First time owner,buy to let

sim2335

Look to get a 1 bed room flat I seen today, as a buy to let it’s 95k and 5 minutes drive from my house 107 years left on lease

My mum will help me out and broker said they could get me 75k

So I would put down 20k deposit.

The Monthly rent is £550

I would pay:

landlords insurance

Ground rent

Service charge

Estate agencies

All this looks like I will pay £300 a month.

Anything elese I need to pay?

It has 107 years left, the whole point of buying it is to make a profit.

I will already profit from rent.

Then sell it in 5-7 years when I can afford freehold or sooner if I have a partner.

SDLT_Geek

sim2335 said:

Look to get a 1 bed room flat I seen today, as a buy to let it’s 95k and 5 minutes drive from my house 107 years left on lease

My mum will help me out and broker said they could get me 75k

So I would put down 20k deposit.

The Monthly rent is £550

I would pay:

landlords insurance

Ground rent

Service charge

Estate agencies

All this looks like I will pay £300 a month.

Anything elese I need to pay?

It has 107 years left, the whole point of buying it is to make a profit.

I will already profit from rent.

Then sell it in 5-7 years when I can afford freehold or sooner if I have a partner.

If the property is in England then you need to consider stamp duty land tax.  Assuming this is your only property then I would not expect the extra 3% SDLT to apply.

But you would not count as a first time buyer if you later buy a home.

Dazed_and_C0nfused

My mum will help me out and broker said they could get me 75k

I presume you are aware that loan interest can no longer be claimed as an expense against the rental income, meaning your taxable profit will be larger than what you consider your profit to be.

You can get a tax deduction in relation to the loan interest paid but that doesn't alter the fact that you have more taxable income than you might have expected.

sim2335

It would be my only property if I won’t benefit me, why do so many do it, as first timers then buy there own.

it’s gona take forever to get a 180k-200k house 

dimbo61

There are so many ways to say this would be a terrible idea !
You would lose your FTB buyer status.
I think you will struggle to get a BTL mortgage as a FTB.
BTL mortgage lenders like potential customers to already own there own residential property !
What will you do if your Tenants fails to pay the rent for 12 months ?
Do you have a Scooby doo what's involved in being a Landlord ?
Are you a higher rate tax payer ?

sim2335

The only benefit I see of ftb status is the ISA money.
all other benefits are not that useful.

broker said there’s not many but have found a few that should lend me.

for the rent I will get inuremce, that should cover it if they fail to pay, even if I don’t have that I can afford to cover Rent.

I don’t know much about beign a landlord but then again I don’t even know much about buying a house.

if it’s such a bad idea which it could be why do so many ftb start of with buy to let, then later on but own house.

user1977

sim2335 said:

if it’s such a bad idea which it could be why do so many ftb start of with buy to let, then later on but own house.

What gives you the impression that many do it? 

[Deleted User]

sim2335 said:

The only benefit I see of ftb status is the ISA money.
all other benefits are not that useful.

broker said there’s not many but have found a few that should lend me.

for the rent I will get inuremce, that should cover it if they fail to pay, even if I don’t have that I can afford to cover Rent.

I don’t know much about beign a landlord but then again I don’t even know much about buying a house.

if it’s such a bad idea which it could be why do so many ftb start of with buy to let, then later on but own house.

Due masses of research on this subject, you'll see that the law requires a lot from the landlord to protect the tenant - masses of practical adjustments to a property not already let out, you should have a management company handling the collection of rent, their own fees will also eat into any profit, the tax on the whole idea ...... it's not a simple or moneymaking project when you look into it deeply.
Do plenty of due diligence, this is a business you will be running.

MovingForwards

What many people do is start at the bottom of the ladder, buy a flat and build equity up in it, while saving for the next property to move up to a bigger flat or a small house.

They sell the flat, to buy the small house and save again.

Based on your previous posts, in your shoes I wouldn't go anywhere near a BTL as you will be taken advantage of by tenants or sob stories by 'friends', let alone not knowing anything about running a BTL.

babyblade41

you will find lots of good advice here but from your basic knowledge so far, I think that just to get on the property ladder for yourself will be hard going.

It's not an easy process just buying the property let alone making it into a business , the rules & regulations are pretty extensive .

I would suggest spending the next 12 months researching as much as you can well before buying anywhere 

HampshireH

MovingForwards said:

What many people do is start at the bottom of the ladder, buy a flat and build equity up in it, while saving for the next property to move up to a bigger flat or a small house.

They sell the flat, to buy the small house and save again.

Based on your previous posts, in your shoes I wouldn't go anywhere near a BTL as you will be taken advantage of by tenants or sob stories by 'friends', let alone not knowing anything about running a BTL.

100% this.

I would concentrate on your own home etc rather than running a business right now when it's something you have no knowledge about.

Most beneficial part of being a FTB is not paying stamp duty it's a huge saving not really the isa although that helps.