100% Offset Mortgage?

Spikey_2

Ps. You have top start somewhere.

Spikey

Spikey_2

meanmachine wrote:

You can't get a BTL mortgage on 100% and even a 75% mortgage is a very high risk.

Forget it and save your money.

What's the rental yield by the way?

Investments are made by people who have money. Using debt to finance more debt is crazy.

Just my opinion, of course.

Buy-to-let used to be available only to those prepared to take out a commercial loan. Not so long ago a 10% yield was seen as the bare minimum.

EDIT: In London a £200K property will possibly yield £1000pcm - maximum. A £100K property will yield around £500pcm.

Unless the property you've seen is 50% BMV I'd say your plans don't add up.

But maybe if you post more details...

On my investment of around £111000 I hope to yield around £900 PCM.

Spikey

nrsql

A quick look at
http://www.moneyfacts.co.uk/mortgages/charts/mortgages_btl.htm

Shows Northern Rock will give 87% at 3.99% fixed 7 years - oops that's the redemption penalty period - fixed 2 years.
That leaves you with 14,430 to find

If you can really guarantee near £1000 /mth then that leves a fair bit to finance the extra money. Do the sums.

Before making plans you need to talk to people though.
Learn about what it takes to be a landlord (there are expenses and legal requirements - like inspections, fire resistence certificates for furniture, ...). Your 4k can easily be eaten up.

Call some mortgage companies and brokers to see what they can offer. Read some books.
Are you prepared for the property to lose value in the next few years? Sounds like you just want it as a revenue stream.
What happens if the intrest rates rise?

£1000/mth sounds pretty good on a 111,000 property (maybe too good).
Where is it - are there any more?

meanmachine_2

nrsql wrote:

£1000/mth sounds pretty good on a 111,000 property (maybe too good).
Where is it - are there any more?

Timbuktoo by the sounds of it.

Sorry to be negative. But you also have to factor in voids, damage repairs, insurance etc.

Where is the property? How many beds? Which uni is it near?

Spikey_2

nrsql wrote:

A quick look at
http://www.moneyfacts.co.uk/mortgages/charts/mortgages_btl.htm

Shows Northern Rock will give 87% at 3.99% fixed 7 years.
That leaves you with 14,430 to find

If you can really guarantee near £1000 /mth then that leves a fair bit to finance the extra money. Do the sums.

Before making plans you need to talk to people though.
Learn about what it takes to be a landlord (there are expenses and legal requirements - like inspections, fire resistence certificates for furniture, ...). Your 4k can easily be eaten up.

Call some mortgage companies and brokers to see what they can offer. Read some books.
Are you prepared for the property to lose value in the next few years? Sounds like you just want it as a revenue stream.
What happens if the intrest rates rise?

£1000/mth sounds pretty good on a 111,000 property (maybe too good).
Where is it - are there any more?

Thank you again for all your help... As this will be a student let with about 4 students sharing the house and therefore the near £1000 PCM rental.

I will of course look into this further.... whatabout trying to get a second mortgage outright and then let? Is that kind of thing possible etc etc?

Spikey

debtbuster2K5

nrsql wrote:

A quick look at
http://www.moneyfacts.co.uk/mortgages/charts/mortgages_btl.htm

Shows Northern Rock will give 87% at 3.99% fixed 7 years.
That leaves you with 14,430 to find

Wow. I am remortgaging at the moment. I cant find a deal that gets anywhere near that for a residential property, let alone a BTL.

The link doesnt work for me, nor does https://www.moneyfacts.co.uk

Is that definately for BTL?

Regards

Spikey_2

meanmachine wrote:

Timbuktoo by the sounds of it.

Sorry to be negative. But you also have to factor in voids, damage repairs, insurance etc.

Where is the property? How many beds? Which uni is it near?

As I am in West Yorkshire then I have the choice of a few Uni's but I have chosen Leeds Uni.

I have many contacts who would help me in different areas if needed and therefore the rental excess (minus the mortgage etc) will go towards the damage repairs etc etc)

Def not in Timbuktoo.....

Spikey

nrsql

Will the rental be for the full year or just term time?
Per room rental gives a higher revenue for the property but this still sounds too high.

Beware of estimates - especially from estate agents. A friend bought a property on a promise like this and eventually settled for about half after a long time of no interest.

>> The link doesnt work for me, nor does https://www.moneyfacts.co.uk
Think the site just went down.
Does sound good doesn't it - I assume there's a catch somewhere. There's 5 years tie in after the discount. I work on 6% for calculations at the moment.

nrsql

Had a look a https://www.2letnow.co.uk for leeds and looks like £55/week per person which is about what you say.
The per week bit suggests that the rental might not be for the full year though. Maybe you'll be missing rent for a couple of months during the summer.

YorkshireBoy

When I was looking into this a couple of years ago (just before prices went crazy!), I was looking at Huddersfield.

The main problem was the amount of 'serviced' accommodation near the university campus'. Not sure if this was financed by the university or through private companies, but I couldn't compete with what they were offering, ie gyms, bars, restaurants, swimming pools etc and plush new apartment style living.

My business plan meant that I had to charge the same as the developers above - it was a non-starter.

What other accommodation are you up against? Have you researched the competition?

Finally, I still subscribe to the Association of Residential Letting Agents (ARLA) newsletter. Perhaps you should have a look at https://www.arla.co.uk