenants
etc
et
e0
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