Thinking of Buy to Let

ManAtHome

Sticking all the eggs in one basket may work if you can forecast what the world will look like in 20 years time... Around 10 years ago you'd have been cursing property and getting the champers out if you were in shares...

Go down the !!!!!! or bust route and you'll retire when whatever market you're in says you can.

DGJsaver

fc123 wrote: »

Perhaps N Wales is different?
In London and SE the sums are not the same.
I rent out house in London (value £350 - £450 k who knows the true value now??? @ £1000pcm less 12.5 % agents fees + vat.

I pay £1200pcm rent on derelict 1 bed cottage (value £450k- £600k...again who knows the real worth??).

The sums work for us as our mortgage is a lot less than value and our landlord owns property outright.

I am NO expert but I would say BTL supported by MEW = NOT a good move right now....still reeling from watching repo auction today.

The cost of the MEW (or lost interest on savings used as a deposit) plus the interest on the mortgage should be taken as a whole too.

Only my humble opinion as a layman BTW.

To mention London and almost ANYWHERE else in the UK in the same breath when it comes to renting/house prices is pointless

Anyway , i aready pointed out the prices in MY area for interest sake..

seven-day-weekend

Speaking as someone who has only ever rented ONE mortgaged property, (don't do it any more) I would say that unless you can make a good profit from the rental it is not worth doing because there are always expenses such as insurance, gas certificate etc to fork out on, the tenant may need a new fridge, it will need decorating in between tenants and of course some tenants trash the place and/ot don't pay their rent. You have to pay your mortgage whether you have a tenant or not.

We sold our investment property as it was costing us money (two-bed flat, not new build),however I'm glad to say we did benefit from a good rise in value and made a nice profit, but even that doesn't apply any more.

Just my two pennorth!

poppy10_2

Just out of interest mikeovpc, what has made you develop an interest in BTL? Are you expecting a monthly income, capital growth, or something else?

fc123

DGJsaver wrote: »

To mention London and almost ANYWHERE else in the UK in the same breath when it comes to renting/house prices is pointless

Anyway , i aready pointed out the prices in MY area for interest sake..

Not really pointless.
If you have the cash in the bank to go into BTL, the considered opinion on this forum seems to be you could get a better return doing something else with the cash.

If you are intending to fund the investment with borrowed money, then best be very careful.

Areas can vary but overall, if increases spread to all areas, well so can decreases. N Wales is no different to any other area in the long run....perhaps
excepting prime Central London and Sandbanks?

Sapphire

sarkin wrote: »

You need to put a 15% deposit down. If you dont have the deposit just remortgage your house for the deposit and associated fees, this is what most people do.

If you are looking the best type of property is new build flats as the builder will offer you a discount off the purchase price, throw in white goods and some times contribution to the mortgage or all 3 if you are lucky.

I can't believe that someone can be giving out such advice at this time, when the signs are that there is going to be a not inconsiderable crash and that people are over-borrowed to a massive extent! :rolleyes:

The suggestion to 'just remortgage your house for the deposit', thus taking on a large debt at an uncertain time for the economy, is plain irresponsible. And to suggest that the best type of property is newbuild flats is equally staggering.

Do you have a vested interested interest in this area that encourages you come up with these suggestions? :cool:

Trollfever

At auction on Thursday new-build repo flats were selling at around half their purchase price.

I bet nobody had actually lived in them!

jamesd

mikeopvc, if you do go ahead with this, note that BTL mortgages are more costly than residential and it's cheaper and entirely acceptable to HMRC to take out or increase the mortgage on your own property at cheaper residential rates to buy the BTL property. You can borrow up to the purchase price paid and lend it to the BTL business. Mortgage interest on this, but not any capital repayments, are deducted from your rental income when working out the profit or loss of the business. If your own place doesn't have sufficient equity you can use whatever there is and fund the rest with a BTL mortgage on the BTL property.

While regions do vary, now's looking more like a time to wait than a time to buy. Unless you can buy for a truly low price.

izzybusy23

mikeopvc wrote: »

Hi everyone,
my wife and I are thinking of entering the world of buy to let but just wondered if we could get some sound advice from these forums first.
We obviously are aware that there are risks involved but also some advantages. Were not afraid of a bit of hard work and thought we could get a interest only mortgage on a local property and rent it out for a little more than the mortgage, is this a good time to star on this type of project or should we wait untill the market gets a bit more stable?
Were not looking for a step by step guide here but just a few tips (good or bad) from people who may have done the same. I suppose we are hoping that if all goes well we might eventually aquire a couple more properties in the future to secure a decent retirement as we don't really go for pensions.
Any advice greatly recieved,

Thanks in advance

MIKE

:rolleyes: Whats that saying? A fool and his money, etc etc, blah blah blah

izzybusy23

mikeopvc wrote: »

I live in North Wales, we have checked the local papers and there are quite a few properties for sale at around £100k - £125K which we feel we could get £550 - £600 pcm for. These properties are obviously going to need a bit of work but we are prepared for this and more than capable of doing it ourselves as long as it's more cosmetic than structural.

Mike

Sorry, didn't mean to thank you for this post. North Wales has no jobs, so who do you think is going to rent your house? People from North Wales, from my understanding, hate people buying up their property and taking it away from the locals so how do they feel about BTL 'speculators' doing the same thing?

Whereabouts in North Wales as I know the area well after living on the border over in Cheshire....