Buying a second property?

Pixie5740

chrishar wrote: »

So the overwhelming advice I am being given is 1. Extend the lease NOW, before any other decisions?

If it were me then I would be looking at extending the lease and then selling so I can buy my own home. My logic for this is that:

a) The rental income you receive is more or less the same as the rent you are paying out for the roof over your head, this doesn't make financial sense.

b) The gross rental yield isn't great. You could achieve the same or better just using high interest current accounts. Combined with the short lease doesn't make your BTL a particularly good investment and doesn't sound worth having to pay an additional 3% SDLT when you do eventually buy your own place to me.

chrishar

Fair enough Jo, I am making 5% interest on the borrowed money. So is the lease urgent enough for a personal loan?

chrishar

Jo I am currently not paying rent as I am living at my dad's....
Adrian, I have been accepted for the loan, I just haven't sent the signed paper work off yet.
The bank can see my ingoings and outgoings and obviously are happy to lend me the loan.

hazyjo

chrishar wrote: »

Fair enough Jo, I am making 5% interest on the borrowed money. So is the lease urgent enough for a personal loan?

The lease is priority, as everyone seems to agree on.


If you are making 5% on borrowed money, you want to be paying <5% to borrow it from elsewhere (I agree with AdrianC though - I'd be very surprised if they let you borrow that much on a loan - you need to read the small print on these 'guaranteed loans'. It obviously makes no financial sense/logic to borrow money you already have (although you don't have it as you've lent it out). To lend that amount to friends or family is slightly bonkers, but like I say, each to their own. General advice is to only lend what you can afford to lose!).


Jx

hazyjo

chrishar wrote: »

Jo I am currently not paying rent as I am living at my dad's....

Don't think I mentioned rent, but my brain is getting past it lol.

chrishar

Hi Jo you thought I as paying more rent for where I am living than the rent I receive on my flat. I receive 750pcm and pay 0 pcm at the moment.
If you don't think it's a good idea me taking the loan @3.4% how else can I finance a lease extension?

Pixie5740

No that was me because you said that any rent you paid would be the same as the rental income you receive, I hadn't realised you were sponging off your father. That gives you a third reason for extending the lease, selling and buying your own home.

Thrugelmir

chrishar wrote: »

As I said I can get a personal loan from nationwide for 3.4% if needed, up to 25k.

If that's based on the standard mailshot. There's plenty of caveats. Certainly not a guaranteed offer. Nor something to be relied upon.

chrishar

I've actually had the loan offer sent to me in the post before all I has to do was sign and return it for the money to go in my account . Anyway to extend the lease the loan has got to be the easiest way?

hazyjo

If a loan is the only way you can get that money, it may have to be the way forward seeing as you've lent your money out


Do come back and tell us if it was that easy though. Even with the form/letter, or message on online banking, or however they offered it to you, it's not guaranteed, despite what they say. It's only 'guaranteed' if you tick all their smallprint restrictions too.


Jx