first steps to becoming a landlord!

gary5000

I'm currently renting am and 27 years old. I have saved £50,000.
I wish to buy somewhere to live and get myself an investment property.
I would like some advice on how to best wisely spend my money - and if possible to get two properties!
My plan at the moment is to buy a property with 10% deposit after 6 months ask for consent to let. At this stage i will let out this property.
Then purchase myself a property using again 10% deposit.
On the basis both properties are £200,000 that would be £40,000 on deposits and leaving me £10,000 for fees etc.
Any opinions on this would be really appreciated and if it sounds like a good plan or not! Thanks

ILW

What do you earn?

Annisele

gary5000 wrote: »

My plan at the moment is to buy a property with 10% deposit after 6 months ask for consent to let.

You might not get consent to let after six months, especially if your circumstances haven't changed. If the lender thinks you took a residential mortgage with the intention of letting it out asap, they'll probably want you to go onto buy to let rather than consent to let terms.

Apart from that, it sounds a fairly risky plan to me. Highly geared and concentrated in one asset class - could go badly wrong!

Edit: Duplicate thread - more responses on the other board.

gary5000

i'm self employed and my books show i earn around £50,000 a year after tax.....does this affect anything?
I gathered its a risky plan - but its either that or put all my money into a house which i don't really feel i'm ready for being a single young man!
If i go for all the money on the house i just feel it will take such a long time to save another large sum of deposit!
Thanks for all your help - any more advice much appreciated!

Fire_Fox

gary5000 wrote: »

I'm currently renting am and 27 years old. I have saved £50,000.
I wish to buy somewhere to live and get myself an investment property.
I would like some advice on how to best wisely spend my money - and if possible to get two properties!
My plan at the moment is to buy a property with 10% deposit after 6 months ask for consent to let. At this stage i will let out this property.
Then purchase myself a property using again 10% deposit.
On the basis both properties are £200,000 that would be £40,000 on deposits and leaving me £10,000 for fees etc.
Any opinions on this would be really appreciated and if it sounds like a good plan or not! Thanks

So where are the savings for paying two mortgages if you fall ill or injured and cannot work, your business goes under unexpectedly? What if your tenants don't pay rent and it takes you months to evict through the courts, what if they trash the rental property? What if there is a major flood, fire or heating system breakdown at either property? If you buy leasehold flats you can get stuck with bills for major works with as little as six months notice, these can run to thousands and you are contractually bound to contribute. You need a float for any one of these surprises.

Being self employed puts you at greater risk if something goes wrong, you don't pay regular NI so are not eligible for many contributions based benefits.

Asking for CTL after just six months will ring alarm bells, lenders can work out you always wanted BTL so will likely only offer you this. Have you considered just buying one property larger than you need and letting a room tax free under the 'rent a room' scheme? Doesn't have to be a house: there are penthouse and large duplex flats with two bathrooms, so you would not be tripping over a lodger.

lr1277

gary5000 wrote: »

i'm self employed and my books show i earn around £50,000 a year after tax.....does this affect anything?
I gathered its a risky plan - but its either that or put all my money into a house which i don't really feel i'm ready for being a single young man!
If i go for all the money on the house i just feel it will take such a long time to save another large sum of deposit!
Thanks for all your help - any more advice much appreciated!

Have you checked you can get a residential mortgage? Some lenders require to see your books going back a few years. Not sure how many though.
Some BTL mortgages just look at the prospective income from the property not your income (and I am assuming job type).

Cash-Cow_3

Seems a very high risk strategy.