advice on hopefully 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

Leon_W

Bad plan. Total over exposure to the property market IMO.

10% fall in property prices and you are wiped out completely. Better to take it steady and build equity slowly.

Southend1

+1 I wouldn't do it. Too much exposure. Also you will get a much better mortgage rate with a bigger deposit.

new_home_owner_3

you could do it, but if it was me i would look at 2 properties 100,000 pound each, i would put 25000 down on each, then you would get a decent low residential rate and if you fix for 5 years you would be quite secure.

say for example you take a 5 year fixed mortgage at 2.99% interest only, your monthly payments would be £218 a month, that is with no arrangement fee.

to get consent to let you need to at least make 125% on the mortgage, by me you can pick a house up for under 100,000 pounds and get rent of about £550 per calender month.

In my opinion 2 houses at 200,000 pound each, does not give you enough money to get a decent mortgage rate, and the margins are too risky.

Brighty

Also, to get consent to let on the 1st property, most lenders will require the rent covers the mortgage +25% or so. You'd need to make sure the potential rent is enough to cover the payments on a 180k motgage, or you'll never get consent, could be tight depending on rental yields in your area.

Brighty

Simon_gloster

And do all lenders give consent above 75% LTV.......you'll be disappointed as some won't.

keon

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

When the price fell we found we couldn't sell our property so decided to rent untill the property market picked up. Big mistake. The tennant we have is a nightmare dispite not paying any rent since novemeber and being served noitce to quit he still hasn't left. We are now having to go through very expensive court case to get him exvicted which can take up to 9 months with no revenue coming in to pay the mortgage.

gary5000

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!
its such a tough choice. The property will be in the london/surrey area so will have quite a high rental return.
I just want to be sure i spend my £50,000 in the best way possible for my future - any one else got any ideas?
Thanks for all your help - any more advice much appreciated!

Thrugelmir

Have you started a pension yet ?

Building_Surveyor

dont think you've mentioned your income yet so impossible to see whether your plan is even affordable!

gary5000

im self employed books show around £50,000 each year. I have no pension like most self employed people now a days. The idea of the investement flat will work as a pension in the long run.