How does this sound as an investment?

Moneysaverchris

Hello all,

I plan to invest money in property, i have a deposit ready to go and almost have a mortgage certificate from Natwest.
I have 3 credit cards all are clear,
1 loan for £7500 But i will pay a couple grand off it before i get my mortgage applied for, and ofcourse i have paid some already, spotless credit history,30k a year job and a company i just set up for private cheffing.which i don't expect anything from but could realistically make another 20k (i am not depending on this at all) so a few extra quid! 21yrs of age.

MY outgoings per month are
rent- £200
Petrol - £150
Loan - £155
and a few other bits £50

So realistically practucally nothing, a decent position to be in.

I want to buy a house circa 130k to rent out.I am aware of all the rules and regulations and registering for capital gains tax etc.
I am doing it as an investment? What are your opinions - good move or silly move

chris

Freecall

Moneysaverchris wrote: »

MY outgoings per month are
rent- £200
Petrol - £150
Loan - £155
and a few other bits £50

Don't you eat!

innovate

Freecall wrote: »

Don't you eat!

And why do you want to let when you are renting yourself?
Who pays for your clothes and shoes? Your holidays? Your phone? Your Internet connection?

How much do you have in your emergency fund?
What pension scheme does your employer offer, and how much do you contribute to it yourself?
How much have you set aside for mandatory outgoings such as landlord insurance, repairs and maintenance, management costs?
How are you going to pay the mortgage in periods of non-occupation?

Daniel54

By far the best property investment you can make is to buy a house and live in it.For that you don't need to already own a property or have a 25% deposit.

Moneysaverchris

Freecall wrote: »

Don't you eat!

included in rent i have cushty living arrangement's!

Moneysaverchris

innovate wrote: »

And why do you want to let when you are renting yourself?
Who pays for your clothes and shoes? Your holidays? Your phone? Your Internet connection?

How much do you have in your emergency fund?
What pension scheme does your employer offer, and how much do you contribute to it yourself?
How much have you set aside for mandatory outgoings such as landlord insurance, repairs and maintenance, management costs?
How are you going to pay the mortgage in periods of non-occupation?

Because my living arrangement is comfortable i would be worse off paying the mortgage and barely being there so why not have someone else pay it for me!?Phone and internet included in the above and holidays not worries about been on 4 this year so can give it a break for a bit.I am not naive.

My emergency fund is just over 3 months wages (£7500)

I have the money for any periods of non-occupation i have lots of disposable income i have thought about it it's not an issue, i will manage it and set money aside for maintenance.I have done my homework.

innovate

Moneysaverchris wrote: »

Because my living arrangement is comfortable i would be worse off paying the mortgage and barely being there so why not have someone else pay it for me!?Phone and internet included in the above and holidays not worries about been on 4 this year so can give it a break for a bit.I am not naive.

My emergency fund is just over 3 months wages (£7500)

I have the money for any periods of non-occupation i have lots of disposable income i have thought about it it's not an issue, i will manage it and set money aside for maintenance.I have done my homework.

None of this was apparent from your OP but I now understand you have covered all angles so why did you ask for people's views?

innovate

Moneysaverchris wrote: »

My emergency fund is just over 3 months wages (£7500)

Your OP said you had a £7.5K loan - in which case, your emergency fund would amount to zero.

Moneysaverchris

innovate wrote: »

Your OP said you had a £7.5K loan - in which case, your emergency fund would amount to zero.

Hey loan stands at just £5000 but yeah i have a few thousand in yet another bank so all in emergency fund is 6000.
I did cover lots of angles but i am always interested to ask for people view on here, there's many money savvy individuals! Thankyou for your input though

cashbackproblems

Most people on here are very risk adverse so property to them is beyond them, they would rather count their pennies while others are making big money long term in property..i mean someone is paying ur mortgage/equity!

However you need to be aware being a landlord has problems of its own and you need to keep money aside for repairs and the mortgage while looking for tenants, you financial situation looks fine. Property is no longer a quick money making scheme but over time you will have a mortgage paid off and 150k+ sitting there and earning money rent from an initial deposit of 20k..where else can you get such a return

Lokolo

cashbackproblems wrote: »

Most people on here are very risk adverse so property to them is beyond them, they would rather count their pennies while others are making big money long term in property..i mean someone is paying ur mortgage/equity!

However you need to be aware being a landlord has problems of its own and you need to keep money aside for repairs and the mortgage while looking for tenants, you financial situation looks fine. Property is no longer a quick money making scheme but over time you will have a mortgage paid off and 150k+ sitting there and earning money rent from an initial deposit of 20k..where else can you get such a return

I disagree with both these points. The first one, I would say a lot of people here take a huge amount of risk on this site.

Secondly, the OP has only given us a brief overview of his finances. If you are on £30k a year, and outgoings of just £555 (no food, no entertainment, no car savings/tax/insurance, no clothes), a loan of £7k. There isn't enough information at all. I can only assume the OP lives at home.

Has the OP calculated setup costs (advertising and such). How has the OP got his deposit? Assuming savings but could be a gift. What yield would the OP get from their property?

Has the OP considered moving out and having a lodger instead and weighed up the costs for and against this?