Can I possibly buy 2 properties???

want2bmortgage3

I currently own a 2 bedroom property, very similar one on the market for £172k at the moment so I'd hope mine is worth 170k.

My mortgage is around £104k. including 4k of overpayment which i can borrow back instantly.

Ideally I want one property to live in and as a buy to let, which eventually would become my retirement fund.

So I'm thinking I could sell my current place and buy 2 x 1 bedroom flats.

Does this sound feasible???

phil_b_2

Doesnt sound like a good idea to me dude...

Firstly, property isnt looking so hot as an investment right now, secondly, what other properties are on the market for doesnt mean much if they arent selling, and you could be in for a rough ride getting rid of your house for the price you want.
Thirdly, 1 bed flats are on shakey ground IMO. they are probably the least desired property type? Wont fair well in a market downturn.

The_Prince_3

want2bmortgage3 wrote: »

I currently own a 2 bedroom property, very similar one on the market for £172k at the moment so I'd hope mine is worth 170k.

My mortgage is around £104k. including 4k of overpayment which i can borrow back instantly.

Ideally I want one property to live in and as a buy to let, which eventually would become my retirement fund.

So I'm thinking I could sell my current place and buy 2 x 1 bedroom flats.

Does this sound feasible???

No, no, no and no.

Firstly, 'on the market for' and 'worth' are two entirely different things. If you can't find a buyer, it is worth nothing.

4k overpayment you can BORROW back?

I'm too tired to go through all this now - have a good look through the other posts in this forum and the House Prices forum.

My advice? Get yourself a proper pension plan and overpay your mortgage every month. Being debt-free is the end game.

Anyone who seriously considers Buy To Let now is a mug.

Goodnight.

lostinrates

I was always told the best way to pension plan was the three ps.

Property,
pension
portfolio

You have some security in yur property, I'd concentrate on payin that off and then worry about having two, and balancing the other two p's.

I think the theory is that if one probably will let you down, two of the three are unlikely too and one will probably be bouyant.

beer_tins

The_Prince wrote: »

No, no, no and no.

Firstly, 'on the market for' and 'worth' are two entirely different things. If you can't find a buyer, it is worth nothing.

4k overpayment you can BORROW back?

I'm too tired to go through all this now - have a good look through the other posts in this forum and the House Prices forum.

My advice? Get yourself a proper pension plan and overpay your mortgage every month. Being debt-free is the end game.

Anyone who seriously considers Buy To Let now is a mug.

Goodnight.

Why? House prices have dropped, rents have gone up a lot (less people being able to buy, more people stepping off the ladder). If the rent covers the mortgage, you can afford the mortgage while the house is empty, you have the money for a deposit and can afford to stay in it for the long term, it may well be worth doing. Buy to let could be a good investment for those that have the cash and can afford to sit tight, especially with rents being as high as they are.

It really depends on your situation. If you want to do this short term, don't have much money for a good deposit etc. BTL would be a terrible idea.

jaype

Hmm. House prices have dropped a bit, but the consensus is that inflation is rising, interest rates may go up now, and banks are still not reducing mortgage rates. In short, you'd be better off putting the cash in the bank rather than all your future nest eggs in the property basket. And dont forget that two flats means two lots of fees and stamp duty coming out of your 60-65k (if optimistic) equity. Say that's 10k total, you now have 25k only to put down on each future building, which may reduce in value and so drop below the 20% equity mainstream lenders currently require, leaving you paying SVR with high monthly repayments, rent not covering this... it's a huge risk, IMHO.

beer_tins

Agree about not putting all your eggs in one basket. Just saying for some people it's a good time to BTL. A balanced retirement portfolio is the way to go, but it can include more than one property depending on how much wonga you have!

Of course, a main aim is not to have outstanding equity by the time you retire, as this is more risk than you should be taking at that time in your life.

beer_tins

OP, what other retirement investments do you have? How much would you have left to pay off by the time you retire? You want to avoid over-exposure to the property market.

Reading your original post saying you want this to "become my retirement fund", implying you have no other investments, private pensions etc.? If that's true then this is probably a bad idea in your case.

lostinrates

beinerts wrote: »

Agree about not putting all your eggs in one basket. Just saying for some people it's a good time to BTL. A balanced retirement portfolio is the way to go, but it can include more than one property depending on how much wonga you have!

Of course, a main aim is not to have outstanding equity by the time you retire, as this is more risk than you should be taking at that time in your life.

Of course, I agree, could be multiple properties, but remaining balanced is key. Going into an era of hgher interest rates on repayments it would be risky to increase repayments and equity in a property IMO. Bearing in mind the Op's house price is relatively modest, and with 4 k of overpayment (well done OP) thats great, OP is doing OK with current liabilty, but 4k peryear over payment -not sure whether thats the maximum op can to free of penalty- still means OP could feel the pain f a newer mortgage. OP doesn't discuss other pension planning in the post so I think its relevant to discuss, as we have, balancing the pension planning and suggesting increasing equity in home 1 might be considered sufficient on the kin of amounts OP is discussing:o

Whatever you decide OP good luck , I'm getting very into pension planning ATM (as we have no property investments, lol! so are equally unbalanced!)

SquatNow

want2bmortgage3 wrote: »

Ideally I want one property to live in and as a buy to let, which eventually would become my retirement fund.

So I'm thinking I could sell my current place and buy 2 x 1 bedroom flats.

Does this sound feasible???

Depends on how stupid you are and how much money you want to lose.

Sorry, that's not fair. If you are even asking the question then you are clearly far too stupid to understand that answer. Yes go ahead and buy as many BTL properties as you like.

Don't worry, all this House Price Crash stuff in the news, the papers, the TV, the radio, the estate agent, the banks, it'll all blow over.

House prices only go up! Wahey!

(Some people just deserve to lose all their money)

beer_tins

Very constructive squatnow.

Someone asks for advice and gets the reply "you are stupid".

House prices are only one factor. If you have enough for a decent deposit, don't have all your money in property, the rents cover the mortgage payments (with rising rents this is the case in many areas), it doesn't matter. If you can hold onto it and want it as an investment for generating future income in retirement (rather than speculating on the price), it doesn't matter one bit what the house "value" is. You might plan to never sell it and only be in it for the income.

As part of your retirement portfolio, it could still be a good thing (see above posts), just don't over expose yourself.

What's right for one person isn't right for another.

Your point of view only takes into account the value of the house when buying and selling and is quite blinkered. For those not looking to ever sell, it's fine as long as the numbers add up.