Buy 1 place to let & 1 to live in?

jakesballs

Hi Everyone,

I've been lurking about on the site for ages and picked up plenty of tips, but I've never had cause add my thoughts. However, given my current home situation I'm trying to be creative. Me and OH bought our first flat in August last year, which is fine for the moment. However with the prices not looking too strong our aim to upsize in two years is looking more and more remote.
So my question is, would it be possible to let this place out (which should cover the mortgage and then some) and somehow take out/extend the mortgage to buy another place to live in? Effectively adding a small extra income.
I'm sure it's not that easy or lots of people would be doing it, but I can't find anything on the net and I know how good you guys are at answering the tough questions.
Looking forward to hearing from you...

subjecttocontract

The truth of the matter is that there are hardly any professional landlords buying property to let at the moment because we can't get the business equation to work.

Rents have not kept pace with rising property prices.

In my part of Essex a 2 bed flat costs around £140K and rents for around £600 a month. An 85% interest only mortgage @ 6% is going to cost £595 a month in mortgage payments......so there's no profit from rental income.

Mortgage lenders are tightening their lending criteria and most require rental income to be 130% of loan repayments.

The biggest mistake amatuer landlords make is not taking into account all of the operating costs so, they think they are making a profit but, in reality they are making a whopping loss.

The reason lots of landlords are doing well is because we bought property below market value or a few years back when prices were lower.

There are still opportunities for Buy to Let in some areas of the country but I'm personally now concentrating on properties requiring refurbishment, renovation, or redevelopment...thats where I see the opportunities.

In my opinion the Buy to Let boat has sailed long ago.

jakesballs

I had a feeling I'd be shot down straight away :rolleyes:

Thanks for your reply, to be honest that's kind of what I expected. Although rentals are high down here, the property prices are fairly steep too. As I'm not looking to start an empire it sounds though it would be tough to make much out of it. Of course, if anyone knows different let me know.

Trollfever

The time to start your property empire is when first time buyers do not have to Lie-to-Buy.

A_Nice_Englishman

jakesballs wrote: »

.....with the prices not looking too strong our aim to upsize in two years is looking more and more remote...

Surely a weak market makes upsizing easier with less extra money to find to buy the more expensive property?