How to: BTL basics

[sam.r]

Ok heres a situation someone needs some advice on.

Say you own 3 properties, all small houses 200k each in the SE. How would you go about expanding the portfolio?

I was thinking: take out a mortgage on all three (or one to start with) then, using the money that has been taken out as a deposit on another place and get a tenant in.

Is that how it works? (sorry but want to get to the basics and my knowledge on BTL etc is ste!)

What is the quickest and best way in your opinion to expand?

[sam.r]

Sorry I know its been done to death but I also know there are many people on here that are very successful with BTL's and could offer their experiences. ?

[sam.r]

pjac67 said:

That's about it in a nutshell - ie could potentially remortgage each property say upto 85% LTV on each £200k property (PROVIDED rent covers mortgage or better 125% of mortgage if you want best rates...), releasing £170k as your deposit on the next place - could purchase say 4 properties upto say £1m with 15% down and £20k left for stamp duty/costs (4 x £250k @ 1% )... or you could start slower/gear less aggressively....

Oh and if you have a 20 year+ timescale for returns I think you'll be OK...

Sorry, lets go over that.

You get a mortgage on property A that is worth 200k, 170k to buy property B outright. Get someone in the new place to cover the mortgage on property A

Repeat x 4...

Simple right?

[sam.r]

Simon813 said:

The only problem is when the 3 you own (originally valued at £200k each) are only worth £120k each but you owe £170k because you decided to expand!

The crash is here!

Si

Its not that bad shirly?


Would that climate not be a buyers market too? It would only go really pete tong if you wanted/needed to sell up?

[sam.r]

Havent really got time for redevelopments etc just looking at long term security / pension.

Buy at a good price? I was thinking about just listing a load of rentable properties (2 beds near stations etc) and offering silly money - someone might be desperate...

Whats the void period per year on average? 3 months?

Thanks for the advice.

[sam.r]

Yes they are examples however doing my sums here I am looking to cover my costs if possible. (inc void months) nothing more really.

Its a long term investment. The SE is very high so would be looking to earn as I bought too by offering silly money.