Possible to buy-to-let with only 60k / no mortgage

tbs624

RAS wrote: »

Most of West Yorkshire would have lots in your range. Avoiding student apartments, you would still pick up stuff in the £35-45K range and have enough to refurbish.

See http://www.rightmove.co.uk/property-for-sale/property-41122811.html

or

http://www.rightmove.co.uk/property-for-sale/property-38599990.html

Salubrious part of Leeds there RAS There are reasons the prices are that low..........

RAS

tbs624 wrote: »

Salubrious part of Leeds there RAS There are reasons the prices are that low..........

I know, but that gives a clue as to what is possible. I have walked through both areas in the last year. Day-time though! And its not Halton Moor or the worse parts of Gipton.

Actually the flat location is probably the better of the two; some of that is coming up as people who cannot afford the posher bits decide to get more space for their bucks.

quotememiserable

I've properties in Burnley, I can get a 2 bed terrace 'on the road' for about £40k that will yield £330pcm. Usually I'd aim to pay 30-35 plus renovations and expenses = £40k ish. It essential to have someone who knows the area well to be sure you get one which is actually lettable. There are properties up there at £10k £15k (check the property auction people) but they are the dead end properties.
Saying that, I can remember in the late 90s Longsight in manchester was similarly dead end and terraces were priced at £5k and no-one would touch them. All at least £100k now.

geoffky

This thread reminds me of 2006 all over again....What can go wrong?

quotememiserable

geoffky wrote: »

This thread reminds me of 2006 all over again....What can go wrong?

I think the mistake a lot of people made then was buying at the top of the market using discounted borrowed funds. We're not talking about this at all here, we're talking about buying the bottom of the market with cash.

tbs624

ACG wrote: »

TO answer your question though:
North Manchester has areas you can buy for £60k, Blackburn, Bolton do too.

Areas of Manchester are subject to additional and selective licensing - worth checking out in advance.

ACG wrote: »

Parts of Wales and the North East (Sheffield/Rotherham way).

You'd be lucky to get a decent Sheffield property in that price range. Rotherham, maybe.....

I imagine anywhere other than the south east you can get somewhere? Maybe buy a garage in london? :-P[/QUOTE]

geoffky

quotememiserable wrote: »

I think the mistake a lot of people made then was buying at the top of the market using discounted borrowed funds. We're not talking about this at all here, we're talking about buying the bottom of the market with cash.

If you think this is bottom of the market then be my guest.....;)

topperdoggle

Catspajamas wrote:

Have you thought about how you are going to manage it at at a distance.

I am presuming that you have savings other than this £60k as it is not wise to put all of our eggs in one basket, and you will also need extra to cover any repairs etc which will be required.

Are you unable to get a mortgage to increase the value of property you can consider? I am not an expert and I'm sure someone more knowledgable will be along soon but I know it can work out more efficient to put in at least a 25% deposit and have the rest on an interest only mortgage If you can get a decent rate.

AngelsMadv wrote: »

Exactly that - YOu can get a 65% LTV now at around 2.99% on buy-to-let.

This is very interesting. Many posts have mentioned the idea of a mortgage. I was always brought up not to borrow money unless I had to, for obvious reasons. Yet, I had pondered the idea of taking a relatively small mortgage, just to boost my purchasing potential to something nicer, which would be easily covered by rent, and then some, leaving some over for income, and some for repairs etc.

In fact I had considered splitting my deposit into 2 x 30k, and taking two mortgages of 70k each, to buy two properties at a total of 200k. Admin headaches aside, I feel this would be a good spread of my risk, and enable me to build a wider portfolio in the long run.

But there are two things I don't understand:
1. In a scenario when one does not *need* to borrow money to buy a property, how is it better to take a mortgage anyway? Surely the interest on the mortgage is more than the interest on the money in the bank.
2. If one does take a mortgage, why interest only? Doesn't this mean getting to the end of the term and still having to find a big lump sum? I thought this was strictly for buyers who didn't have enough cash or income to pay back a capital + interest mortgage.

If someone could answer these questions, I'd be very grateful.

AngelsMadv wrote: »

I'm just about to embark on a very similar thing all be it with a mortgage. £69K my purchase price for a 3-Bed semi. The area is rough, but the house is lovely and the current owner wants to rent it off me.

I just have to figure now if I can rent a property to a friend and all the pit falls that brings.

Other than that, with 60K you could get a nice mortgage on a buy-to-let in a high student area like Lincoln and make at least 10% on your investment.

Interesting, thanks, I would never have thought about somewhere like Lincoln. Generally I'm a bit torn between targeting young professionals vs students.

As I see it, professionals are:

• Less likely to trash the place
• Don't need a location near the university, and don't want to live in student neighbourhoods
• Looking for higher standard, hence more expensive property
• More interested in great transport links

Whereas students are the opposite.

What would be amazing (too good to be true?) is a town which is small enough where the university is near the town centre, and the students (who preferably aren't too mad) don't live in a specific neighbourhood.

I'll rule Oxford and Cambridge out for my budget.

phoebe1989seb wrote: »

You can get a *bungalow* by the seaside in Jaywick, Essex for under £60k - not sure that it's considered anything other than 'dodgy' though

I had a look on Google and then StreetView. A regeneration area would be great, but "England's most deprived town?" Thanks but I'll pass.

want2bmortgage3

how would it rot in the bank? i know the savings accounts are lower than inflation, but at least it would be safe. if you buy to let you have to consider house prices might go down, tenants might be a nightmare, the house might need repairs, new boiler, tenants might not pay, etc etc plus you have to pay tax on income so many things to think about!!! at least in the bank it wont go down and it's basically stress free?

lessonlearned

want2bmortgage3 wrote: »

how would it rot in the bank? i know the savings accounts are lower than inflation, but at least it would be safe. if you buy to let you have to consider house prices might go down, tenants might be a nightmare, the house might need repairs, new boiler, tenants might not pay, etc etc plus you have to pay tax on income so many things to think about!!! at least in the bank it wont go down and it's basically stress free?

My goodness you are a little ray of sunshine.:rotfl:

Reminds me of the Macedonians who went to war with the Spartans.

Phillip of Macedonia sent a message to the Spartans, offering them terms to surrender.

"If we win this war we will make you slaves forever".

The Spartans declined the terms and sent back the following message.

"If".

Your catalogue of doom and gloom is based on "if".

If houses prices go down, if the tenants are a nightmare, if the house needs repairs, if a new boiler is needed, if the tenant doesn't pay the rent........if, if, if.

Of course income tax has to be paid on rents received. It is income.

There are, of course, a considerable number of perfectly legitimate business expenses that can be offset against the tax bill. Mortgage interest is one of them which is why so many BTL investors opt for interest only mortgages. (You cannot claim tax relief on capital repayments).

Want2be - BTL is a business. All businesses carry a certain level of risk.

With the current pitiful returns £60K is too large a sum of money to simply sit in the bank for any length of time. It needs to be made to work. If not it won't even keep pace with inflation. Now that would be stressful:rotfl: