Starting my empire! Buy to Let mortgage.

Sigibbons

Im turning 21 in august and have a decent stable career ahead of me so i am thinking its never too early to get some assets under my belt.
I would like to buy a Studio flat to rent.

Figures:
Gross pay £16000
Flat value £70,000
15% deposit needed on buy to let mortgage = £10,500.
Estate agent says flat would bring in £450-520 PCM.
My rent at is £140 PCM living with family.
Other expences per month are petrol and phone.

I was wondering if, as i don't have the £10,500 for deposit its possible to get a long term loan for say 15 years or so for the deposit and then apply for a mortgage? I have completed the quick mortgage calculators and it doesnt seem to matter if have a loan or not so i dont see why this would be a problem?

Anyone expand on anything ive missed please.

Many thanks, Simon.

Retired_I.F.A.

a. There is no such thing as a stable career.
b. A buy to let is a mugs game, check out how many bankrupts were buy to let landlords. Then treble their number in the next few years.
c. What your saying is you want a 100% mortgage for a buy to let. :rotfl:

homer_j_3

16k a year = 1k per month.

Save half of it for next 2 years and get 12k under your belt.

See if you made a good decision or a great decision. Property prices are not going anywhere fast and flats are the worst investments you can make at the moment imo.

If you can't save a deposit, when you have so much disposable cash then you should not be looking at a mortgage at this stage. You need to learn to save and get used to not having this money. Consider the flat being empty or needing to fund repairs etc.

Trollfever

Have you prepared a business plan and a cashflow forecast?

Sigibbons

I have heard Buy to tlet is getting more difficult but people must still be making or equaling their mortgage payments, leaving them with profit each month or breaking even and at the end have an asset to borrow against.

I am a carpenter so i am pretty certain there will always be work for me, this also means i can do pretty much all the work to propertys myself.

I did prepare a monthly profit and loss statment and i have 550 a month disposable income. I havent saved this income as i have never had reason to really. I do have a few shares but want to keep them in where they are.

Sigibbons

Oh also i dont know if any of you know this area but where i cam looking to buy is in a place called Boscombe near Bournemouth on the south coast, this sea side town is pretty run down at the moment but is having the first artificial surf reef in europe built there ro rival the likes of newquay aparently. Also the peir is being redeveloped so i really think property prices are likely to rise here in the next 10 years or so.

SouthCoast

Are there many empty flats in the Boscombe/Bournemouth area?

andysstuff_2

OK do the math £10,500 over 10 years is gonna be about £100 pm. £59,500 interest only mortgage is gonna be around £300 pm, giving a total of £400 PM. say you make towards the top end of your estimate, £500pm. Time loans are paid you've got £100 pm left to pay agents fees - 10%-15% of the £500, say £50, Ground Rent, maintenance and buildings insurance likely to be another £50pm. Without allowing for voids at best you are going to break even.

Don't bet on prices rising too much over the next ten years. People, especially agents, will always tell you why your own particular area of the country will fare better than everywhere else in a downturn. I live along the coast from you and see the same thing in the local rag week in week out, but the truth of the matter is that flats, especially a studios are likely to be hit harder and for longer.

If you wanna make some money and are a half decent chippie, get together with an electrician or plumber, and buy some repossessed wrecks and do them up, it's much more likely to turn a profit.

Trollfever

In uncertain times cash is king.

beingjdc

That rent assumption looks very odd to me. I don't know anywhere in the country where a studio flat rents out for £500 a month but can be bought for £70k. Whereabouts are you?

Zebedee69

BTL as a way to make money is under fire at the moment. However if you do your maths properly, think logically about the properties you want to own you should make a profit and start to build a collection of propeties.

By the way dont listen to the first poster. This person probably lives in a council house somewhere because they never tried hard enough or didnt study enough in school. You have a decent career and thats the first step to sorting your money out, both where its comes from and where it goes. Have you also thought about running your own little business on the side?.... Are there things in your industry you could run part time such as a website or something you wouldnt have to be there 24/7 to run?... What im saying is dont buy loads of BTL's and leave yourself open. Maybe buy 1 or 2 BTL's and also have a little business on the side and your main job.

Little incomes from many sources are safer than one giant income from one thing that could go tits up tommorow.

Just be sensible and always think of the money. Your not buying your dream home, your buying the home that will become a decent investment and earn you a decent profit.