Buy to let advice?

rob6539

Hi guys,

Hoping someone would be able to help me with a bit of advice or info.

I'm looking to buy a house with my girlfriend, she'll be a first time buyer and I'm already a home owner.

My question is, would it be more worthwhile using all the equity in my current property for a deposit on a new house or try and use this opportunity to get a buy to let mortgage on my current property and a shared mortgage on the new?

What kind of things do I need to consider? Or even what information will I need to arm myself with prior to seeing an advisor?

Thanks in advance.
Rob

foxy-stoat

If you want to be a landlord then research as much as you can, check out Landlordzone.

I would forget about becoming a landlord and use the extra funds you would need in reducing your mortgage as fast as you can.

need_an_answer

Do you want to be a LL?

read up on it and your requirements to run a business....

Its not something I would recommend you doing if you think you will make money out of the property you currently have.

Much will depend on whether after all the expenses and void periods whether you can make anything from it...you might be surprised that actually you end up with an expensive hobby

Do you have any figures for income/expenditure yet?
There are a few LL's who will run through your figures if you wish and give you the benefit of their experience

With the limited information you've given in your post,as a LL with a few years experience I'd probably tell you to avoid the rental route unless you are prepared for it to be an expensive hobby or you want more than one property and thus get a small portfolio over time.(to which you would need to be quite focused)

Its not the cash generator that many think it will be

Houses or indeed property that you've lived in don't always make good rental properties going forward.

Socajam

rob6539 wrote: »

Hi guys,

Hoping someone would be able to help me with a bit of advice or info.

I'm looking to buy a house with my girlfriend, she'll be a first time buyer and I'm already a home owner.

My question is, would it be more worthwhile using all the equity in my current property for a deposit on a new house or try and use this opportunity to get a buy to let mortgage on my current property and a shared mortgage on the new?

What kind of things do I need to consider? Or even what information will I need to arm myself with prior to seeing an advisor?

Thanks in advance.
Rob

My advice is not to mix the two.
There are enough horror stories on her about when couples split up and one wants more than they came to the relationship with.
Keep your first property as it is and for away from your relationship.
If the girlfriend wants a property with you, let her come up with her own money for a deposit, do not sacrifice your home for a joint property - you will regret it.

G_M

** Tenancies in Eng/Wales: Guides for landlords and tenants


Topics covered:

* Repairing Obligations: the law, common misconceptions, reporting/enforcing, retaliatory eviction & the new tenant protection (2015)

* Deposits: payment, protection and return

* Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

* Rent increases: when & how can rent be increased?

* Repossession: what if a LL's mortgage lender repossesses the property?

* New landlords (1):advice & information :see links in next post

* New landlords (2): Essential links for further information

* Letting agents: how should a landlord select or sack?

Caz3121

additional 3% stamp duty if you keep the existing property (4% if Scotland)

sst1234

rob6539 wrote: »

Hi guys,

Hoping someone would be able to help me with a bit of advice or info.

I'm looking to buy a house with my girlfriend, she'll be a first time buyer and I'm already a home owner.

My question is, would it be more worthwhile using all the equity in my current property for a deposit on a new house or try and use this opportunity to get a buy to let mortgage on my current property and a shared mortgage on the new?

What kind of things do I need to consider? Or even what information will I need to arm myself with prior to seeing an advisor?

Thanks in advance.
Rob

In the absence of further info, you will get two types of people replying - those who will ty and deter you from being a landlord regardless of your circumstances and those who will tell you you can get better returns elsewhere without knowing Any background to your financial situation.

Without disclosing the following, it’s a piece of string question.

Which part of the country are you in? NE, NW, Scotland, SE? It makes a difference. Letting is easier and yields are higher in the north.

How much is your property worth and how much equity (in % terms if you don’t want to share £ value)? Again this makes a difference, you will be able to get better rate on a mortgage if you have better LTV allowing you to make a better return.

How long have you been with your current mortgage lender and which mortgage lender? If you can get CTL for a time while you improve LTV position, you can save mortgage interest in the long run.

Do you want a fully managed let or want to manage it yourself? Less work means less yield but could save hassle.

How will you make up the deposit for the new house if you don’t sell your current property? Depending on the value of your new house and LTV, higher interest payments could offset or be detrimental to overall net value of you decision.

What is the value of your new property? Determines how much extra SDLT you will pay.

Being a landlord is hard work but contrary to people advising against it all the time, new landlords can be successful. You need to make sure you have understood why you want to do it (long term investment or immediate return), understand the legal responsibilities, set up for self assessment and finally understand the world of mortgages.

rob6539

Thank you all so much for your input, advice and further questions. I was anticipating a minefield, it's really helpful having some light shed on the things I'd need to consider.


Quite honestly the motivation for me isn't about generating an additional monthly income, it was solely for future investment.


But a lot to think about.


Thank you again all, really appreciate it.