We have £23K equity - would we still be made to buy a buy to let property?

Romani_Ite_Domum

voucherqueen wrote: »

JoeK

It just worries me paying out that much on a mortgage every month but I can see that the end goal would be worth it.

We have two children who are 8 and 12 so I don't want every penny going towards a mortgage.

Would it worthwhile upgrading to another house and put £80K on the mortgage?

But I do worry about their future and think we should be doing something now to try and get another house as we have so much equity. I always thought you only did it if the rental payments covered the BTL mortgage but we know someone who bought 6 years ago and he is only managing this.

I think if we had £50K cash we would definitely do it but we haven't.

I really don't know whether it's worth it as we would have 20 years of paying a £50K mortgage to get another property, worth around £130K at the moment. I don't know whether all the figures balance out. I think I need to look into everything in more detail as I am not sure about pitfalls.

Looks like you have a very balanced approach to this. Good luck.

margaretclare

voucherqueen wrote: »

So tecnically we would end up with another property that was completely ours in 25 years and we would get a retirement income from it but we would have had to pay out approx £400 a month mortgage on it (the £50K we released from our property)

Would we be mad to do this? I have been thinking about it for a couple of years now but my husband thinks we have definitely missed the boat.

We have around £900 spare at the moment which is going into cash savings, ISAs and pensions but all the returns are rubbish. Maybe we should just stick to this and not risk anything?

Maybe the above sounds completely stupid but I would welcome any views - how does anyone make a BTL pay these days?

Well, we're a pair of retired wrinklies, we're still saving and our returns are anything but 'rubbish'. My funds-based equity ISA is the very opposite of 'rubbish' - it's doing very nicely thank you.

I think what a lot of people fail to take into account in jumping on the BTL bandwagon is the amount of work it will involve. It's not just a matter of putting money into it and sitting back waiting for it to grow, like Jack and the Beanstalk's beans! You're a landlord, you have to get involved with tenants, the property needs repair and maintenance and all that is your responsibility! You have a family to bring up - will you really have the time to rush off every time the tenant complains of a blocked loo or whatever?

Not all pension plans are 'rubbish' any more than savings are rubbish.

Margaret

kingkano

sortofok wrote: »

Voucherqueen -at this point in time your husband is right you have missed the boat as regards buying a property for investment. But all not lost as regards a comfortable retirement.
From your figures and your timescale of 25 years I would say that you are in a good position to make serious gains in other markets which would outperform property. Have a look over on the savings and investments thread for starters.
As I have said on previous thread - "the times they are a-changing"

If you do go ahead with the property good luck. But remember there'll be another boat arriving before you retire.

Because of course none of these markets will be affected by a massive house price crash, they'll boom even higher won't they? :rolleyes:

dunstonh

We have around £900 spare at the moment which is going into cash savings, ISAs and pensions but all the returns are rubbish. Maybe we should just stick to this and not risk anything?

ISAs and pensions are not rubbish. Investment funds could easily have doubled your money over the last 7 years (so that includes the crash period).

If you think that funds are rubbish, then it suggests you are not researching the subject much and you are probably not best suited to buy to let either. That needs just as much research.

ginger_nuts

JoeK wrote: »

Here is another angle.

Why not move and buy another house in the best area for say £150,000 more than your current property.

£150,000 x 6% = £750pm interest only

Take out an interest only mortgage until your retirement date and then sell the property, step down and take the profit tax free.


JoeK

doing this any profit would be tax free

btloptingout

porridge wrote: »

Many of the doom and gloom mongers have been saying this for years and years!!,

Do you drive through town only looking in the rear view mirror?

Pundits were claiming an imminent crash in '27, '28.....they were of course wrong as it didn't happen till late '29. Those pundits missed out on 2 excellent years of further growth.

With any bubble there's those who call the top too early, and those that call the top too late......The consequences for the later are far worse than the former.

IMHO I couldn't think of a worse investment at the moment than getting into UK BTL.

sortofok

Well said that man:beer:

meanmachine_2

voucherqueen wrote: »

But I do worry about their future and think we should be doing something now to try and get another house as we have so much equity. .

Worry more about how on earth your kids will afford their own property if people like you keep thinking they NEED a house when they already have one.

As others have pointed out, you must research all investment vehicles.

Don't just do something because someone else has done it.

Would you follow them across a busy motorway if they did it and happened to survive?

phlash

I have to say this thread made me angry on two counts...

1) Pushing FTB's out of the market.

2) The belief that the housing market still has room to grow as it has in the last decade.

Just a small amount of research, would leave you with the conclusion that the market conditions for BTL are just insanely risky. A highly geared investment can be very rewarding, but get involved at the wrong time, and it will cost you a decade!

BTman

meanmachine wrote: »

Worry more about how on earth your kids will afford their own property if people like you keep thinking they NEED a house when they already have one.

Well said !!