Struggling to wrap my head around Buy to Let

Gaaraz

vectistim wrote: »

All mine are on repayment - that means that my LTV is now down to around a third. Doubtless I could have bought more sticking with interest only and leveraging everything as much as possible but that is a much riskier strategy.

Thank you - that is probably the route I would go too... costs more in the short term, but at least you'd have relative peace of mind as long as you budget so you can easily cover the payments.

And thanks to both Thrugelmir and geoffky for the warnings... to be honest I am starting to worry if I'm getting in a bit over my head here, and I think it's also easy to underestimate the risks and hassle involved (letting agents, maintenance, insurance, tax returns, capital gains etc) and I am genuinely surprised that you need to pay income tax on the full rental amount less interest (ie the mortgage repayment itself isn't tax deductable) and then throw in capital gains on top... one does wonder if just a regular investment fund is a better option.

My ultimate goal is early retirement though - I just feel like ~£300k worth of property (say, 3 houses returning £550p/m) would be a better source of income than just £300k returning interest in an account. Saying that, this is probably 20 plus years away for me, so a lot can change in that time of course.

Gaaraz

Tempted to pop into the estate agent next week and ask for advice, what kind of property they'd recommend etc and if BTL is actually right for me - though they're probably not the most impartial people to ask eh!

G_M

Gaaraz wrote: »

Tempted to pop into the estate agent next week and ask for advice, what kind of property they'd recommend etc and if BTL is actually right for me - though they're probably not the most impartial people to ask eh!

"Of course it's a good investment Mr Gaaraz -in fact we have a couple of ideal properties on our books at the moment which are very reasonably priced. Why don't you take a look? They are both desirable rentalproperties which will be in great demand from tenants. Certain to be snapped up so no need to worry about them standing empty.

And once the property market recovers and prices rise, the increase in value will make any tax issues irrelevant. You'll be building up a nice retirement fund.

And we'll take care of all the management side of things for you so your own involvement will be minimal.!

:rotfl::rotfl::rotfl::rotfl:

vectistim

G_M wrote: »

"Of course it's a good investment Mr Gaaraz -in fact we have a couple of ideal properties on our books at the moment which are very reasonably priced. Why don't you take a look? They are both desirable rentalproperties which will be in great demand from tenants. Certain to be snapped up so no need to worry about them standing empty.

And we'll take care of all the management side of things for you so your own involvement will be minimal.!

:rotfl::rotfl::rotfl::rotfl:

A competent agent that does both sales and lettings should do this (and mean it) - if they're offering a lettings service then it's in their interest to sell you something that rents out easily. (2 to 3 years of lettings fees will be about the same as the fee for a sale

For me that means two bed terraced cottages in the right place, your market may be slightly different.