Guaranteed rental income .

G_M

phill2-0-0-3 wrote: »

I've been told I need a Assured shorthold tenancy .

If I'm planning on geting a buy to morgage .

Presumed Northwood don't offer these

told by who?


as already explained, an AST can only be granted on a residential tenancy. You will be granting a (non-residential) commercial tenancy to Northwood. They will be granting an AST to the occupant.


You would therefore be in breach of your BTL mortgage conditions.

phill2-0-0-3

Unfortunately your probably correct .
And I'm not financially in a position where I can afford to lose money .
But what do I do , The house won't sell
And I can't sit around for years paying the higher amount of the morgage waiting for it to sell .
I can't lock in again on a private morgage as I only get 3 years to build the house at my parents . Plus if I was to lock in on a morgage and then sell it would cost me around £4000 extra in fees to my morgage company .
I am at a loose end the only way it adds up is by renting . I've spoken to Northwood and they don't work in my area , so that's a no from them .
So would have to be another estate agent , who won't cover everything .
The maths makes sence
Rental £1000 deduct
but to let morgage £250
estate agency fees £100
Insurance and repairs £100
Mortgage on new property £450
Taxes £100 ish
= £1000
I'm currently paying £750 morgage as not fixed and my income is £1000 pcm .
And the upside to this is I keep the equaty in my current home of around £110.000

But I am also concerned I'm trying to do all the research I can . Getting a good estate agent and most importantly the correct tennent seems to be a number one priority

What are your concerns as may be something I have over looked ?

Many thanks

csgohan4

phill2-0-0-3 wrote: »

Unfortunately your probably correct .
And I'm not financially in a position where I can afford to lose money .
But what do I do , The house won't sell
And I can't sit around for years paying the higher amount of the morgage waiting for it to sell .

What are your concerns as may be something I have over looked ?

Many thanks

Yes the price, every house will sell at a price, if you don't price it competitively your going to have to play the waiting game

theartfullodger

If you are not able to cope with loss of money then renting property is not for you.

Unexpected repair bills? Letting agent or tenants fails to pay as contracted? Brexsh+t property values crash? Interest rates shoot up? (I had a mortgage when Bank rate was 17%: painful.

There are NO guaranteed safe investments: Even UK government bonds could go bad

Durban

No , the math's doesn't make sense.

There will be an initial large outlay , gas certificate, PAT certificate ,getting the property ready to rent , finders fee for the letting agent, credit reference checks plus more.

It would be good to have a few thousand saved already as a war chest incase anything major goes wrong in the first couple of years.

What if you need to replace your boiler in the first year? Or you have the tenants from hell who you need to evict?


Rent guarantee insurance normally only covers the legal costs of evicting for non payment of rent not if you need to evict for any other reason.


I think that you would also need an accountant to do your tax return so as not to get in a mess with that as well.


Al these things add up to a lot of money and if you haven't got it in the first place , you can get into all sorts of trouble

Smodlet

I'm surprised no-one has suggested you ask the local council if they would like to take on the property; I understand that is guaranteed income and you might actually be doing some good in the process, OP. Just a thought.

phill2-0-0-3

That's why I'm on here asking the questions trying to do as much research as I can .

Trust me it's not my first thought to rent the place out , but I if the house can't sell then I need to move forward as I'm on a variable morgage at £750 a month fixed £500 . If I tie into another 2 year morgage then if I sell the fees will be around £4000.

That's why I'm staying on variable but it's been a few months now with little to zero interest . So it looks like my.only option is to rent until maybe after Brexit as I need to move forward with the house build

I am concerned I will lose month.. the maths makes sence but feel like I'm missing something

phill2-0-0-3

I allready have the gas certificate and the pat certificate .
I do have a few thousand saved . But it's emergency money really .
I can afford the morgage on both properties worse case synaro out of my normal wage .
The estate agent I spoke to said they cover the eviction process . But I would have thought that was for any reason if they needed to evict . But I will ask the question . And they cover rental for two months if the property is empty .
Ontop they will give me £1500 towards any damages a tennent may cause .
A few of my freind do there own taxes so sure they could help me . Presume I use my work income . My income from rental deduct the interest from the morgage the agents fee and any repairs that would have been done over the year . Then what I'm left with I split as my sister owns half the property so half would have to go on her self assessment ?

Asking the local council ? I thought that would be a very low rental ?

And theartfullodger 17% on a morgage jesus . Both morgages would be tided on one for at least 5 years and the rental one for two

need_an_answer

Am I missing something here?

Looking at the property it seems reasonable,some good work done on it and its in an area that whilst I don't know well,I have friends who have lived in the area and found it to be ok....

OP is there a specific problem with your property that it wont sell?

Whilst I can see you've certainly improved it over the time you've owned it and therefore upgraded its interior,I'm struggling to see why you shouldn't be getting some interest in it even if you reduced the price a little more....

phill2-0-0-3

I have spent well over £30.000 on the property .

The main issue is at the end of the road 3 doors down there is a 3 bedroom house mine is a 2 bed .
There's has No exstention , no drive front or rear . No downstairs wash room
But I reduced mine by £20.000 and the same day they reduced there's by 20.000 the same day . Mines 270k there's is 260k now . Was up for 300k . Sold at auction for 215k the guy has just brought it to flip .
The issue is I can't reduce anymore I need a set amount to complete the build at my parents address.
There's small bits that still need doing . Boiler cover . The plinths in the kitchen . But nothing major .
Had a viewing yesterday the feedback they loved the property and may possibly put a offer next week . So will have to wait and see on that one .
It's been over 3 months and just not geting the interest that I was hoping for .
And need to move forward asap