NEXT STEP- Buying Flats OR ?

mh93

Good afternoon,
I'm self employed with no pension so need to think of plan B
Currently have £42k left on my mortgage with my house valued at around 450k.
Being self employed has caused a few issues but looking to get a remortgage of £165k to raise £133k.
So plan A is:
Put my £123k towards a flat of £150k so I only have one mortgage 
£165k repayment is around £770 per month, a flat will rent for approx £775 per month (fee's inc service charge roughly £80/month). My aim is to overpay the mortgage and repay after 10 years, leaving profit of £650/700 per month from year 10
Plan B:
Split the £123k into 2 BLT mortgages, buy 2 flats at £170k putting £61k towards each flat on Interest only
Repayment part £770/month
2x BLT mortgages of £120k each, interest only £228 a month X 2 = £1250 with rent raising about £1600 per month (netting £1450)
My wife has a part-time job so we can off-set some of the tax against her because she's under the threshold.

I've done maintenance work for a letting agent for the past 15 years so I've seen the best and worst of tenants, I will also get rent guarantee to cover rent if they stop paying.
Thanks for your time

ukri

OP, what is it that you would like opinions on, the mortgage aspects of your plan or the whole plan itself?

For what it’s worth, I would go for plan B in your situation.

clueless_but_curious

Plan B would involve you having 3 mortgages.  Others can comment on affordability and the likely rates
Plan C for you to consider - if you are good at property maintenance and have a few trades under your belt, and know people with the trades you don't have, why not go in to property development?  Buy, refurb, remortgage / sell, buy, refurb, remortgage / sell, repeat

mh93

Apologies for delay in replying, laptop had a meltdown so now replaced.

Looking for input into the ideas really, I know it comes down to individual risk taking and where we feel comfortable.
Would like the idea of plan C but not sure i've got the patience, I'm a tradesman myself and not sure I want the hassle of relying on other trades but its not a definite no.

deedee71

Have you looked at properties in other areas (obviously would require a letting agent rather than self-managing) but property prices in other areas would certainly give a higher yield.

Another think that jumped out from your first post is interest only payment of £228 on £120k - what interest rate is that?  I'm coming to the end of a 5 year fix at 4.08% which is £210 a month on sub-£50k.