Advice on Buy To Let Please

LULULU1

Hello,

I currently own my own home which is valued at approx 200k. I have a 75k mortgage.

I am thinking about entering the Buy To Let market as I have offered 130k for a property which is person is in urgent need to sell. It is the market for 165k.

Based on the above senario would it be a sensible move for me to make.

I would need aprox 80% BTL mortgage, the other 15% I would rasie against my current property.

_Andy_

Why the multiple threads?

dunstonh

I am thinking about entering the Buy To Let market

Top of a bubble with income to affordability ratios which are just below the peak of the last property crash. Make sure you understand the consequences as borrowing to invest is a high risk transaction.

Plus the Govt are abolishing taper relief on capital gains next years which means that long term gains are likely to be hit heavier than the current capital gains position. Although it may take another 10 years to see any gain.

I would need approx 80% BTL mortgage, the other 15% I would raise against my current property.

A lot of lenders are dropping back to 75%, not including new builds or first time landlords and require the rent to be well above the mortgage costs.

Based on the above scenario would it be a sensible move for me to make.

You haven't mentioned rental yield so there is no way for us to know if its a good thing or not. However, you appear to have insufficient savings for a deposit so that would also give you no emergency fund to cover empty rental periods, a bad tenant, maintenance and repairs etc.

So, based only on the couple of lines you have written I would have to say no, it is not a sensible move for you to make.

silvercar

May be better to buy at £130k, tidy it up and sell it on. That is if it is definitely worth £165k and can be sold quickly.

Otherwise you have to think that you are borrowing 95% of the purchase price, if the rent wont cover this borrowing costs and the other costs of renting a property all you would be doing is subsidising your tenant and not making any money for yourself.