Buy to Let

supersaverg

Hi,


Does anyone have recent first hand experience with this?


I am interested in putting toe I market.


What is the 'least amount' I have to out down as a deposit? Are there any 90% deals out there?


Most I have seen are asking for over 25% which puts me out of the frame.


Any pitfalls I should be aware of?

Caz3121

BTL is a business and should be treated as such.

The 'norm' would be
Deposit of 25%
rent = 125% mortgage payment
income £25k+

What is the situation with your current property? how much equity do you have?

Pixie5740

I'm not saying it's impossible but I don't think there are any 90% LTV BTL mortgages out there. As Caz3121 says it's generally the case that at least a 25% deposit is required.

You should also look at the rental yield to see if it's going to give you a decent return or if you would be better off investing elsewhere.

Lots of pitfalls involved in letting property as there ain't nowt as queer as folk. You could end up with model tenants who pay their rent on time and take care of the property or you could end up with the tenants from hell or maybe somewhere in between the two.

You should budget for only having rent 10 months of the year to cover void periods. Also think about how you would cope if the tenant went into arrears if they lost their job or something and were waiting for HB to be sorted out.

It can be expensive to evict tenants if you need to go to court to get an eviction notice.

How would you manage the property? Would you do it yourself or get an agency? Using an agency wouoldn't absolve you of your responsibilites as a LL such as protecting the deposit and getting gas safety certificates etc. If you manage the property yourself would you be happy to have tenants call you at all hours if the boiler stops working or to change a lightbulb (the lightbulb thing has actually happened before )

EDIT: It would be worth posting this on the housing buying, renting and selling board as there are a lot of landlords who regularly post there.

Nebulous2

I got a flyer with a letter from my bank (Clydesdale) offering 85% buy to let mortgages. I've no idea of the details though, it might be mainly targeted at existing customers.

Bantex_2

Good example of why landlords should be registered. "Dipping a toe in the water" when you are dealing with peoples homes and live is not good.

Pixie5740

If the OP lives in Scotland then by law they must register with the local council if/when they become a LL. The council has to deam a LL "fit and proper" before allowing them to register and if a LL fails to register (such as my ex-LL) then fines of up to £50,000 can be imposed.

jonesMUFCforever

From now one affordability to meet repayments come into force with the new MORTGAGE RULES.
Good luck with any application - take sandwiches with you as interviews can last 3 hours !

Bantex_2

jonesMUFCforever wrote: »

From now one affordability to meet repayments come into force with the new MORTGAGE RULES.
Good luck with any application - take sandwiches with you as interviews can last 3 hours !

I believe the the applications are a lot less strict for BTL as opposed to homeowner loans.

You don't need to be able to afford your mortgage, just find others to pay it for you.