Letting a Second Property

Orange_King

A small bungalow has come on the market close by us that would appear a great investment and potentially a smaller home for me and Orange Queen in later life.

The house is clearly in need of a lot of work but it is a repossession and is available at a decent price. We don't currently have a mortgage and I think it would be within our means to initially pay a mortgage, get it fixed up to a decent standard and then let the property.

I haven't sought any advice at this point but will be doing so but hope that some of our MSE folk can point out what the pitfalls might be in this plan, including what implications there are for having an income from this.

Grateful for any advice offered. :beer:

Fire_Fox

Have you run an advanced search? There are numerous excellent threads/ posts on the pitfalls and implications of buying repossessions and buying to let. Both are massive subjects, not something that can easily be addressed in one brief post.

Do you have a substantial deposit and mortgage in principle? Are you able to proceed swiftly? Do you have funds for the renovations and mortgage payments during the works? Who are you doing this up for, tenants or you? What is your target market? Have you factored in taxes? What would happen if you fall ill or injured and cannot work, made redundant or split up, tenant does not pay rent or trashes the place, could you pay rent and mortgage without means tested benefits?

Annisele

Fire Fox is right; there are a *huge* number of potential pitfalls, and it isn't really possible to list all of them in one go. Can you give us more of a clue about what you're wanting help with?

There's the "setting up as a landlord" thing, the "buying a repo" thing, the "getting a mortgage on a house that needs a lot of work doing on it" thing, "getting a mortgage at all", "tax", etc etc.

Werdnal

Good starting point here:

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

Read, learn and inwardly digest!

G_M

And as the link above points out, there are whole books devoted to both subjects:
* property renovation
* property letting

Nip down to your library and borrow some books.

By all means come back here with specific questions once you've researched both topics.