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Thank you for your replies, they are helping me see the situation more clearly. It is useful to hear that property is not necessarily the best long-term investment.
Financial advice is something he is arranging, but we were curious to learn a bit more sooner, hence the thread.0 -
This thread may be better off in the Pensions & Retirement board or the Savings & Investment board.
Does your boyfriend have a pension? He should look into that too.
Property can provide a decent income but it's by no means straight-forward or without risk. You may find you're spending more than you're earning in rent when you have a small deposit. The difference between the mortgage payments and rent can quickly get eaten up by maintenance issues and rental voids (time where you have no tenant) or tax (if your boyfriend is a 40% tax payer the tax relief he can claim on mortgage payments is reduced). If you get a bad tenant and/or have some major maintenance issues you could go a year or two spending major money on the house.
A lot of the return in BTL in the past has come from house price inflation, not the regular income it provides.
It sounds like he's just decided property is the way to go without really understanding it. He needs to read up on what being a landlord involves, the various tax implications (extra stamp duty if he buys another house, capital gains tax to pay, the tax treatment of maintenance costs, mortgage insurance costs and how this changes if you move into the 40% band etc), understanding the financing and the risks.0 -
Yes! I did struggle to decide where to post this query
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TiredDonna wrote: »Re Buy-to-let mortgages, my boyfriend understands that you already need to be home-owner/have a mortgage.
The friend is not a letting agent something to do with conveyancing.
He would certainly be open to other investments if they could be readily converted in to a roof over his head should he need one.
Well this investment would take 40 weeks before he had a roof over his head, and that's after the fixed term expired....
Most other investments don't take that long to liquidate.0 -
At a minimum. If tenants have just signed a new 12 month contract it could take up to 18 months to get rid of them.
That's not liquid at all.0 -
Yes, I can clearly see I shouldn't have used the word "quickly" and have been taken to task for that.0
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Or "readily" which is what I did say, and I was thinking in comparison with his pensions.0
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Your friend has checked his state pension situation?
https://www.gov.uk/check-state-pension
He has several pensions and is currently contributing to a pension?
Would he consider buying a home in an attractive location which would be his PPR ?
He would register all his bank accounts there/ be on electoral roll there.
There would be nothing to prevent his staying with you during the week/as and when convenient or your staying with him at weekends/as and when convenient?
A family member owns a house (PPR) in the north, is there at week ends and on work from home days but lodges closer to work in the south on other days.0 -
A mortgage broker can advise him best as there are a few lenders who will offer a BTL without him having to own a property before or be a residential mortgage owner.0
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Hi xylophone, using two houses between us is a good idea. I could certainly get behind the idea of a doer-upper in the Peak District!
What do you mean by "has he checked his state pension"? What would he be checking for? We both anticipate not being able to retire until we're 70+.0
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