Buy First Home or Buy to Let

trenton

Hi,

I am in the dilemma to figure out wich action would make more sense.
Buy my First Home or rather keep renting and buy to let?

Let's say we do not put much emphasis on the property's growing value as an expected benefit (we cannot really take it for granted)

Scenario 1:
If I take out mortgage for my first home:
I will pay around £1150 a month back plus £350 interest per month. However I do not need to pay rent but most probably i will still end up spending money on maintance and improvement. Also, I am not entirely sure i will have a better chance to take out another mortgage for Buy to let.

Scenario 2:
I can keep renting with 900 plus bills and take out a mortgage for buy to rent, ,and I assume i will be in the better situation to be approved for a second mortgage for another buy to let.

Could anyone more experienced spare some time of his/her and help me see this through properly? Which options makes more sense to better my passive income in the long term?

I welcome any perspectives. Thanks for helping me out.

Thrugelmir

The major issue you face is that with no rental income could you afford the BTL mortgage and empty property costs? Many BTL lenders require applicants to be homeowners in their own right.

Interest won't be fixed at £350. It may well rise. Affordability could therefore be an issue.

trenton

I can afford the rent and the mortgage payment as well in the case of the BLT is not occupied.

My main concern is that I rather want to invest my money then own a liability (home). So, i am trying to figure out if i tie myself down with a home purchase could i still be able to do BLT and invest in properties?

Thrugelmir

trenton wrote: »

My main concern is that I rather want to invest my money then own a liability (home).

Personally I'd say that the other way round. As the tax advantages and certainty of return lie with with home ownership. With a BTL comes all the joys of running a business and the tenants you may potentially have. Far from being a pure investment and certainly not without liability.