Seeking Advice on Mortgage Repayment vs. Buy-to-Let Investment

El_Torro

I don't disagree with others who say that BTL isn't a great option. I have a BTL myself (only 1), though I would only recommend it if you have other investments (especially pension) sorted. I also agree with boingy in saying that the total return includes the increase in value of the BTL property. My BTL has doubled in value since I bought it, though that was more luck in buying a place that has appreciated significantly, I didn't know this would happen when I bought it. 

One thing of note is that you already live in a property and have lodgers. This suggests you could downsize and not have lodgers. Personally I can't think of anything worse than sharing the place I live in with lodgers. If you're happy with this arrangement though then fine. You are already heavily invested in property, is it really worth investing further in this area?

Alexland

The main long term advantage of BTL has been that it's a leveraged investment so you are benefitting from larger movements in capital than you are putting down as a deposit. However you pay the second home stamp duty, CGT on any gains and have to deal with tenants, empty periods, and any wear or damage they cause.

It seems to me you can get the same leverage from just maintaining an unnecessary mortgage on your main home while stashing money into new assets via S&S ISAs (and S&S LISAs if opened before 40) and pensions.

Bostonerimus1

El_Torro said:

I don't disagree with others who say that BTL isn't a great option. I have a BTL myself (only 1), though I would only recommend it if you have other investments (especially pension) sorted. I also agree with boingy in saying that the total return includes the increase in value of the BTL property. My BTL has doubled in value since I bought it, though that was more luck in buying a place that has appreciated significantly, I didn't know this would happen when I bought it. 

One thing of note is that you already live in a property and have lodgers. This suggests you could downsize and not have lodgers. Personally I can't think of anything worse than sharing the place I live in with lodgers. If you're happy with this arrangement though then fine. You are already heavily invested in property, is it really worth investing further in this area?

I also have a BTL, but it's quite different from the usual rental. I have a two family home that I bought in the 1990s and I rent out the ground floor. It has also increase in value substantially and provides monthly income. However, it has also cost me a lot of time and money in repairs and dealing with renters issues. As the OP is already renting out rooms in their house I see no reason why they would add a BTL rather than paying down their current mortgage debt or investing in pensions and ISAs.