Considering Buying to Let

Firegirl

I've been seriously considering buying to let. Last April we moved to our final family home and I am now overpaying to try and reduce our mortgage as much as possible with a plan to buy to let.

The question is when did you make the jump and just so it. I've literally been looking into this for years. Done lots of calculations with different interest rates and %time not let and possible bills etc

Researching areas near me to buy. Thinking of target renters, family/young professionals. Maybe a family home that we might downsize to when the kids grow up but think I should really be thinking of this as a business arrangement so no heart in it.

Use agent or learn how to do all the things an agent would do with problem tenants etc. long term investment so I know I'm bound to have some problem over the years.

I feel like I'm not quite ready to make the jump yet but by delaying, house prices are increasing. I'd like to get my own mortgage down below 200k first.

So this really is a brain dump but wondered if anyone could provide any clarity!!!:rotfl:

dimbo61

Not sure what you earn but £242,000 plus mortgage seems HUGE.
You need a business plan, research what local houses or flats rent for.
You need a deposit of 20/25% and may need a broker to help you find the best deal.
What do you want to buy ? What area ? How much will it rent for ?
Yield !

Kynthia

A few thoughts:


You need to do the finances and ensure that the income you'll receive less the costs and less the tax gives you more of a return than putting your money in the bank.


Speak to local letting agents and see what type of properties there is demand for and work out which type gets you the best return for the money you put into it.


Buy an up to date book or go on a short landlord course to understand the regulations and responsibilities involved in being a landlord.


Speak to a broker and see if anyone will give you a buy to let mortgage and how much they will lend you. Then see what the repayments are and consider whether you can afford them. You'll also need a savings buffer in order to do repairs or cover rental voids.

Firegirl

Thanks for your tips. Yes I really want to go at this like a business plan and have worked out yields and several different scenarios. The problem is nothing is certain, interest rates and property market.

Yes- my mortgage is huge and it does freak me out but I will have this paid off by the time I'm 50/55 and this is our final home for life. I have significant savings and I checked this time last year and lending/deposit I would need would not be a problem. However, I do want to get my mortgage down to less than 200k before i go for it.

Maybe I need to start looking at specific houses for sale and find out rental value and get a feel for it he market over the next year or two. I think I'll take your advise and buy a book. I looked at courses but was worried it would be dated by the time I took the jump.

Should this be a plan further down the road? I know it's something I will do but the question is when!

Thanks again for your tips!

susiejq

Hi,
We are landlords of two buy to let properties bought 12 and 10years respectively. There is a lot to think about. You will need around 25% deposit to get a BTL mortgage and you will need to look at the yield your purchase will return. Look in your local paper at houses to rent, what's the average rent or particular areas/size of property. Buy in the best areas you can afford and ask for top rent. I would suggest using an agent, they can deal with all of the hassle of the tenants; vetting, inventory, drawing up lease agreement, protecting the tenant's deposit etc and carrying out regular property inspections as well as dealing with issues that arise. Subscribe to the free news letter from www.property118.com. It's full of useful information and links.
For us it has been a good thing and has meant we can retire (me at 59) on a reasonable income. I would say good research and good luck!

Firegirl

Thanks susiejq-I think if I'm going to do it, I need to go for it in the next few years. I think it's time for proper realistic research on house price rent and yield, taking into account empty periods and repairs.

Thing is the lovely street I used to live in turned really bad because of one person heavily involved in crime moved in- I'd already moved out before that but my old neighbours had a terrible time. That could happen anywhere though.

Also near me there's loads of development going on so that will be good for the area but it's hard to know which areas will be the best now.