Help. How do landlords fund multiple purchases?

Sami_-Finbud

It is possible to get 85% on buy to let for experienced landlords.

MoneySavingMission

Sami_-Finbud wrote: »

It is possible to get 85% on buy to let for experienced landlords.

where?

I appreciate that interest only would generate me more £ to save each month but I prefer the fact that once i've purchased (deposit + renov costs) that the tenant effectively pays the rest of the mortgage.

I'm mid 30s and want to retire early so 10/12 years is my max as want all flats mortgage free to offer me 100% of the income in to fund this.

last flat I did has a 11% yield (minus mortgage costs)

thanks for all comments. it's very interesting to hear everyone's different ideas. I won't touch my residential family home so need another strategy.

silvercar

Your problem is that your desire for repayment mortgages over a relatively short term contradicts with your aim to expand your portfolio.

If you are repaying the loans then you are not increasing your savings and your LTV on your existing properties is falling. So one option is to remortgage to release equity, but that would be less necessary if you had interest only mortgages and so were building up savings that you could use as deposits on the properties you want to buy.

MoneySavingMission

silvercar wrote: »

Your problem is that your desire for repayment mortgages over a relatively short term contradicts with your aim to expand your portfolio.

If you are repaying the loans then you are not increasing your savings and your LTV on your existing properties is falling. So one option is to remortgage to release equity, but that would be less necessary if you had interest only mortgages and so were building up savings that you could use as deposits on the properties you want to buy.

I understand. It looks like if i want to maximise savings for further deposits then i'll need to look at interest only.
In summary, are there any tax differences?
Do you still need to take an new financial product when taking out a new interest only mortgage? Or just extend the mortgage period to eg 20 years then just sell the asset once mortgage ends?

Sorry for the questions on interest-only but its a totally new thing for me.

ACG

There are various ways of doing but ultimately it will come down to your income/expenditure and cost of the properties.

You can only make the money you have stretch so far. If you are buying renovation projects and spending on doing them up then it is probably costing you more than buying a cheaper property already done up, but you are probably leveraged far lower than some landlords. Likewise you have the mortgages on repayment, so it is taking you longer to build up the capital for future purchases - but from a risk perspecitve you are probably quite comfortable.

I have a few landlords that I look after but most have one or 2. The "proper" landlords who have portfolios all have a main job and do reinvest the profits, but they are leveraged at 70-80% LTV.

getmore4less

MoneySavingMission wrote: »

where?

I appreciate that interest only would generate me more £ to save each month but I prefer the fact that once i've purchased (deposit + renov costs) that the tenant effectively pays the rest of the mortgage.

I'm mid 30s and want to retire early so 10/12 years is my max as want all flats mortgage free to offer me 100% of the income in to fund this.

last flat I did has a 11% yield (minus mortgage costs)

thanks for all comments. it's very interesting to hear everyone's different ideas. I won't touch my residential family home so need another strategy.

problem is by doing this your purchase in 5 years time only has 5/6 years to pay it off so won't work.

go interest only and buy that property sooner then you spread the load across the portfolio.

getmore4less

MoneySavingMission wrote: »

I understand. It looks like if i want to maximise savings for further deposits then i'll need to look at interest only.
In summary, are there any tax differences?
Do you still need to take an new financial product when taking out a new interest only mortgage? Or just extend the mortgage period to eg 20 years then just sell the asset once mortgage ends?

Sorry for the questions on interest-only but its a totally new thing for me.

you take I/O to lower the initial cost, keep cashflow, build up the portfolio to the level you want, then start overpaying on the ones you want to keep for the income and sell of the dodgy ones you kept too long.

you still have a debt free plan just back end the payments which have been inflated away.

MoneySavingMission

what interest only time period would you suggest for mid 30s?

I will take interest only this time to improve cash flow although reinvestment of profits will be a lengthy process to gather enough for a new purchase deposit - combined with any savings left over from renovations.
any other tips appreciated.

MoneySavingMission

Bump
Should i consider a 30 year i-o new mortgage?
Do i need a seperate financial product to run alongside this?
Ive bought the next flat today so would appreciate any advice