buying second house and renting first

flashg67

For me, that level of return, even without factoring in agents fees, repairs, void periods, income tax etc etc is not good enough to hold onto a 200k asset.

Bluebell1000

We've actually just done something similar. There are barely any other 4 beds in the area, so we decided to finance our onward purchase by let to buy instead. We raised £100k interest only let to buy mortgage (£120 per month payment) to form the deposit on our new purchase. We decided to take a 2 year fix mortgage, so we can review things in 2 years, and sell if we wish to, since we'd get back the higher rate stamp duty at that point.

There are obviously running costs, management costs to deduct, but we felt the numbers worked for us, and we have experience as landlords already. We also know the house already, we know what we've done to it (lots) and we know what works are likely in the next few years, so we can budget for that accordingly.

Our mortgage broker found mortgages for us, but I'm not sure if the predicted rental income was included in that or not as income for us. I'd definitely recommend a chat with a broker to explore options though. First time we'd used one, but since it was a slightly complicated transaction we wanted some help with it.