First Time Buyer Buy to Let. Sensible?

Phonix

If you do decide to let (a good idea IMHO), there's a company called Online Tenancies who reference your tenants and create a tenancy for you for free. Myself and 2 colleagues of mine have used them recently and they were v.good. Their web site is https://www.online-tenancies.co.uk

Interesting first post!



Might this be your business by any chance?

odorus

Doozergirl wrote:

I think this is a bit naughty but if your mortgage company don't know it's a BTL, I don't think they mind?

Mortgage companies have a clause in their residential agreements about sub letting. They usually require you to inform them. If you don't then your bank could insist on you getting your tenants out, and you would be left paying the mortgage.

I am a landlord with two flats. One of which I'm trying to sell, as the Managing agent for the flats have forbidden anyone from subletting due to problems with tenants. They often also require, within the leasehold agreement, that you inform them of the let and that your Mortgage Company are aware of the let. The managing company reposessed one of the flats in my block as the Leaseholder refused to obey the rules reguarding letting only to professionals. If you look at flats try to get one where the leaseholders all have a share in the freehold. My second flat has that situation so we are incharge of the whole block and don't have to pay ground rent.

If you are going away I would suggest using a reputable letting agent (they do exist) to manage the place if you don't have someone you know to do it for you. I have a contract with British Gas so if anything goes wrong with the gas, plumbing, or electrics my tenant calls them up and they will come and fix it. I only live round the corner but it means I won't get a call in the middle of the night.

As Natelle said research the area and use your head not your heart. You will not live in it, for the moment anyway. Speak to Letting Agents find out what properties are in short supply, then look for those. Look in the popular areas close to train stations, schools etc.

Doozergirl

As I said, I'm sure it's a little naughty, but if you only have one mortgage, the assumption would be that you live in that house. Surely there must be thousands of people out there who rent out their only property and haven't told their mortgage company, without consequence?

I would think, if you were looking particularly for a student let, you should be looking at freehold houses with two reception rooms so that extra rent can be obtained from an extra bedroom. I don't think blocks of flats with ownerous freeholders are ideal as you stand to encounter high service charges and these properties would also command a different type of tenant.

I agree whole-heartedly that if looking at flats, ones with a share of the freehold are much better. Those that own the freehold stand to make a profit from you and that's not very money saving!

MissSunshine

Doozergirl wrote:

As I said, I'm sure it's a little naughty, but if you only have one mortgage, the assumption would be that you live in that house. Surely there must be thousands of people out there who rent out their only property and haven't told their mortgage company, without consequence?

It probably does happen a lot, but what if OP was unlucky enough to have a fire in this house with a tenant living there whilst he is overseas

There are lenders that do expat buy to let mortgages, but deposit can be between 5-25% :eek:

Personally we sold our UK properties, we both rented out whilst living in the UK and couldn't be bothered with the hassle once we moved overseas as in my exp letting agents aren't much better than estate agents

As already said do a bit of research in the area you're thinking of buying in and weigh up the costs v hassle, you might be just as well putting your money in high interest (offshore) account

odorus

MissSunshine wrote:

As already said do a bit of research in the area you're thinking of buying in and weigh up the costs v hassle, you might be just as well putting your money in high interest (offshore) account

The hassle factor of owning a BTL is big if you are abroad. Last year I was in the U.S for 3 months, and dealing with the letting agents from that distance was not ideal. I couldn't just pop over and sort out the problems.

My mums old neighbour rented to students, but lived in the U.S. When he got back he was presented with a trashed house, and that was with a letting agent supposedly taking on full management. Needless to say he sued them, but do you want the bother.

tomS_4

Just wanted to thank everyone for their advice. (i only just remembered i posted this and came back to check!! oops)

After looking around for a bit I'm starting to agree with the general impression here that it might not be worth the amount of hassle and risk. I'd hoped I'd just be able to leave it all in the hands of the letting agents, but I'd hate to have to try to deal with problems from abroad.

The idea of a nice big investment sitting at home paying for itself IS a tempting one though, and I've noticed that although everyone has been unsure about the market for years it does tend to keep rising. But if it averages out at 2.5% a year then I would be better off putting it in a high interest savings account for a year or two.

My landlord in a shared house with 4 tenants (one in the ground floor front room as someone metioned) is selling the house (might be telling!) but as i work it out:
House value = 145000, mortgage=13500, repayments=800pm(inc bills & tax), rent=300x4=1200, admin@10%=120 - so as long as the monthly bills come to less than 380 I'm getting the house for free and (assuming the market goes up by 2.5% long term) getting a 2.5% interest on 145,000 rather than a 5% interest on 10,000 savings.
Short term price rises (or not) wouldn't matter as long as the rental market didn't disappear and leave it empty.
Thats probably competely wrong.... ;-)
What about london prices with the olympics?
Thanks again everyone, sorry for the dumb questions.. i'm slowly starting to do a bit of research.