Buying To Let

Tayus

Hi everyone,
I've been to look around a property today which i really like the look of, it's a 1 bedroom house and is really small but im looking to rent it out so size does not matter to me. It has all the amenities you would need virtually on its doorstep, shop, pub, bus stop and the train station is about a ten minute bus ride away. How much deposit is generally needed for a buy to let mortgage and what other fees are included? this house is up for sale for £80,000. (plus does any1 have any idea how much the payments would be on the mortgage?)

dunstonh

15% deposit with rent covering mortgage (although the latter is getting harder with rising interest rates).

Go to a mortgage provider website and use their calculator for guidance.

Don't forget to deduct tax, management company and allow for gas/electric checks as well as dead periods and damage/maintenance in your figures.

deary65

This is an interesting artical:

http://money.uk.msn.com/Mortgages/BuyToLet/article.aspx?cp-documentid=2617316

dfdemello

Hi deary65,

Interesting article but I guess it all comes down how long you are prepared to keep your buy to let property and whether you are in it for the long or short term. I am in it for the long term and watching the Pensions programme this week really made me sit up and think about the future. I do think some sort of correction must be on the way since first time buyers have no chance (probably linked to the increased btl market) of getting a toe-hold on the ladder.

dunstonh

I am in it for the long term and watching the Pensions programme this week really made me sit up and think about the future.

The pensions programme was a disgrace by all accounts. A mortgaged buy to let is higher risk than a modern day personal pension so its a bit hard to compare like for like.

When we talk long term with property, you have to be looking at 15-20 years. Remember that some of that those that suffered in the early 90s property crash only returned to a positive position a few years back.

MickKnipfler

I find it a bit worrying now that even buyers are allowing for a drop in property prices by saying "I'm in it for the long term so it doesn't matter"

Generali

MickKnipfler wrote:

I find it a bit worrying now that even buyers are allowing for a drop in property prices by saying "I'm in it for the long term so it doesn't matter"

Better that than "House prices only ever go up". At least it shows a realistic approach to an investment. I would hope an investor would say the same thing about bonds, equities or pork belly futures.

Doozergirl

OP, if you are looking at this as an investment, then you should be doing your sums before viewing any houses at all.

At the very least you need to be able to compare asking price to potential rent to mortgage repayment. If you're being sensible, it shouldn't be anywhere near as emotive as buying your own home.

liz545

Work out what rent you'd need to charge to cover the mortgage and other associated costs, then go and view other rental properties in the area around the same price. Saying "it doesn't matter that it's small, as I'll rent it out" doesn't really hold true if the local rental market is flooded with inexpensive large, nice flats. So do your sums and research the local area, from a renter's point of view.

MickKnipfler

Generali wrote:

Better that than "House prices only ever go up". At least it shows a realistic approach to an investment. I would hope an investor would say the same thing about bonds, equities or pork belly futures.

I wouldn't argue with that. I just wonder if their investment falls appreciably, whether they would feel comfortable that they bought when they did.

mark_casey

in it for the long term means something very differnt to me with buy to let
it means for life as i never want to pay capital gains tax by selling a property i want the mugs who lent me the money to cry