Buy to let house/ Flat for 70-80k

diesel01

Good morning,

I was thinking to buy a house or flat in the uk for 70-80k and then rent it out.
I live in london, I could never afford anything so I'm thinking to buy something like in Luton, Birmingham, Manchester. Now looking on Zoopla a £80k flat would generate arround £600 pcm (probably more like £500 in reality).

Calculating my salary x 4.5 easily gets me above that. I have never lived in luton so I don't know how quick the flat would rent out or if there are any good areas where I can buy cheap and rent for 400-600 pcm.

My plan is to have 2-3 of these flats in the feature.

Any advice would be very welcome.

Caz3121

do you currently have a property owned outright or with a mortgage?
(most BTLs are not available to non-householders so you will restrict your lenders)
salary calculations tend not to come in to it in the same way as a residential mortgage
in most cases you will need a minimum income of £25k, 20%+ deposit and rent payment = 125% of the mortgage interest
Are you also in a position to cover the mortgage when the place is vacant, maintenance etc

Mallotum_X

diesel01 wrote: »

Good morning,

I was thinking to buy a house or flat in the uk for 70-80k and then rent it out.
I live in london, I could never afford anything so I'm thinking to buy something like in Luton, Birmingham, Manchester. Now looking on Zoopla a £80k flat would generate arround £600 pcm (probably more like £500 in reality).

Calculating my salary x 4.5 easily gets me above that. I have never lived in luton so I don't know how quick the flat would rent out or if there are any good areas where I can buy cheap and rent for 400-600 pcm.

My plan is to have 2-3 of these flats in the feature.

Any advice would be very welcome.

Think you may need to do a little more research. At 70-80k you would have a choice of maybe half a dozen grotty studios in a rubbish part of Luton. The places at that price are that cheap for a reason. You need a minimum of another 30-40k to be getting a half-decent flat, more like 140k+ if you want a decent rent.

No chance of a house at that price in luton, maybe a parkhome in one of the villages nearby. Probably looking at 125 for a 1 bed house as an absolute minimum currently, but even that will be a stretch.

diesel01

I definitely need to do more research, that's why I like to ask questions before I do something

How would I be able to rent the flat out if I don't buy it on a buy to let mortgage ? I know that if you have a normal mortgage you can't rent it out, is that right ?

ClaireD85

In the areas you suggest the type of property you can get at those prices is going to be either very small, in a bad area, or needing a huge amount of work.

the type of tenant who will live in that type of property is not going to pay you a good rent for such a place.

I bought my first home in Luton recently, and prices are way above that price level. Flats are generally 100-120k and up, houses 150k+ Having looked on rightmove there's a handful of studio flats in ex council blocks that you could afford. Is that really the type of property you were looking for.

ClaireD85

diesel01 wrote: »

I definitely need to do more research, that's why I like to ask questions before I do something

How would I be able to rent the flat out if I don't buy it on a buy to let mortgage ? I know that if you have a normal mortgage you can't rent it out, is that right ?

BTL mortgages have a large deposit and minimum borrowing levels, plus will look at affordability.

Perhaps worth talking to a broker first to get an idea of what you would be ale to borrow.

How will you manage the property, an agent, yourself?

How will you organise repairs?

Do you have the deposit available already?

davidmcn

If you can buy anywhere, why would you choose Luton?

Caz3121

Do you currently own your own home?

this interesting article covers why many lenders will not issue BTL mortages to first time buyers in case they use for residential purchase (I know this is not something you are attempting but will give you the background why not)
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11031884/Desperate-first-time-buyers-warned-over-attempts-to-use-buy-to-let-mortgages.html
Lenders have been cracking down on this for some time and brokers say it is now almost impossible to pull the wool over their eyes. Most now refuse to offer a buy-to-let mortgage to a borrower who does not own their own home.
you would need to find one of the limited lenders that may consider this