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Considering BLT
Soundgirlrocks
Posts: 746 Forumite
I'm after some outside input, Ive got a flat in London current value is around £230k to £240k mortgage is £105k. I have a couple of grand in cash but no other savings and £11k debt (0%) from doing up my property.
There is the possibility of another flat in the block coming up for sale and I am wondering about it as a BTL. I not actively looking for a BTL however I am director for my block and my gut feeling is that the current owner is being foolish selling now. There are issues with the building however as director I am aware that most of these are being dealt with or we have a plan for dealing with.
The flat itself needs work as the current tenant has trashed it but again I know the building is structurally sound, and I believe there is capital gain to be made on second property in the next 2 to 3 years by doing the work that it needs and the general improvements to the whole building. Am I being crazy to think it is possible to purchase as a BTL? I was thinking I could take £60K out of my property on an interest only mortgage, pay of my debt (which then gives me sufficient to cover the interest on the new borrowing per month) and get an interest only BTL for around £130k. I would expect the BTL to sell at auction for between £165k and £175k in its current state. Resale in 2-3 years £210k -£220k.
The work involved on the actual flat I can do myself and have it back on the rental market within about 4 weeks. Being a landlord I'm happy with dealing with all the legalities etc that is would involve. Rental would be £900 pcm which would cover all the mortgage interest, service charge, insurance etc and create a pot incase of voids & unforeseen expenditure on the BTL.
It feels like a crazy idea, but I'm working so hard to improve the block which will benefit all of the leaseholders, the chance to increase my return for that hard work is quite appealing.
There is the possibility of another flat in the block coming up for sale and I am wondering about it as a BTL. I not actively looking for a BTL however I am director for my block and my gut feeling is that the current owner is being foolish selling now. There are issues with the building however as director I am aware that most of these are being dealt with or we have a plan for dealing with.
The flat itself needs work as the current tenant has trashed it but again I know the building is structurally sound, and I believe there is capital gain to be made on second property in the next 2 to 3 years by doing the work that it needs and the general improvements to the whole building. Am I being crazy to think it is possible to purchase as a BTL? I was thinking I could take £60K out of my property on an interest only mortgage, pay of my debt (which then gives me sufficient to cover the interest on the new borrowing per month) and get an interest only BTL for around £130k. I would expect the BTL to sell at auction for between £165k and £175k in its current state. Resale in 2-3 years £210k -£220k.
The work involved on the actual flat I can do myself and have it back on the rental market within about 4 weeks. Being a landlord I'm happy with dealing with all the legalities etc that is would involve. Rental would be £900 pcm which would cover all the mortgage interest, service charge, insurance etc and create a pot incase of voids & unforeseen expenditure on the BTL.
It feels like a crazy idea, but I'm working so hard to improve the block which will benefit all of the leaseholders, the chance to increase my return for that hard work is quite appealing.
0
Comments
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A number of tricky elements to this. You need to speak to a good broker.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Thanks, I have a broker who dealt with my original mortgage and I will speak to him its more weather or not it is a crazy idea in the first place, I think there is potential there. Perhaps I should have posted in house buying but at the moment my head is full of mortgage scenariosA number of tricky elements to this. You need to speak to a good broker.0 -
Your broker is a good start, make sure they are experienced with buy to let.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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