Buying buy to let in retirement?

stagey_2

We are 67 years of age with modest pensions. Mortgage done and dusted and property worth about £250k. It has been muted by others that we would be in a good position to do buy to let and get a better income via rental - buy I'm not really sure how that would work. I presume we would have to remortgage our own property and pay back the loan from the rental income so not convinced that there would be that much left over to live on anyway - perhaps somewhere with knowledge about the pro's and con's could enlighten?

Many thanks

Werdnal

Excellent starting point for newbie LLs here:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

stagey_2

Hi thanks Werdnal - yes I have seen this already and understand the legal requirements but it's more the actual way of going about getting a buy to let, mortgage issues when you are 67, rent paying enough after repayment of the loan to make it worthwhile etc - this might be a too simplistic view but from where we are at our age with a modest pension and savings I'm not sure how we would go about it or gain sufficient income to make it worthwhile. Hope that makes sense. thanks again

theartfullodger

Mortgage as b2l increasingly difficult the older you get (I'm 64) but available, maybe higher interest rates. Might be better to remortgage your home for financing the b2l - still eligible for tax relief if raised for b2l purposes I believe.

ONLY let property if you can financially & emotionally cope with (say) 7 months of tenant-from-hell (or agent)who doesn't pay rent whilst you pay mortgage & legal fees to sort out & repairs .. yes, repairs still required even if no rent paid.

stagey_2

Yes - that is one of the things I would be thinking about- stresses.

Can anyone say how long we could get a mortgage for I believe there are buy to let mortgages for older people now. So say we managed to get a 15 year deal (that would make us 82!) on say a £160000 mortgage with a 25% deposit taking some equity from our current mortgage free house (value approx £250k) and some saving. How much rental income would I need to realise to ensure some personal income for ourselves as that would be the point of the exercise - I do not think property prices are going to rise at all in the next 10 years or so so no point buying to sell on later.

Or is it better to remortgage our house for the full amount?

I can't help feeling the rent we would need to cover income for selves plus LL obligations + mortgage would be prohibitive.

Thrugelmir

Is downsizing an option? Release some equity to invest and provide some additional income.

BTL should be as a business not an investment.

In business the rewards can be very good but the losses if incurred can be devastating.

With an investment you only lose your initial stake.

Itismehonest

stagey wrote: »

I can't help feeling the rent we would need to cover income for selves plus LL obligations + mortgage would be prohibitive.

I would think long & hard before taking the plunge, stagey. At the moment you have no mortgage & only your own home to cover for upkeep.
While most tenants are good, many are not. The figure for upkeep of the rental property can often be higher than many new landlords realise.

Would you be paying an agent to deal with everything for you or would you be doing this yourself? The first costs money & you need an agency you can trust. The second means you may be on call day & night for any problems.

As Thrugelmir said, BTL is a business. You'd be 'working' well into your retirement years & could find that any benefit is outweighed by the restrictions placed on 'doing your own thing' in later life.

G_M

BTL mortgages are easier than residential as you get older.

The main criteria is that rental income covers the mortgage, usually now I think by at least 125%. And of course you'll only get around 75% of the valuation.

On a residential mortgage they are more interested in YOU, not the business, ie your income, your age etc

stagey_2

Itismehonest wrote: »

I would think long & hard before taking the plunge, stagey. At the moment you have no mortgage & only your own home to cover for upkeep.
While most tenants are good, many are not. The figure for upkeep of the rental property can often be higher than many new landlords realise.

Would you be paying an agent to deal with everything for you or would you be doing this yourself? The first costs money & you need an agency you can trust. The second means you may be on call day & night for any problems.

As Thrugelmir said, BTL is a business. You'd be 'working' well into your retirement years & could find that any benefit is outweighed by the restrictions placed on 'doing your own thing' in later life.

Thanks for everyone's input - this is what I feel actually - I am still working but that wouldn't count for loan as might not be next year- just think with modest income with a modest value home we really wouldn't be gaining very much or anything at all at our age - but could be gaining lots of hastle - I was fairly sure it was not something we would do but wondered whether I was missing a trick somewhere but from my own research and everyone's replies here I don't think I am!

thanks to you all again.