Re-mortgaging to buy another property...do I have a legit opportunity here or a pipe dream?

Mutton_Geoff

housebuyer143 said:

Mutton_Geoff said:

Think of it this way, you have a nice amount of equity and have gone someway to paying off your mortgage. Now you want to take out a loan secured against your own home to start a business you don't have any experience of.

Timing is not good for BTL in terms of taxation and tenant rights.

You have to take risks to make money. I plunged money into a rental made £70k profit in 8 years. I would never have made close to that paying down my mortgage. 

Not everyone has the dream of playing it safe and paying off their house at 40. 

That being said I don't personally think now is the time to go into rental 

I agree, and I am in a very fortunate financial position because of it. But for a couple to gamble (which is what risk is) with their own home in the current market to invest in more property requires very careful thought. If they want to secure finance against their home to start up a new business, then why not gamble with a tattoo parlour or beauty salon?

https://www.bbc.co.uk/news/uk-63799670

The real issue is that success stories are always yesterday's news. Including BTL.

Flugelhorn

I did it to buy a holiday let (in the days when the taxation was more generous towards it) - made little on renting it out but significant returns when I sold it after a couple of years 

[Deleted User]

Mutton_Geoff said:

housebuyer143 said:

Mutton_Geoff said:

Think of it this way, you have a nice amount of equity and have gone someway to paying off your mortgage. Now you want to take out a loan secured against your own home to start a business you don't have any experience of.

Timing is not good for BTL in terms of taxation and tenant rights.

You have to take risks to make money. I plunged money into a rental made £70k profit in 8 years. I would never have made close to that paying down my mortgage. 

Not everyone has the dream of playing it safe and paying off their house at 40. 

That being said I don't personally think now is the time to go into rental 

I agree, and I am in a very fortunate financial position because of it. But for a couple to gamble (which is what risk is) with their own home in the current market to invest in more property requires very careful thought. If they want to secure finance against their home to start up a new business, then why not gamble with a tattoo parlour or beauty salon?

https://www.bbc.co.uk/news/uk-63799670

The real issue is that success stories are always yesterday's news. Including BTL.

I also agree but its about the risk reward calculation.

I was fortunate to achieve 10% yield (unheard of) and property value up 75% in 6 years. So if the yield failed to meet expectations, i anticipated the capital increase and visa versa. If all else failed i would probably have lived there myself!  Contingencies. This is to say that there was more than one way for it to work out well.

However, anyone buying my property for the same reasons today  wont do as well. Surely with a 75% increase in 6 years the capital value wont increase much more, in this market. And I was paying 2% interest on that mortgage and no second home stamp duty.

If anyone can make it work in the current market- good luck. Entering into a slow burn arrangement where the rent barely covers mortgage, with a view to it being paid off in 30 years - no thank you.

RedfordML

Thanks to everyone for all the advice, information and taking the time to reply. I think at this time, we will consider getting ourselves mortgage free before we look at an investment of this type or size. 

So much to consider - thanks again!