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    • Lonestareagle5
    • By Lonestareagle5 15th Apr 18, 5:31 PM
    • 2Posts
    • 0Thanks
    Buying a new house but keeping the old one advice
    • #1
    • 15th Apr 18, 5:31 PM
    Buying a new house but keeping the old one advice 15th Apr 18 at 5:31 PM
    Hi all,
    Need some advice. My girlfriend has a property and so do I. We are looking to buy our first home together but believe we will be able to keep our original properties becuase we have some good equity in them.

    My property worth £230,000 with 90,000 left to pay
    Her property worth £350,000 with 150,000 left to pay.

    We feel thereís an ability to borrow against these say 100,000 each to put towards a new one.

    Does this seem like the logical approach to everyone? The idea being we rent out our originals to pay for themselves.

    Sheís currently got 4 years left on a fixed rate and I have 1 year left on mine.

    Thanks in advance for your advice.
Page 1
    • hazyjo
    • By hazyjo 15th Apr 18, 6:20 PM
    • 10,361 Posts
    • 13,423 Thanks
    • #2
    • 15th Apr 18, 6:20 PM
    • #2
    • 15th Apr 18, 6:20 PM
    Well, I'd not want to be a landlord so would sell both and buy for £340kish without a mortgage, or more than that with a joint mortgage.

    Did you both plan to be landlords? Do you know what's involved? Could you pay two or three mortgages if tenants didn't pay? Is there a demand for your type of properties (or is the market flooded with them?).
    2018 wins: Single Malt Whisky; theatre tickets; festival tickets; year of gin(!); shoes
    • Slithery
    • By Slithery 15th Apr 18, 6:45 PM
    • 666 Posts
    • 1,031 Thanks
    • #3
    • 15th Apr 18, 6:45 PM
    • #3
    • 15th Apr 18, 6:45 PM
    Have you looked into how much switching both of them to BTL mortgages will cost you?
    • G_M
    • By G_M 15th Apr 18, 7:05 PM
    • 43,847 Posts
    • 51,841 Thanks
    • #4
    • 15th Apr 18, 7:05 PM
    • #4
    • 15th Apr 18, 7:05 PM
    It is potentially a good idea. but as others have said, you need to do some serious maths.

    On each property you let, work out all the costs and income and income tax and capital gains tax .....etc etc.

    Factor in the stress/time of being a landlord.

    Review what equity you can release and what flexibility that gives you re the new home. Bear in mind the extra SDLT you'll pay as 2nd home owners.

    Then balance all that against the alternatives eg

    * selling one, or both, properties, and using the money to buy mortgage-free. Or a bigger/nicer home
    * selling one or both and investing. Could you earn more, with less stress?
    * selling one or both and starting a pension.

    Looking just at one option in isolation is no good. You need to evaluate against the alternatives.

    See also
    * New landlords: advice, information & links

    * Letting agents: how should a landlord select or sack?
    • Cakeguts
    • By Cakeguts 15th Apr 18, 7:12 PM
    • 4,180 Posts
    • 5,909 Thanks
    • #5
    • 15th Apr 18, 7:12 PM
    • #5
    • 15th Apr 18, 7:12 PM
    Also factor in that just because you like the property to live in it doesn't follow that anyone will pay you to live there. Sometimes properties that you would buy to live in are the same ones as properties you would buy to let but quite often they aren't. If they aren't then you won't get the best tenants and if you don't get the best tenants you could get strings of people who don't pay the rent or break things. So you have got to be able to pay the mortgage if you are not getting any rent.
    • loveka
    • By loveka 15th Apr 18, 8:08 PM
    • 384 Posts
    • 358 Thanks
    • #6
    • 15th Apr 18, 8:08 PM
    • #6
    • 15th Apr 18, 8:08 PM
    You may be able to get consent to let and stay on your current mortgage deal/s with your lender.

    After that, you would have to go on a buy to let mortgage.

    We are accidental landlords in a similar way. So far we have been lucky with tenants. In 18 years we have had the place trashed and rent unpaid once. Other than that, great tenants.

    Adhering to the rules on gas safety etc isn't too bad really! You just have to keep on top of it.

    I think I might be inclined to sell one and keep the other though. But I can see you probably want one each?
    • Thrugelmir
    • By Thrugelmir 15th Apr 18, 9:39 PM
    • 58,226 Posts
    • 51,586 Thanks
    • #7
    • 15th Apr 18, 9:39 PM
    • #7
    • 15th Apr 18, 9:39 PM
    We feel thereís an ability to borrow against these say 100,000 each to put towards a new one.
    Originally posted by Lonestareagle5
    Will your incomes support a combined mortgage debt of £440,000 ?
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • shirlgirl2004
    • By shirlgirl2004 15th Apr 18, 10:02 PM
    • 2,800 Posts
    • 4,484 Thanks
    • #8
    • 15th Apr 18, 10:02 PM
    • #8
    • 15th Apr 18, 10:02 PM
    I wouldn't discount the idea but the tax is becoming quite onerous on properties being let. I'd suggest you read up on Section 24 to see whether it's financially viable as it may well end up costing you money to keep the houses even when rented out.
    • dimbo61
    • By dimbo61 15th Apr 18, 10:13 PM
    • 9,848 Posts
    • 5,295 Thanks
    • #9
    • 15th Apr 18, 10:13 PM
    • #9
    • 15th Apr 18, 10:13 PM
    Are you both higher rate tax payers ?
    What sort of yield could you achieve from both properties ?
    What condition are the properties in ? Would they appeal to the rental market ?
    You need to speak to a Whole of Market mortgage broker who deals in BTL and maybe get yourself a good accountant who also deals in BTL.
    • Lonestareagle5
    • By Lonestareagle5 16th Apr 18, 7:42 AM
    • 2 Posts
    • 0 Thanks
    My brother in law did the same thing with his old flat which he managed to keep and has a management company. He hasnít had much problem with being a landlord. I have no problem about being a landlord.

    Ideally weíd like to keep a property each. I think both are desirable to rent but especially mine. Itís quite a rare type in my city. 1 bedroom corner home with a garden. even I snapped it straight up.

    Iím more concerned about her property. Itís well presented inside but in a slightly rougher area. So finding the right tenants could prove tough.

    I guess the next step is to speak to my mortgage bank and find out about fees and whatnot then.

    Neither of us are higher rate income payers. Iíd say combined we are on approx 80k
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