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buy to let, is it worth it?

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darrrren
darrrren Posts: 28 Forumite
in House buying, renting & selling
Hi everyone. I browse here regular but only post every so often. As it stands,i turn 28 next month, and i have 36k left on my mortgage. My salary is about 29k a year. I've had my house three years next month and have over paid on it since I've had it using my 10% over payment allowance each year. I have about 12k in stocks and shares isa, and a mutual fund which i want to keep going. What i normally do is save in my normal Isa, then when there's a big lump i overpay the house. I've worked out i can pay the remaining mortgage off by my early thirties, and im trying to gain some guidance. I've always said to myself, pay off my house first, then get another and let it out, so i only have one mortgage at any time. Another part of me is wondering instead of overpaying, am i better using that money and saving for another deposit, and get a buy to let. This would be more risk having two mortgages. A guy i know has 4 houses he rents out but obviously they all still have mortgages on them. My mum says buy to let is full of horror stories and to sta
Y as i am. I just want maximum return for an investment, and although im happy as i am ticking along, i know with risk there's more potentiol for bigger earnings. However just overpaying my house saves me 30k in interest alone on my house over the period. Any input and stories appreciated.
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  • quotememiserable
    quotememiserable Posts: 590 Forumite
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    What returns are you seeking? BTL doesn't pay that well anymore, maybe 7 or 8% and then you have voids, maintenance, tax on the income, higher rate stamp duty, so it's hardly worth it my book.
    You can go property another way, by investing with housecrowd or picking the property investments from thincats.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Do you have adequate pension provision? Owning a single BTL isn't a diversified portfolio. Coupled with your existing residential property that means a lot of your wealth is at the whim of the UK property market. Only risk what you can afford to lose.
  • Cakeguts
    Cakeguts Posts: 7,627 Forumite
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    Get onto Rightmove and check how many houses are available to let that would be in the price bracket of what you could buy. I am a landlord an where our rental houses are there is a shortage of 3 bed houses but a huge choice of 2 beds of all kinds. If you bought a 2 bed in that area you would need to expect void periods if you bought a nice 3 bed you would have fewer void periods if any. The nice 3 beds are a lot more expensive than the 2 beds. You can easily check the situation where you live.
  • darrrren
    darrrren Posts: 28 Forumite
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    My pension is ok as im a member of the armed forces so will have a decent pension. I'm just trying to make my money work as hard as possible for me so i can retire early. I always see stories of people striking it rich with buy to let but im not sure of the ins and outs. What's this other thing that's been mentioned here where you,invest over a few properties? How does that work using one of the websites?
  • elephantrosie
    elephantrosie Posts: 467 Forumite
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    does renting out property via a limited company help?
    Another night of thankfulness.
  • darrrren
    darrrren Posts: 28 Forumite
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    As in a letting agent?
  • 00ec25
    00ec25 Posts: 9,123 Forumite
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    darrrren wrote: »
    As in a letting agent?
    no. he means set up your own Ltd co, let the company buy the property so it can claim the tax relief available to a company. You then take the money out of the company

    lots of threads on here with pros and cons about owning property via a company. Use search function. Lots of extra expenses. some tax savings, can be more tax efficient in certain circumstances, not in others

    since you looking for an investment, not a lifestyle, why pick on being a landlord? You have to work at being a LL.
  • darrrren
    darrrren Posts: 28 Forumite
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    I'm not familiar with the setting up of ltd co. I've not heard of that ill read into it. We'll being in the military i thought a property may be the best move forward as a long term invesment. My thoughts were a house, get it sorted. Rent it out, having rent cover the mortgage,then when i finish my Time here sell up and have a lump some along with the lump sum the army pays after 22 years. At the moment however im overpaying the mortgage as the interest is 4% and i don't get anywhere near that on any accounts i have, s's isa or mutual funds, and obviously these change often. I guess I'm just wondering if i could be squeezing a bit more from the money. I want to retire early with a comfortable but not extravegent lifestyle. I see alot of people making it got through property, going from nothing, to rich in a few years.
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
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    https://audioboom.com/posts/5793636-sell-up-hold-or-expand
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
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    darrrren wrote: »
    I'm not familiar with the setting up of ltd co. I've not heard of that ill read into it. We'll being in the military i thought a property may be the best move forward as a long term invesment. My thoughts were a house, get it sorted. Rent it out, having rent cover the mortgage,then when i finish my Time here sell up and have a lump some along with the lump sum the army pays after 22 years. At the moment however im overpaying the mortgage as the interest is 4% and i don't get anywhere near that on any accounts i have, s's isa or mutual funds, and obviously these change often. I guess I'm just wondering if i could be squeezing a bit more from the money. I want to retire early with a comfortable but not extravegent lifestyle. I see alot of people making it got through property, going from nothing, to rich in a few years.


    The tax environment for BTL has changed recently though.....


    https://residentiallandlord.com/landlord-tax-section-24/
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