buy to let mortgage

morgan78_2

me and friend are looking to buy a repossed house, few quick questions if we do a quick refurb and put straight on the market will we have a normal mortgage or buy to let, also if we do rent it out and then get it valued can we take the equity out and use it for another project

CloudCuckooLand

I'm sure your comprehensive business plan, that was drawn up in deciding to begin such a venture, will have the answers you need.

morgan78_2

look i asked 2 questions if u gonna try and be sarcy keep ya comments to yaself

somethingcorporate

morgan78 wrote: »

look i asked 2 questions if u gonna try and be sarcy keep ya comments to yaself

You're about 5 years too late for doing such a scheme. House prices are stagnant so unless you can add a lot of value very cheaply (by doing everything yourself) you're unlikely to make any profit.

Given there are about 70 houses on the market for every buyer now is not a good time to be doing it. People that have done well out of it in the past have had the perfect conditions of rapidly rising house values to assist in them making a buck or two out of it.

morgan78_2

the ones we are looking at have got profit in them and the area we live rental market is very good and we can do most of the work ourselves and my dad who is a buildercan do the rest

somethingcorporate

If you can afford to tie your capital up and are happy to sit and wait in a slow selling market (but a very good rental market) and you can do all the value add stuff cheaply then go for it!

morgan78_2

yes we are happy to tie the money in thanks for your replys and does anyone have answers to my original questions

thanks in advance

TonyMMM

1) Mortgage ... you will need a suitable deposit (10-15% at least) , and income to support the amount you are looking to borrow, if you are going to let the property it will need to be a BTL (which will probably require a bigger deposit, and a level of cover of rent over mortage repayments.) . You will need all the legal bits and pieces to go with being a landlord ....tenancy agreements, gas certificates etc.

2) You could only get the equity out by remortgaging to the new value (if it has increased at all) ...but the above would still apply ... very unlikely to get the LTV high enough to get much equity out (when accounting for the costs involved) ?

CloudCuckooLand made a valid point in post 2 when asking about your business plan (which should have all these costs covered and acounted for ?).

You are a few years too late for this to make much sense ....