No real pension what about buy to let?

painterscastle

Hi wondered if anyone out there with a buy to let property could give me some advice n their experience as a landlord.

My husband had been made redundant so many times in the last 30 years he never seems to have built up a pension plan worth anything.

I will get a civil service pension but it wont be much as I have worked part time (and am 1 of the lower grades anyway) for over 20 years. I am now a full time foster carer so I am self employed and dont have a pension.

Thanks to encouragement from this site we should all being well be mortgage free in the next 18 months.

We have talked a lot about getting a buy to let property but would need a mortgage. We are looking at properties for around 150000 with a 50000 deposit in an area that typically rents for around 700-800 per month. We would want a repayment morgage ideally over 15 years so tha when we want to retire the house would be paid for.

We know nothing about pensions and as we are now 50 worried that we wont build up a pot fast enough to ever retire. So thinking that a buy to let could provide us with a nice nest egg?

At 51 would we be able to get a 15 year mortgage even.?

dustywarrior

Are you and your husband still in employment? Given your financial situation I still think you would be able to get a mortgage without too many issues. Have you engaged with a broker yet? And where are you based?

HappyMJ

painterscastle wrote: »

Hi wondered if anyone out there with a buy to let property could give me some advice n their experience as a landlord.

My husband had been made redundant so many times in the last 30 years he never seems to have built up a pension plan worth anything.

I will get a civil service pension but it wont be much as I have worked part time (and am 1 of the lower grades anyway) for over 20 years. I am now a full time foster carer so I am self employed and dont have a pension.

Thanks to encouragement from this site we should all being well be mortgage free in the next 18 months.

We have talked a lot about getting a buy to let property but would need a mortgage. We are looking at properties for around 150000 with a 50000 deposit in an area that typically rents for around 700-800 per month. We would want a repayment morgage ideally over 15 years so tha when we want to retire the house would be paid for.

We know nothing about pensions and as we are now 50 worried that we wont build up a pot fast enough to ever retire. So thinking that a buy to let could provide us with a nice nest egg?

At 51 would we be able to get a 15 year mortgage even.?

I own a single BTL property which I let out. I wouldn't advise it to anyone. Not unless you want to hedge your bets by buying into at least 5 BTL properties to reduce the risk somewhat.

Especially if you need a mortgage to do so. Your profits are multiplied by gearing but your losses are also multiplied. If the property drops by 10% you lose £15,000 of your £50,000 investment. A 10% drop is not impossible. Tenants could easily damage the property enough to not be covered by insurance which would cost you £15,000 to put right and restore the value. You can try and claim against the tenant but if they've done a runner not having paid rent for 6 months whilst you are spending hundreds trying to get the property back it's unlikely you'll ever get more than the deposit back.

If you've got £50,000 I would look at simply putting the money in the bank. I also have some cash and put the money in the bank. I earn 6% in regular savings accounts and the feeder current accounts earn 5%. I've filled all of those 5% accounts and the remaining money earns no less than 3%. It's all tax free (as from next tax year you can earn £1,000 a year each tax free) and much less hassle. If you have a BTL you can expect to be called upon at any time to replace items that have failed through normal wear and tear.

_CC_

There's nothing stopping you starting a private pension.

If you're looking to invest for a pension then investing within a pension will naturally probably be the best option. Tax relief on contributions, zero capital gains tax, zero tax on accumulated income, 25% tax free and probably a good portion of pension income tax free (not to mention, hassle free).

BTL could be the best option, but given you say you know nothing about pensions - educating yourself about them may be a decent step.

Thrugelmir

painterscastle wrote: »

We would want a repayment morgage ideally over 15 years so tha when we want to retire the house would be paid for.

As well as advice on BTL 's in general specifically seek advice with regards to taxation. The capital will be repaid out of after tax income. This may well put a different perspective on matters.

In the boom years people made capital gains thanks to rapidly rising house prices. The letting income is secondary. With rising interest rates your plans could soon be in disarray.