Advice needing

GavCB

don't forget that you'll have to pay the higher rate of 'stamp duty' for a second property.

Albermarle

Have you looked into all the duties and legalities of being a landlord.

Also you are for sure not guaranteed to even make a profit, and if things go badly wrong, you will have wished that you had sold it .

itsthelittlethings

I would suggest that if you can’t even get the mechanics of buying a second property right you may not be well equipped to be a landlord.

twopenny

First find out what you need to spend on your current property to make it legally suitable for renting.

The cost of a company to run it. The cost of letting insurance. What you could charge. What the income tax would be. What the council tax would be. And the rest of it.

Then the new house. Extra stamp duty. The financial side if you sold one of these houses.

You've got a lot of research and sums to do.

Would be easier to focus on what you can do to your current place to make it more desirable to potential buyers.

dinosaur66

you would have to change your current mortgage on the flat you live in and wish to rent out to a buy to let mortgage

these are interest only mortgages

you would need to own 25% equity in it

and pay a fee upfront for a five year fixed otherwise standard interest on a buy to let mortgage would be just under 8%

not looked it up but i would guess 4.5% would be norm now for a fixed rate

with fees and repairs and tax only way this is viable for you would be if you have 80% equity in the flat

off top of my head fees you would have to pay

new solicitors fee not sure here maybe £200/300

stamp duty 5k for a 100k flat

arrangement fee and new bank fees 2k

landlord insurance.

eicr test £150

epc test £60 And hope its a grade C

boiler saftey cert £100

you are only allowed to claim 20% of your mortgage intrest as tax relief and have to pay full tax on the other 80% even though its not profit

5 tax returns a year depending on your income

and then maintence charges for door locks/ windows/boiler repairs/electrics/tap leaks /etc etc

IMO with all the new rules in place and the new rules to come ,people starting out to become a small time landlord is gone / its soon to become a proffesional only sector with small time landlords selling up or waiting for tenants to leave and selling but very very few buying additional propertys to rent out

_Penny_Dreadful

https://forums.moneysavingexpert.com/discussion/comment/81862132#Comment_81862132

How much equity do you have in the flat? As a rule of thumb a let to buy mortgage would allow you to release equity from the flat with an up to a 75% LTV mortgage. The rent received should be 145% of the mortgage payment or the rental property will reduce how much you can borrow for the new home.

You’ll also have to factor in paying the higher rate of LBTT/LTT/SDLT on the purchase.

ReadySteadyPop

https://forums.moneysavingexpert.com/discussion/comment/81862185#Comment_81862185

It is a bad idea to get into more mortgage debt, there is an uptick in landlords going bust, do you want to owe the bank more than one mortgage debt and find you can`t get tenants or the tenants won`t pay? Pay down your existing debt and investigate stock market investment instead.

saajan_12

https://forums.moneysavingexpert.com/discussion/comment/81862185#Comment_81862185

https://forums.moneysavingexpert.com/discussion/comment/81862190#Comment_81862190

Whats the rationale for getting into the business of letting then - rather than side hustles that you have an interest and expertise in?

For us to advise, some numbers would help, though that still doesn't make it a good idea unless you can research further yourself.

• Whats the flat value
• Whats the flat mortgage balance
• Why do you think ithe flat has gone down and how much?
• What is the cost of the new property you'd buy?
• What is the expected rental income at the flat ?