Buying or mortgage?

Soloistas

Sorry DT19, I missed your last post. The house is a 2 bed terrace at 65k but I can't post a link because it is off the market because I put a holding deposit on it while applying for a mortgage.

18k at 22 is good in my opinion and with your entrepreneurial mindset I am sure it won't be long before you are making even more also you may have 220k debt but as long as you are renting the properties out you don't have to worry about that, especially if you keep the money aside for just in case measures. Having 2 properties at 22 is very good going! Do you also have your own place or are you living at home with family?

Have you ever had issues with tenants? And does the letting company you use sort these out on your behalf if you have any?

Hopefully the broker won't charge me if I back out of the offer, but you never know. I did make them work quite hard in all fairness.

Soloistas

You are definitely right Browneyedbazzi.

It will be a place of residency for the long term, as I see myself working for the company I am with for at least 5 years. Then if I change jobs it will only be if it is within a 1 hour drive radius.

The area I am looking to buy in Bradford postcode bordering Pudsey. The house prices have increased slightly (not a lot - i probably could have got it cheaper 7 months ago - I was monitoring this area for about a year because I was planning to move here before inheriting anything). It is not the best area but I think for the money it will cost for a 2 bed terrace it is reasonable. I managed to get a bit of money off the asking price too which will allow me to refurb the bathroom.

DT91

I currently live with parents still, which has allowed me to expand, i plan to move out into my 6th property as then profits from rent will pay the mortgage on my home therefor allowing me to save still to expand portfolio further!

65k for a house is quite good! not sure what bradford is like but what sort of rent would you expect on a property like that? because of the price of the property any intrest will be quite a low monthly payment! on a 50% LTV i think you can get as low as 2%, which will be £54 in interest per month? a small price to pay if your rent is going to be £400+

For me debt is an asset as it is being paid of by someone else, yes i may be paying alot in interest but in 20 years i will have properties paid off by other people! So its a short term compromise for a long term gain!

I have had a couple of problems with tennants, as i have 2 1 bedroom flats most of the time im going to be renting to single young men, who even tho are similar age to me (often older) seem quite irresponsible! i had one tennant a few weeks before christmas just dissapear with no contact and although he was up to date with his rent at the time he left, the rent for the following month was missing, so i had a property half furnished full of rubbish and no rent and had to give notice before gaining access. had no response so in the end just threw everything away and got property ready to be let again. It was quite a hard first experience as 1 year previous it was a brand newly modernised property and now it was nothing more than a dump! Most people would have been put off but i didnt let it put me off and ive had a tennant in there now for 18months!

Soloistas

Bradford has some nice areas and the place I am getting is close to Pudsey (a more desirable area if I am honest). The house is surrounded by not so great areas (fairly rough areas) but I guess you get that anywhere. The mortgage repayments would be about 300 for 15 years and that would leave me with about 350 to save per month. If I bout outright I could save 650 per month (providing nothing goes wrong) which would mean in 5 years I could save 39k to fund another house.

This is why I was thinking sit back on the fence for 5 years to get a bit more comfortable with the risks. You sound like you have your head screwed on and have a very business mindset. I unfortunately have a very risk averse attitude lol

I am glad to hear that the bad experience didn't put you off and that you came back on top from it. Seems like you have learned a lot from the whole letting experience.

Living at home with the parents seems like a good way for you to build up our portfolio and get yourself in a good position in the future. I will need to have a long think into it but for now I will probably buy outright and might eventually pull some of the equity out to fund BTL investments, when I more confident.

Will you mainly be purchasing 1 bed apartments? Do you think they have a better return in your opinion than other properties? Will you eventually consolidate them into a bigger property and get a higher return or just keep the 1 beds?

DT91

In your scenario it probably would be best to buy the house to live in outright and then you can look more into the ins and outs of property renting. After 6 months of owning the property you should be able to take out a mortgage on it and use the funds to purchase a buy to let should you wish or wait the 5 years and then purchase then.

Property renting isnt for people who get stressed easilly, and yes it is always a risk, there are so many what ifs and so much damage that can be done, but you just have to live in hope that people look after what theyve been given!

I mainly buy 1 bedroom places as thats all i can afford although i am looking at a 2 bedroom place currently which is about 50miles away, The cost and the rent is about the same but i just get an extra bedroom for the money. The % yield on smaller properties here is better, 1 bedroom flats are 100,000 and rent for 550-595, 2 bedroom flats are 130-150,000 and rent for 695. For a 3 bedroom house youll be getting around £900 pcm in rent but wouldnt be purchasing at 200k + so would be better getting 2 1 bedroom flats for my 200,000 and getting 1100-1200 in rent rather than 900pcm. Plus your splitting income so if i lost a tennant in one flat i still get £550 per month, if you only have one property and you loose your tennant you have nothing coming in!

For me if i was buying a house i would be buying somewhere to do up sell it on and use the profits to purchase some smaller units.