How do you buy more than one property?

plarka

How do people do this? Is it only people who have a really high income? Is it possible for us poor people? We own a 2 bed ex-council flat. We live within our means, on dh's salary. I make £500 a month in my small business. Our mortgage is probably about £90,000 now (well, it was £95,000 5 years ago, I hope it's gone down!), and my husband went to the bank the other day and they said we could borrow £140,000. So we can only afford to sell this and buy a house in crappy area, or a 2 bed NON council flat.

I'm thinking, there must be a way for us to find out some smart things to do, that these big property owners do. Or are they just lucky and inherit money or something? Is it possible for regular poor people like us? How do you buy a second property?

[Deleted User]

Rent a room out, use that income towards the deposit on another property.. i know a couple that are onto their 3rd flat doing it that way.

If you can only borrow 140k then your combined salary can't be too high. Generally you'd need more income to be able to buy multiple properties

RAS

Start by using the rent a room allowance to earn tax-free money.

Your current income is so low that it is not even utilising your full tax allowance, so think about part-time work or even a full-time job.

plarka

Bummer. We can't rent out a room because we only have 2 bedrooms, and there are 2 adults and 2 children already! My husband makes £26,000/yr. I make the £500/mo and homeschool our kids, so I can't work more but am growing my business. I'm trying to get my husband to get another or a new job. He says there aren't any. He did mention cleaning ovens though....it's the upcoming thing I guess!

SIGH. Is it impossible for us then?

Thrugelmir

plarka wrote: »

SIGH. Is it impossible for us then?

Count the pennies and overpay the mortgage. Hard work and sacrifice.

G_M

Move the kids in with you for a while?
Move to a 3 bed property?

You need to free up some cash to use as a deposit for the 1st property. Once that is earning, you have a chance to expand if all goes well.

marathonic

Agree with Thrugelmir.....

Minimise expenses and overpay the mortgage. As you drop to lower LTV's, remortgage to better rates allowing you to overpay the mortgage by higher amounts.

When the mortgage is low enough to allow you to upgrade to a 3-bedroom house, move and rent-a-room. Continue to overpay the mortgage.

When the mortgage is low enough to remortgage for a deposit for a rental property, remortgage and buy a rental property. Given you've paid a 25% deposit, the rental property should look after itself (otherwise, it's probably not a good investment).

Continue to overpay your own mortgage. As rents rise with inflation, your rent on your second property will provide you with an increasing source of income allowing you to make bigger overpayments on your home mortgage.

Rinse and repeat... In theory, it should get easier each time as you've got more and more income coming from multiple properties.

As the old saying goes, "the first million is the hardest"

Brodiebobs

We have just purchased another property, we had saved a 10% deposit and because rent on the old place coveredu the mortgage 125% (mostly as we have overpaid over the last few years) it was disregarded by Halifax and we were able to by a place for £130k. And we earn what your husband does between two of us!!