mortgage free and wanting to invest in buy to let properties.

bigmark39

Hi all, I own my own home outright and was wanting to in invest in buy to let properties, using my own home as collateral to raise money to pay deposits on a few auction properties, which I would then mortgage on interest only terms over 20 years.
Has anyone been in a similar position and can offer some pointers or guidance?

Any suggestions appreciated.
Thanks
Mark

BitterAndTwisted

Depends on the value of the property/ies you are considering buying and the expected rental-income. Have you put together a business plan? Understand completely what your responsibilities would be as a landlord? Understand how you could be putting the roof over your own head at risk?

brit1234

My advice is don't do it till house prices have stopped falling as you risk losing equity in both during the falls. Better to do it when the market stabilises. After all buy to let represents the biggest section of repossessions at the moment because of above gearing thing.

bigmark39

surely it's better to invest when values are low?
Rents are always more stable than house prices, it seems to me anyway.
I would be looking to buy properties in the 40-65k bracket, 2 bed terrace type properties in the midlands or north of England.

tomatoe_2

He who dares wins Rodders. If you can find a lender willing to help you, that will be a start.

Sandie11

If youre in for the long term then a great idea.

Coventry BS and and Skipton seem to be offering good rates.

Thefunkygibbons

What other investments do you have?

It is only a personal view, but I think property is a poor investment because it has running costs, legal responsibilities, tenant issues, high dealing costs and can be difficult to exit in a hurry

However, it appeals to some people because it is possible to borrow, and therefore leverage any gains on the upside. However, that leverage works against you on the downside

I would not borrow to invest in shares, which do not have the issues mentioned above, so cannot understand why I would do so for property

SuzieSue

I think it also depends on your pesonality. If dealing with problem tenants wouldn't faze you then it is worth considering.

I am also mortgage free and could do what you are thinking of doing, but for me the stress of managing a BTL isn't worth the extra reward (assuming of course, there is one, after all the costs involved and the possibility of house prices falling).

quatro

Mortgage free too, I have also thought about this over and over and decided against it.
There is too much risk: letting agent not vetting tenants thoroughly, the property may be left empty for periods of time therefore no income.
Too much hassle: dealing with the Inland revenue/accountant, maybe having to get poor tenants out.
Money too tied up: being in debt which could rise, potential expense to keep property and items like boiler up together.
No access to funds: the property would need to be sold which could take ages, be fraught with chain problems, people pulling out etc. A lengthy and expensive process.
Too much responsibility, in short.

Most of the above have happened to people I know who have let out property - it happened, fact, not me being negative.

However that is me, I don't have the personality for it instead getting a good income from tieing my money up in long term bonds [but which I can access quickly by paying a penalty if needed] - and gives me not much less than buying and renting out a property would give me after taking into accounts expenses involved.

Good luck to those who can do it, but I can't risk my health or peace of mind. No money is worth that.

SuzieSue

quatro wrote: »

Good luck to those who can do it, but I can't risk my health or peace of mind. No money is worth that.

I agree with you completely. Everyone is different, but I am happy with my lot and although the idea of building a property empire is appealing, the practicalities aren't.

Some of my friends have BTLs and they have had their fair share of ups and downs (one found that her house had been turned in to a cannibis factory and another's tenants left leaving £5,000 worth of damage).

tomatoe_2

SuzieSue wrote: »

I agree with you completely. Everyone is different, but I am happy with my lot

good for you, me too. After all there is no point being the richest person in the graveyard. I'm spending what I've made on a house slowly but surely so I depart the earth with nothing but a smile to my name.