another property - raising deposit

moneysavinmonkey

25ben wrote: »

i estimate the yield will be about 5.5 % on a one bedroom at 130k, rented for 600 / month

or 6% on a 2 bedroom at 160k rented out at 800/month

does that sound reasonable?

hmm. i'm currently paying 560/month for a two bed flat worth around £160k...
moving to a 3 bed semi worth around £250k for 700/month - so those figures don't look right to me!

where in the country are you?
why do you "really" want a second property when you aren't even making any money on the first one?

Debt_Free_Chick

nelly wrote: »

why do you want to lose 40 quid a month?

Plus buildings insurance premium, plus maintenance .....

More like £150-200 per month.

Unless, of course, there is no contingency fund for maintenance ..... :rolleyes:

Debt_Free_Chick

25ben wrote: »

well it is a repayment mortgage but i am going to change to interest only to reduce payments by £200 a month. therefore I would be making £160 profit then.

No you won't.

You'll be using that "profit" to pay your insurance and to build a maintenance fund. At the very least, you have the cost of wear & tear on fixtures, fittings & decor to account for. And possibly income tax!

Debt_Free_Chick

25ben wrote: »

i must also mention i have some money as backup which will be available to me in around 6 months that will pay back the loan in full

Wait for six months and use that money as the deposit?