start to build a property buy-to-let portfolio - using equity

sonny_c

Hi All,

My intention is to start to build a property buy-to-let portfolio :eek:

My first plan of action as I'm due to be mortgage free :j soon but I require a larger house, was when mortgage free, apply for a buy-to-let interest only mortgage over 25 years and say the house is worth £150,000 take out equity of £130,000 for a deposit for new place due to cost approx. £180,000.

Is this plan even viable or have I got my head in the clouds. :mad:

Slithery

sonny_c wrote: »

Hi All,

My intention is to start to build a property buy-to-let portfolio :eek:

Why? Are you already maxing out your pension as well as taking advantage of all of the other types of investment that would give you a better return with less effort and risk?

My first plan of action as I'm due to be mortgage free :j soon but I require a larger house, was when mortgage free, apply for a buy-to-let interest only mortgage over 25 years and say the house is worth £150,000 take out equity of £130,000 for a deposit for new place due to cost approx. £180,000.

Is this plan even viable or have I got my head in the clouds. :mad:

You need at least 75% LTV for a BTL mortgage so the maximum you could release on a £150k property would be £112.5k. Don't forget to take into acount the extra 3% SDLT you'll be paying as well.


Also please read the following thread and all of the links that it contains before even considering becoming a landlord, there are far to many that don't have a clue what they're doing.


Tenancies in Eng/Wales: Guides for landlords and tenants

babyblade41

Why?? and no to the rest !!.

It's not something I would consider after many years in doing so and far better ways to invest .. but my personal opinion especially after getting all references and a trouble free(well relatively) tenant only have it cost me most of my profit in that particular property over a few years in a few short months

Act in haste , repent at leisure

00ec25

so you appear to want to Let To Buy, not buy to let. There is a difference....

many websites explain it, here is one google result at random
https://hoa.org.uk/advice/guides-for-homeowners/i-am-selling/let-buy-mortgages-explained/

sonny_c

Many thanks to all :beer:, yes it's a Let To Buy, not buy to let. So it's a no to property and I must look into the other types of investment mentioned.

Why Property?

• Demand for UK property outstrips supply.
• Housing is a basic need.
• Relatively easy access to borrowing.

Why invest?

• Inflation > Interest Rates - Your savings are worth less every year!
• Income - Generating assets give a true financial security - A job can be lost, savings run out!

Very early days with a lot of research required and I must seek expert advise from a good mortgage broker.

G_M

sonny_c wrote: »

Why Property?

• Demand for UK property outstrips supply.
• Housing is a basic need.
• Relatively easy access to borrowing.
• equity is tied up and non liquid
• tax regime has changed and is increasingly disadvantageous (+ if Jeremy Corbyn gets in.......?)
• empoying agents cuts into profits
• not employing agents = stress and constant management of your investment
• investment is risky - one bad tenant can destroy 5 years income

Why invest?

• Inflation > Interest Rates - Your savings are worth less every year!
• Income - Generating assets give a true financial security - A job can be lost, savings run out!
• traditional investments (as opposed to savings) tend to match/exceed inflation
• investment require minimal effort/time/stress
• invetsments allow you to spread your risk (as opposed to property where all your eggs are in one [property] market
• pension investments benefit from tax breaks (property does not)
  

Very early days with a lot of research required and I must seek expert advise from a good mortgage broker.

just playing devil's advocate.....