Buy to let - good idea or not?

Shizaro

Hi all,

I paid off my mortgage a year ago (i'm only 40! good eh!!), and have amassed about £15k in the bank. I have no pension, and I was considering buying a little holiday flat at the coast, renting it out during the summer, and then using it myself in the winter.

I can get a flat for around £75k, and would put £10k down, and get a 20 year mortgage. I could rent it out for at least 12 weeks per year for about say 200 quid a week.

I would hope to make some equity on the place, obviously, but I would utlimately sell my 4 bed house and retire into this small 2 bed flat.

Does anyone have any opionions on this as a long term plan?

Shizaro.

walter_plinge

Well done for paying off your mortgage.
A 2 bed flat for 75K - wow! You don't live where I live, that's for sure.
IMHO, if you are looking for the long term, i.e. retiring to the flat, then equity appreciation should't really come into any calculations you make - only look at the equity in your current house.

Regards,

wally.

Shizaro

Thanks Wally,

Yes, you are right, but the retiring to the flat is only an option, I may just sell it and use the equity etc as a top up to my pension.

Shizaro

Has anyone else tried this?

Does anyone have an opinion on whether it is a good idea, or is it too risky?

Just looking for some advice really.

Many thanks all

Shizaro.

dunstonh

Bad value.

12 weeks @ £200 = £2400 income
mortgage will be about £260pm which £3120 p.a.

Flats are where most novice mortgage buy to lets go wrong. Mortgaged buy to lets are not safe investments and you can potentially lose your own house as well as the flat if it goes wrong. That puts it into high risk like any borrowing to invest.

toonfish

few buy to let lenders will do holiday flats but you could of course raise the money on your own home. As long as you can afford the repayments it makes a sound proposition as far as I can see.