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?
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.
Gassing Station | Finance | Top of Page | What's New | My Stuff