Possible to BTL on a modest income?
Discussion
I'll preface this by saying I'm far from a property magnate - the OH and I only purchased our first home 3 years ago.
Between the two of us we make a fairly low wage - around 50k p.a. However we live pretty frugally (no kids etc) and in an area of the south with relatively low housing costs. We bought our house needing a lot of renovation (which we did ourselves with help from family) at 130k with a 20k deposit, and I'd estimate that we have about 35k in equity in the house at this point.
Anyhow, we are pretty good savers, and have collected 30k in savings over 3 years. We could move to a bigger house, but we don't really need the space. So I started thinking of ways to make our money work harder...
Would we be eligible to get a BTL mortgage with the savings we have? 1 bedroom flats in the area go from 65k - 100k, so, in theory, could we let a flat out to cover the monthly mortgage payment + a little extra, and cash it in in a few years' time?
Between the two of us we make a fairly low wage - around 50k p.a. However we live pretty frugally (no kids etc) and in an area of the south with relatively low housing costs. We bought our house needing a lot of renovation (which we did ourselves with help from family) at 130k with a 20k deposit, and I'd estimate that we have about 35k in equity in the house at this point.
Anyhow, we are pretty good savers, and have collected 30k in savings over 3 years. We could move to a bigger house, but we don't really need the space. So I started thinking of ways to make our money work harder...
Would we be eligible to get a BTL mortgage with the savings we have? 1 bedroom flats in the area go from 65k - 100k, so, in theory, could we let a flat out to cover the monthly mortgage payment + a little extra, and cash it in in a few years' time?
Pique said:
I'll preface this by saying I'm far from a property magnate - the OH and I only purchased our first home 3 years ago.
Between the two of us we make a fairly low wage - around 50k p.a. However we live pretty frugally (no kids etc) and in an area of the south with relatively low housing costs. We bought our house needing a lot of renovation (which we did ourselves with help from family) at 130k with a 20k deposit, and I'd estimate that we have about 35k in equity in the house at this point.
Anyhow, we are pretty good savers, and have collected 30k in savings over 3 years. We could move to a bigger house, but we don't really need the space. So I started thinking of ways to make our money work harder...
Would we be eligible to get a BTL mortgage with the savings we have? 1 bedroom flats in the area go from 65k - 100k, so, in theory, could we let a flat out to cover the monthly mortgage payment + a little extra, and cash it in in a few years' time?
Yes Between the two of us we make a fairly low wage - around 50k p.a. However we live pretty frugally (no kids etc) and in an area of the south with relatively low housing costs. We bought our house needing a lot of renovation (which we did ourselves with help from family) at 130k with a 20k deposit, and I'd estimate that we have about 35k in equity in the house at this point.
Anyhow, we are pretty good savers, and have collected 30k in savings over 3 years. We could move to a bigger house, but we don't really need the space. So I started thinking of ways to make our money work harder...
Would we be eligible to get a BTL mortgage with the savings we have? 1 bedroom flats in the area go from 65k - 100k, so, in theory, could we let a flat out to cover the monthly mortgage payment + a little extra, and cash it in in a few years' time?
Yes, you could do that, or you could take the moral high ground and just have one home, the one you need. By not throwing your money at another property, you'll be doing just a little bit to keep prices down and helping a youngster to avoid a life of debt slavery.
Not that I don't sympathise, because I'm all too aware of how it's impossible to have savings keep pace with inflation, but landlords, and the whole buy to let thing are just one of the factors in the obscene price of houses.
Not that I don't sympathise, because I'm all too aware of how it's impossible to have savings keep pace with inflation, but landlords, and the whole buy to let thing are just one of the factors in the obscene price of houses.
budfox said:
Yes, you could do that, or you could take the moral high ground and just have one home, the one you need. By not throwing your money at another property, you'll be doing just a little bit to keep prices down and helping a youngster to avoid a life of debt slavery.
Not that I don't sympathise, because I'm all too aware of how it's impossible to have savings keep pace with inflation, but landlords, and the whole buy to let thing are just one of the factors in the obscene price of houses.
As somebody currently paying through the nose for a one bed shoebox in Fulham, I can confirm the above still comes across frankly bizarre, and oddly entirely irrelevant to the question posed.Not that I don't sympathise, because I'm all too aware of how it's impossible to have savings keep pace with inflation, but landlords, and the whole buy to let thing are just one of the factors in the obscene price of houses.
Budfox: what are you smoking?
iphonedyou said:
budfox said:
Yes, you could do that, or you could take the moral high ground and just have one home, the one you need. By not throwing your money at another property, you'll be doing just a little bit to keep prices down and helping a youngster to avoid a life of debt slavery.
Not that I don't sympathise, because I'm all too aware of how it's impossible to have savings keep pace with inflation, but landlords, and the whole buy to let thing are just one of the factors in the obscene price of houses.
As somebody currently paying through the nose for a one bed shoebox in Fulham, I can confirm the above still comes across frankly bizarre, and oddly entirely irrelevant to the question posed.Not that I don't sympathise, because I'm all too aware of how it's impossible to have savings keep pace with inflation, but landlords, and the whole buy to let thing are just one of the factors in the obscene price of houses.
Budfox: what are you smoking?
Irrelevant nonsence.There is no morals involved. Someone is trying to make the best of their situation, and in the economy we live in, this is possible in a number of ways including property. An investment is an investment as far as im concerned. Yes, house prices are obscene but someone has to own the ones that people want to rent. Not everyone wants to buy a house you know Budfox.
Not buying something just because someone else may want it, is riduculous.
That being said, how much would you be making off the house OP? It is a lot of effort having a rental property! - not that I have any but I am in the industry.
budfox said:
Yes, you could do that, or you could take the moral high ground and just have one home, the one you need. By not throwing your money at another property, you'll be doing just a little bit to keep prices down and helping a youngster to avoid a life of debt slavery.
Not that I don't sympathise, because I'm all too aware of how it's impossible to have savings keep pace with inflation, but landlords, and the whole buy to let thing are just one of the factors in the obscene price of houses.
Perhaps the house will later be inherited by his offspring, saving them experiencing the life of debt slavery? There are as many good landlords as bad; I know, I'm one of them (good, that is!).Not that I don't sympathise, because I'm all too aware of how it's impossible to have savings keep pace with inflation, but landlords, and the whole buy to let thing are just one of the factors in the obscene price of houses.
selym said:
budfox said:
Yes, you could do that, or you could take the moral high ground and just have one home, the one you need. By not throwing your money at another property, you'll be doing just a little bit to keep prices down and helping a youngster to avoid a life of debt slavery.
Not that I don't sympathise, because I'm all too aware of how it's impossible to have savings keep pace with inflation, but landlords, and the whole buy to let thing are just one of the factors in the obscene price of houses.
Perhaps the house will later be inherited by his offspring, saving them experiencing the life of debt slavery? There are as many good landlords as bad; I know, I'm one of them (good, that is!).Not that I don't sympathise, because I'm all too aware of how it's impossible to have savings keep pace with inflation, but landlords, and the whole buy to let thing are just one of the factors in the obscene price of houses.
Then they'll be able to afford the latest iPhone, get a s
tty LED'd Citroen on PCP and spend anything left from their slavery on gym memberships, branded clothes and overpriced nights out. Ok here goes.
You know the positives for buying a BTL, but I personally think it's not a good time for you.....
You don't have kids - Yet. I assuming they will come along?
You have enough space at the moment - So if kids come along will you still have enough space?
Want a BTL Flat - Service charges!
Voids - What happens if you get no rent for three months? Can you pay mortgage?
st tenant - What happens if you have a tenant who decides not to pay rent and it takes 6 moths to get them out. Can you pay mortgage?
Rates - Mortgage rates are only going one way. We will never see a return to the early 90's where I personally was paying 15.5% but do expect a 3-5% increase
Personally I would get a home you'll be happy in for the rest of your life and then worry about BTL etc
You know the positives for buying a BTL, but I personally think it's not a good time for you.....
You don't have kids - Yet. I assuming they will come along?
You have enough space at the moment - So if kids come along will you still have enough space?
Want a BTL Flat - Service charges!
Voids - What happens if you get no rent for three months? Can you pay mortgage?
s
t tenant - What happens if you have a tenant who decides not to pay rent and it takes 6 moths to get them out. Can you pay mortgage?Rates - Mortgage rates are only going one way. We will never see a return to the early 90's where I personally was paying 15.5% but do expect a 3-5% increase
Personally I would get a home you'll be happy in for the rest of your life and then worry about BTL etc
Edited by Sir Bagalot on Thursday 2nd October 13:30
andy43 said:
We're doing the same - for our kids.
Then they'll be able to afford the latest iPhone, get a stty LED'd Citroen on PCP and spend anything left from their slavery on gym memberships, branded clothes and overpriced nights out.
Don't worry. I'm sure you'll have brought them up to be as utterly miserable as you.Then they'll be able to afford the latest iPhone, get a s
tty LED'd Citroen on PCP and spend anything left from their slavery on gym memberships, branded clothes and overpriced nights out. iphonedyou said:
andy43 said:
We're doing the same - for our kids.
Then they'll be able to afford the latest iPhone, get a stty LED'd Citroen on PCP and spend anything left from their slavery on gym memberships, branded clothes and overpriced nights out.
Don't worry. I'm sure you'll have brought them up to be as utterly miserable as you.Then they'll be able to afford the latest iPhone, get a s
tty LED'd Citroen on PCP and spend anything left from their slavery on gym memberships, branded clothes and overpriced nights out. 
How's this for an option.
Use your hard earned to pay a chunk off your mortgage or extend it or move to a bigger place. Rent a room out which in the south will probably net you 300, 400 a month? A chunk of this is tax free under the rent a room scheme and no vacant periods, no gas safety checks no landlord insurance, no repairs and maintenance of the second property.
Use your hard earned to pay a chunk off your mortgage or extend it or move to a bigger place. Rent a room out which in the south will probably net you 300, 400 a month? A chunk of this is tax free under the rent a room scheme and no vacant periods, no gas safety checks no landlord insurance, no repairs and maintenance of the second property.
OP here. I do sympathise with the 'moral high ground' idea as we had to fight off BTL'ers trying to gazump us when we bought our place. It can be hard as a young couple to buy a house when people buying their second or third homes can afford to keep outbidding you.
In terms of good tenants etc, if I found a flat in the right area I would let it to my sister - she can't afford to buy on her own. So effectively we would be paying her deposit for her. The only downside to this would be if we ever wanted to sell it would mean evicting her!
As for future, kids, etc - who can say. But if we ever needed the extra space, I'm sure we could sell the flat back on and amalgamate all of our funds into one pot.
In terms of good tenants etc, if I found a flat in the right area I would let it to my sister - she can't afford to buy on her own. So effectively we would be paying her deposit for her. The only downside to this would be if we ever wanted to sell it would mean evicting her!
As for future, kids, etc - who can say. But if we ever needed the extra space, I'm sure we could sell the flat back on and amalgamate all of our funds into one pot.
Pique said:
OP here. I do sympathise with the 'moral high ground' idea as we had to fight off BTL'ers trying to gazump us when we bought our place. It can be hard as a young couple to buy a house when people buying their second or third homes can afford to keep outbidding you.
In terms of good tenants etc, if I found a flat in the right area I would let it to my sister - she can't afford to buy on her own. So effectively we would be paying her deposit for her. The only downside to this would be if we ever wanted to sell it would mean evicting her!
As for future, kids, etc - who can say. But if we ever needed the extra space, I'm sure we could sell the flat back on and amalgamate all of our funds into one pot.
BTL lenders do not allow you to rent the property to immediate family members.In terms of good tenants etc, if I found a flat in the right area I would let it to my sister - she can't afford to buy on her own. So effectively we would be paying her deposit for her. The only downside to this would be if we ever wanted to sell it would mean evicting her!
As for future, kids, etc - who can say. But if we ever needed the extra space, I'm sure we could sell the flat back on and amalgamate all of our funds into one pot.
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