when to do buy to let

jamels2

I have heard some people say they wouldnt dream of buying a second property to let until there own residence was mortgage free.
Whereas others advocate as much cheap debt as you can get and as much rent income so use leverage and buy more properties as soon as you can. ie leave 25% equity in your home and 25% deposit on another to let.
What are your views on this ?

Davesnave

My view is that if one directs as much energy into equities ownership as many are forced to apply to their BTLs, the results will probably be just as good, or better, without all the 'human interface' hassles that may arise.

ognum

jamels2 wrote: »

I have heard some people say they wouldnt dream of buying a second property to let until there own residence was mortgage free.
Whereas others advocate as much cheap debt as you can get and as much rent income so use leverage and buy more properties as soon as you can. ie leave 25% equity in your home and 25% deposit on another to let.
What are your views on this ?

It depends on your willingness to expose yourself to the whims of the market.

25% equity can easily be knocked off the value of your home and your rental homes leaving you in negative equity with them all. Not a great position to be in.

Some people who require debt to buy BTL are currently leaving the market due to the tax changes that will make them much less tax efficient.

I don't think it's as simple as do this or do that, you need to look at your circumstances, your opinions on the amount of debt you can handle. The area you BTLs are in and whether you can cope with no rent and still pay the bills.

iantojones40

Genuine question... Do you really not have the slightest clue about all the various tax changes and lending criteria that have been introduced already and the additional ones still to be phased in... all aimed at the BTL market, in particular the leveraged BTL market?

AdrianC

Everybody thinks that what they've done is the best possible way to do it - it's called confirmation bias.

Unless, of course, they happen to have been burnt...

The simple answer is to run all the numbers, including taking into account foreseeable future changes, and see what works best for you.

Marvel1

Based on the title question, once I fully understand what I as a landlord I must do and cannot do, and understand what rights the tenents have and then make the decision based on that if worth the risk involved. If so then look into the finance side of it.

Bluebirdman_of_Alcathays

iantojones40 wrote: »

Genuine question... Do you really not have the slightest clue about all the various tax changes and lending criteria that have been introduced already and the additional ones still to be phased in... all aimed at the BTL market, in particular the leveraged BTL market?

You would hope so - this is about the 6th thread the OP has started on the subject!

Then again, perhaps not.

ThemeOne

It could be the OP is using the MSE forums to try and find out the ins and outs from some who have more experience.

Cakeguts

You need a very large sum of cash to make the numbers work in buy to let. Very small mortgages on the buy to let properties if any at all.

slowpoke_rodriguez

Cakeguts wrote: »

You need a very large sum of cash to make the numbers work in buy to let. Very small mortgages on the buy to let properties if any at all.

Or very large mortgages...
Oh wait, that was 5 years ago...