Buy to Let Help!

real1314

I think GG is right. This one has come from under a bridge.

Still, an 80% mortgage with a 20% deposit will just give a moderate monthly loss before costs and voids are taken into account.

Sounds like a good return on a £28k investment.

PasturesNew

Looking at the original posting - and reading just the bit about wanting to know how much deposit to put down .... I'd say put down as much as you can.

If you have £1 in the bank it is earning you 6% minus tax, if you're paying a mortgage on that £1 it is costing you more.

... unless I have become strangely brain fogged ... "all of it" is the answer (excepting money needed for legals and emergencies/voids).

franklee

Gorgeous_George wrote: »

£550 for a £140,000 house outlay. I don't know what your motive is for this 'investment' but my trollometer is in the red.

Please don't tell my landlord that, he's getting much less than the 4.7% yield 550pcm on 140K offers!

Unless your meter is in the red cos the yield's too high :eek: In which case I agree!

Nomove

Hi guys,

You are probably not helping him. Speak clearly and slowly--like this:
550 x 12 = 6600, divided by 140,000 = 4.7%

Never ever buy a rental property with a yield that is below Bank of England baserate!

As for mortgage:
20% deposit would be 28,000
80% loan would be 112,000
buying expenses around 2,500

Take a typical rate like 5.35% with a 2.5% arrangement fee.
You will be paying 5,992 in interest every year = 500 per month.

In other words, you will have 28,000 tied up in the house; will need to subsidise the property for maintenance and voids, and will have a mortgage of 112,000 plus 2.5% fee (i.e. 2,800) on the property.

Don't buy it, unless its market value is at least 20,000 higher than the price you are paying. In that case, the equity will take out some of the speculation.

phlash

I want to know how much the original poster 'invested' in the 'how to become a property millionaire' seminar!