buy to let pros/cons

ard123en

At the mo im not a house holder as I have cheap logings, but plan to be in the future with my girlfriend

I have a few K from a house I sold and have maxed isas mini and cash ect and cleared ALL depts

I am worried that the remaining money I have in the bank will loose its value against house prices and am thinking of buying a cheaper house as an investment

can people who have done this b4 pls give me the pros and cons also would the buy2let mortgage commitment be taken off my income when applying the my home mortgage with my girlfriend ?

jezza1O1

You'd prob want to do a little more research than a post here - sure some peeps make a few £s out of it but plenty of people lose out.

In recent times peeps have mostly been winners as the market has been such that you cant go wrong. This wont go on for ever and a few people who've done well will prob get hit quite hard when their luck runs out.

HGLTsuperstar

Buy 2 let should not affect your income consierations for a home mortgage, as a buy to let is valued on the expected rental income of the let property, typically the rental should cover 125% of the mortgage to allow for the odd month in between tenants etc.
There are a number of tax benefits from a B2L but your main focus should be on rental income to meet mortgage, repairs and then income, so it does depend on your area and what call there is (i.e. is there a large student population?)

FaTB

ard123en wrote:

I am worried that the remaining money I have in the bank will loose its value against house prices and am thinking of buying a cheaper house as an investment

Why are you worried about this ?

You will earn interest in the bank albeit fairly small amounts, but if you buy property now you're almost sure to lose money.

At best house prices aren't moving anywhere for the next few years. ( so no capital gains )

At worst house prices may drop by 25%. How is that an investment ?

There will be a good time to buy property, and it will again become a good investment, but not at the moment !!

Rave

I agree. Maximise the amount of interest your cash is earning and wait and see. With prices as high as they are, with rents not covering mortgages in most cases and with little to no prospect of future capital gains property looks like a poor investment right now.

I'm reading a book about crashes* at the moment and I'm increasingly convinced that the BTL speculators who got in late are going to get spooked pretty soon and start selling:).

*Here. In moneysaving fashion I got it free;).