Buying a Flat to Rent Out

newlandlord555

As I have 90,000 pounds saved up I plan to buy a flat to let out , earning about 500 pounds a month . I have not done this before and understand that there are dangers to be aware of . Is it feasible ? I have no debts and believe that I will not have to pay tax on my earnings as it will be such a small amount. Am I doing a sensible thing or is there a better way to invest ?
Thank you for your ideas .

DCFC79

You will need a btl mortgage, a broker will answer your questionsnewlandlord555 said:

As I have 90,000 pounds saved up I plan to buy a flat to let out , earning about 500 pounds a month . I have not done this before and understand that there are dangers to be aware of . Is it feasible ? I have no debts and believe that I will not have to pay tax on my earnings as it will be such a small amount. Am I doing a sensible thing or is there a better way to invest ?
Thank you for your ideas .

You will need a btl mortgage, a broker will answer your questions.

newlandlord555

Thanks but I wont need any mortgage . I have 90,000 saved in the bank .

MovingForwards

Do you already own your own home?

newlandlord555

I have seen an ex council house in central Scottish city nearish to a university. I could buy it outright and have 10k left over. I believe I could also get an agency to take care of finding tenants and the legal stuff for 10% . Am I on the right track? It seems a no brainer a sI have no mortgage or tax to pay it will all be profit right ?

MovingForwards

newlandlord555 said:

I have seen an ex council house in central Scottish city nearish to a university. I could buy it outright and have 10k left over. I believe I could also get an agency to take care of finding tenants and the legal stuff for 10% . Am I on the right track? It seems a no brainer a sI have no mortgage or tax to pay it will all be profit right ?

No, completely the wrong track.

It's offers over in Scotland, therefore you won't have enough to buy it, let alone have money left over.

Your posting is so similar to another.

davidmcn

MovingForwards said:

newlandlord555 said:

I have seen an ex council house in central Scottish city nearish to a university. I could buy it outright and have 10k left over. I believe I could also get an agency to take care of finding tenants and the legal stuff for 10% . Am I on the right track? It seems a no brainer a sI have no mortgage or tax to pay it will all be profit right ?

Your posting is so similar to another.

Another day, another user name... 

newlandlord555

The asking price is offers over 80,000 . I have 90,000 saved in bank. No I dont own any property . First time buyer . 

theartfullodger

You will need cash reserves to cope with issues.  Assume at least 7 months rent worth to cover eg the-tenant-from-hell who doesn't pay for 7 months (or agent-from...) or major repairs etc etc.

Most years I make money from my properties: but not always.

Join SaL and do the free Landlord accreditation Scotland courses.

What will you do if you decide to evict tenant then realise your very limited options with PRT please?
You will have to pay tax - unless you've saved £90k whilst only on a very very low salary.

Follow landlordzone forums.

Slainte mhath!

Artful: Scottish Landlord since 2000

Read the 1449 leases act, still valid, to start your learning. The language is illuminating

grumiofoundation

newlandlord555 said:

The asking price is offers over 80,000 . I have 90,000 saved in bank. No I dont own any property . First time buyer . 

If you plan to own your own property (To live in) at some point the fact you own a second property will mean you pay +4% LBTT (+3%SDLT/LLT in England/NÍ/Wales).

This would eat up a lot of your profits. 

As mentioned above you need to research being a landlord properly. 

Make sure you have the financial reserves to cope with non-paying tenants, legal fees, repairs etc 

What will the actual return be on your investment? You may well find that a pension and/or stocks and shares ISA is a ‘Better’ investment. 

AdrianC

newlandlord555 said:

The asking price is offers over 80,000 . I have 90,000 saved in bank. No I dont own any property . First time buyer . 

Wouldn't it make a lot more sense to use that money to buy your own home?

There are plenty of other investments which are going to be a lot less hassle, and quite likely return similar or more, and definitely be a lot more liquid.

Remember - you are starting a business, but you're paying somebody else to run it.