advice on buying to let

AlexErabon

I will try to make this as short as I can,
Firstly a quick bit of info about me, I'm 24 married an in the Raf we live in a married quarter an have no debts.

Now for what I'm on here for well my parents own a second property and are looking to start putting it up for sale Jan 2014. I had the thought of buying this property to then rent it out as I'm happy staying in quarters untill I leave the Raf but want to invest my money into something for when I intend on leaving the Raf.

The house is £120k I will be looking at getting a 100k mortgage with my parents putting the additional 20k back into the property having a 1/6 investment this is to cover the deposit side. I have looked at similar 3bed houses in the area an there going for 550- 600per month to rent.
What I am wondering is Will there be much of a saving buying from family I know I will still have to have a survey done for mortgage purposes. Would it be best to go with a letting agency to reduce the risks an increase the chance of getting a tenant quicker.

Is there any problems people see I will have or anything I am overlooking it's still very early days so still looking into everything.
Thanks for any advice an help given

Werdnal

There is a good newbie LL post here:

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

which should answer many of your questions. Sit back with a coffee and read it thoroughly, and all the links it contains, then if you have an further specific questions, come back and ask again.

[Deleted User]

As far as I know, most mortgage lenders will not be happy with no personally provided deposit and your parents "gifting" you part of the value for the deposit while retaining an interest, in fact I'm almost certain that will never be allowed.

Don't be tempted to skirt the requirements (full survey etc.) just because it's family, you never know what might be wrong with the place. You'll need to talk to a mortgage broker or a mortgage advisor to get an idea if the mortgage you want is possible, I suspect it isn't.

kingstreet

You can buy a property and let it using a residential mortgage with some lenders as you are in the armed services. Some lenders will allow a "family purchase at undervalue" with some of your parents' equity being used as your deposit, as long as they relinquish all interest in the property.

I'd suggest talking to a broker to ensure you can get a lender prepared to accept both.

Guest101

Also consider that the rent is taxable, you need to consider insurance, safety in the new house, before commiting find out as much info as poss

AlexErabon

Thanks for all help so far so looks like main problem will be fact of deposit. I can put down 5k though wanted it to go into sorting odd bits in the property. This would mean I could look into the 95% mortgage deals I know the local council offer. Only problem is it wouldn't be 5% of total property value.

AlexErabon

Guest101 wrote: »

Also consider that the rent is taxable, you need to consider insurance, safety in the new house, before commiting find out as much info as poss

Yea I never thought about the rent being taxable unroll I read it on the linked thread given on one of the posts above. I'm still trying to learn everything as definitely want to know more before I even speak to my bank about it. At least I have fair few months to think things through and find everything out.
There's nothing stopping me from letting them sell an I just look for something smaller or similar size at the end of next year when I have the bigger deposit needed to buy alone.