Buying our first house so why would we rent it out?

jojoba2k

I'm after a bit of advice about house buying and renting, as I'm not very knowledgable on the area! My boyfriend and I currently rent a mid terraced property but eventually we obviously want tostop renting and buy a house. Recently the house next door to us went up for sale for a really low price and my boyfriend wanted to buy it. We hadn't even discussed buying a house so it wasn't something that I was going to rush into doing. We ended up having a massive arguement about it as my boyfriend seems to have a very different view on buying a house to what I have.

Personally, if I'm going to buy a house I want to move in and make it my home, even if we don't live there that long and end up moving. Seems a perfectly reasonable don't you think? But my boyfriend has the idea that we should buy a house, do it up a bit and then rent it out - whilst we continue paying rent in our current house! Please can someone tell me how that is a good idea as to me it seems ridiculous?! He also thinks that the process of buying/selling houses is fairly easy, so if we bought somewhere and needed to sell and buy something else in a couple of years it would be really simple to sell and buy.

He's basically said that he's right and I'm in cloud cuckoo land! Could anyone give me a bit of advice here? I don't necessarily think he's wrong but it annoys me that he has no clue about the housing market but seems to think he's the worlds expect on in! :mad:

Thank you!

[Deleted User]

Ask your boyfriend if he can afford to pay the rent AND the house mortgage at the same time, for 3 months - because that's what could easily happen.

Buying and Selling a house (at the same time) is one of the most stressful experiences I've ever been through...

DRP

The financial decision would be based on how 'really low' the price of next door sells for.

If the asking price is 'really low' there is a fair chance there will be competition to buy it and the selling place will be a lot more...

lincroft1710

I think "cloud cuckoo land" is where your boyfriend resides rather than you.

jojoba2k

The house has now sold and we never really properly talked about buying it (basically because I don't want the stress of it all at the moment!) but he was talking about being able to rent it out for around £75 a month more than what we pay rent at the moment... for what is the exact same house! I just can't seem to get into his head that buying a house is not as simple as he thinks, and that it is a stupid idea to contemplate not moving into it.

CLAPTON

people do buy houses to let out with a view to making a profit


however it all depends upon the money


how much is the house?
how much can you rent it out for
how much deposit does he have
how much does he earn

hazyjo

Does he not realise that there's maintenance with a house? Expenses as a landlord? Possibly the necessity to switch to a BTL mortgage that would mean higher rates? £75pm won't go far if there are unforeseen expenses, rent voids, or if a tenant trashes it/doesn't pay!

Buying and selling can be VERY stressful (got the tee-shirt several times over!).

I have similar near-arguments with my mum lol. She's 68 but thinks she's still around 40. Since losing my dad last year, she's been talking about buying a bit of a wreck to 'do up' and rent out. Honestly, I've tried being calm, spelling things out in b&w to her, and explaining the downsides, but I do have a horrible niggly feeling she'll either blame me for her 'not fulfilling her dream' or for being so negative about it all. Oh, and she thinks she'll get a mortgage...

Do you have enough saved for a deposit and fees?!

Jx

monty-doggy

Does he realise that unless you already have a mortgage for the house you are living in, there is not really a chance you can get a BTL mortgage? Most lenders will insist you have your own home mortgaged/owned outright first.

DRP

hazyjo wrote: »

Does he not realise that there's maintenance with a house? Expenses as a landlord? Possibly the necessity to switch to a BTL mortgage that would mean higher rates? £75pm won't go far if there are unforeseen expenses, rent voids, or if a tenant trashes it/doesn't pay!

Buying and selling can be VERY stressful (got the tee-shirt several times over!).

I have similar near-arguments with my mum lol. She's 68 but thinks she's still around 40. Since losing my dad last year, she's been talking about buying a bit of a wreck to 'do up' and rent out. Honestly, I've tried being calm, spelling things out in b&w to her, and explaining the downsides, but I do have a horrible niggly feeling she'll either blame me for her 'not fulfilling her dream' or for being so negative about it all. Oh, and she thinks she'll get a mortgage...

Do you have enough saved for a deposit and fees?!

Jx

and maybe for a new roof in the first few weeks after you buy the place?

This is exactly that happened to the house opposite us: a BTL LL bought the place off a 'lovely' family who had been there for 5 years or so.

Within a few weeks they had to replace the roof, front and back doors and get the electrics done...:money::eek:

AndyPK

if you rent a house out there are tax forms to do every year.

A whole load of hassle.

Werdnal

If you were buying with the intention to let, or the lender suspected you were, they would insist on a BTL mortgage - can your boyfriend afford 25% deposit as a FTB?

There are also lots of costs, legal implications, tax issues and regulations to abide by when you become a landlord:

Read this for the beginners guide:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

Sounds like he is seeing the ££££ signs in the rent coming in, but doesn't have the first clue that so much of that can be swallowed up in tax payments, bad tenants, gas safety certificates, repairs, maintenance, insurance etc. It is not guaranteed income by any means.

Your boyfriend is talking out of his backside - as many who think landlords just sit back and rake in the money do ... after 13 years of letting property I can honestly tell you that is far from the truth!