Chip away at mortgage or buy to let

AllenC

Hello Money Savers!

I am looking for advice.... should I keep working away at paying my mortgage off or get a buy to let property.
A bit about me, Im 29 in 2 months time & just had my first child so wish to consider her in all this too.
I currently have a mortgage balance of 69K for my house which is valued (8 years ago) at £150k which i am paying at £400 pcm & until last year I was making regular overpayments.

I'm currently saving about £600 pcm so have a pot of around 20k & around 5k that i could use in my current account.
I have seen a buy to let portfolio of 3 x 2 bed flats for 75k with rent expected to be £5.4k per annum per flat.
I could look at consider one flat at £25k but still take a 10 year mortgage, let the property & continue saving £600 pcm then pay my own mortgage in lump sums.

Really not sure what to do for the best.....I don't see the mortgage being an issue even if it wasn't let as I could just not put money into savings for the months it was empty if needed but i still think I could manage the payments & save.

Any help greatly appreciated.

Socajam

Me personally, I would get rid of my mortgage first, and then consider BTL
As a person who is mortgage free, I can tell you how comfortable it is to just relax and not have to worry about how the soon the end of the month comes - it's a wonderful feeling.
I am now mortgage free for 5 years, debt free and living my life without worries of how to pay this or what to cut.

grumiofoundation

Questions I would be asking myself

1) if 25k is all your savings do you really want to lock all of these away? Seems like a big risk to me.

2) Do you want to become a landlord with all that this entails?
https://forums.moneysavingexpert.com/discussion/5180214

3) what is the actual return on the BTL investment once you include mortgage, tax, possible agents fees etc. Also want to consider void periods, tenants not paying rent, repairs... a very good chance it won’t be anywhere near as good as you think it will be

AllenC

All very good points.
I think in my head it seems a good idea as property i\price s on the rise (i think) but that said i'm sure someone with more money would have snapped them up if that was the case.
I have read a couple of books - Rich Dad Poor Dad being the main one & I do a lot of work for customers that seem to have a good work life balance with having bought properties when they were young.

I was looking it more as a long term investment, not expecting to make lots of money initially but hoped it would sell for a good margin in 20 years or so then allowing me to benefit from the growth for my retirement.

I appreciated both comments & will consider both.

dimbo61

And the BTL market has changed in so many ways in the last 5 years.
BTL mortgage rates have never been so low if you have 25/40% deposit and history of being a landlord.
Flats for £25,000 each means a very cheap area of the country with high unemployment so Universal credit
Tax, repairs, ground rent, leasehold costs, it goes on and on.
Good luck

sal_III

AllenC wrote: »

property i\price s on the rise (i think)

No it's not, at least not for large part of the country. There is general slowdown and god knows what Brexit will bring.

https://www.nationwide.co.uk/-/media/MainSite/documents/about/house-price-index/2019/Jun_Q2_2019.pdf

foxy-stoat

Put it into your existing mortgage and keep saving.

AllenC

Sorry I was meaning for the area im looking at. Its just had millions invested between hotels, schools, golf course & now the airport has been reopened with lots of wind energy jobs opening up.

AllenC

I really appreciate all the advice given.

I will go with my own mortgage for now & look to keep saving.

I am currently saving in a select ISA & also premium bonds so look have a look at other threads to see if i am going about it the correct way.

Thanks again.

foxy-stoat

AllenC wrote: »

I am currently saving in a select ISA & also premium bonds so look have a look at other threads to see if i am going about it the correct way.

Cash in all your Premium Bonds and put the money in an ISA.....that will give me a better chance of winning !