financing a second property ........
Discussion
This is a bit of a punt but there must be some property investors here.
I'm looking to buy a second property to rent out as an investment - also this may sound daft but it also has a garage too which I would use.
I've got a couple of options.
Currently my existing property has aprox 90% equity so I'm thinking of remortgaging to free up cash to purchase the second property.
Or get a buy to let mortgage and use cash in the bank from shares i've sold.
Should I get a interest only mortgage ?
Ultimately I would like a portfolio of property, shares and a bit of cash.
I'm looking to buy a second property to rent out as an investment - also this may sound daft but it also has a garage too which I would use.
I've got a couple of options.
Currently my existing property has aprox 90% equity so I'm thinking of remortgaging to free up cash to purchase the second property.
Or get a buy to let mortgage and use cash in the bank from shares i've sold.
Should I get a interest only mortgage ?
Ultimately I would like a portfolio of property, shares and a bit of cash.
OP you come across like you're after reassurance rather than you've made a definite decision to buy.
In my opinion, if you bought property as an investment in the late 90s you would now be a rich man with little effort, but that bubble has long burst. BTLs are for the cash rich, those in negative equity or people with a job in Sunderland or Barnsley. I've seen posts on here talking about 8% yields being good but for all the aggro of tax returns, tenants and repairs, and higher interest mortgages for the man on the street, is it really?
If you're looking to invest for future income, an alternative and much less hassle approach could be a HYP stock portfolio, I bought 5 FTSE stocks yielding over 6% (with growth since they began paying divis) only a few months back. And in several years I may even get an increase in capital to boot - odds are as unknown as property prices imo.
In my opinion, if you bought property as an investment in the late 90s you would now be a rich man with little effort, but that bubble has long burst. BTLs are for the cash rich, those in negative equity or people with a job in Sunderland or Barnsley. I've seen posts on here talking about 8% yields being good but for all the aggro of tax returns, tenants and repairs, and higher interest mortgages for the man on the street, is it really?
If you're looking to invest for future income, an alternative and much less hassle approach could be a HYP stock portfolio, I bought 5 FTSE stocks yielding over 6% (with growth since they began paying divis) only a few months back. And in several years I may even get an increase in capital to boot - odds are as unknown as property prices imo.
Edited by anonymous-user on Tuesday 4th March 01:35
Have to disagree with you Raymond, I purchased 4 BTL and was able to retire along with my wife at 51. Our own house is fully paid off and I have a small military pension that makes up about 30% of our net income.
We live fairly well but not extravegently, currently on a 6 week holiday in Oz. A friend of mine with no pension has 3 BTL's all mortgaged and does not need to work either.
If you take the capital that I have invested, deduct the mortgage payments, and other costs, inc tax from the gross rental income. The net income represents about 15% return on the capital I have invested. I know that's not the normal way to calculate "yield", but it gives a more realist figure IMHO.
Yes, now and then there's a problem that needs sorting, but if I get more than 1 problem a month its unusual. Tax return is done by an accountant, fee's claimable against tax.
Currently not very much capital growth, but thats not a problem because the rental income more than makes up for that. And history suggests that prices will go up again one day.
I guess I could of carried on working and using the income to pay off the mortgages, but lifes for living, not working.
We live fairly well but not extravegently, currently on a 6 week holiday in Oz. A friend of mine with no pension has 3 BTL's all mortgaged and does not need to work either.
If you take the capital that I have invested, deduct the mortgage payments, and other costs, inc tax from the gross rental income. The net income represents about 15% return on the capital I have invested. I know that's not the normal way to calculate "yield", but it gives a more realist figure IMHO.
Yes, now and then there's a problem that needs sorting, but if I get more than 1 problem a month its unusual. Tax return is done by an accountant, fee's claimable against tax.
Currently not very much capital growth, but thats not a problem because the rental income more than makes up for that. And history suggests that prices will go up again one day.
I guess I could of carried on working and using the income to pay off the mortgages, but lifes for living, not working.
Thanks for the feedback.
I'm looking to diversify - I'm not a great believer in having all your investments in one basket .
I'm an active investor in FTSE 100 and 200 companies, and tend to dip in and out. I've made some good returns with Thomas Cook, Burberry, Easy Jet, Super Group, Thorntons.
Don't want to invest in Bonds, gold, gilts or cars, I missed the boat when I could have brought a 964RS for the high £20ks.
So I do believe property is still an investment .
I'm looking to diversify - I'm not a great believer in having all your investments in one basket .
I'm an active investor in FTSE 100 and 200 companies, and tend to dip in and out. I've made some good returns with Thomas Cook, Burberry, Easy Jet, Super Group, Thorntons.
Don't want to invest in Bonds, gold, gilts or cars, I missed the boat when I could have brought a 964RS for the high £20ks.
So I do believe property is still an investment .
jonny70 said:
oldnbold said:
H A friend of mine with no pension has 3 BTL's all mortgaged and does not need to work either.
How do you live off 3 BTL that are mortgaged with no other income? Doesnt make sense .As with mine they are student rentals and provide a very good return, although my friend is not interested in lots of toys and doesn't have any expensive hobbies.
oldnbold said:
AS RUS A said until you know the income they generate, the amount of capital deposit paid and the mortgage cost its difficult to judge.
As with mine they are student rentals and provide a very good return, although my friend is not interested in lots of toys and doesn't have any expensive hobbies.
Thats very true. was just picturing 2/3 small house flat/house on a 75% btl mortgage providing enough dosh for someone to live a decent lifestyle!As with mine they are student rentals and provide a very good return, although my friend is not interested in lots of toys and doesn't have any expensive hobbies.
jsut curious about what properties your friend has and what percent the capital deposits are?
jonny70 said:
oldnbold said:
AS RUS A said until you know the income they generate, the amount of capital deposit paid and the mortgage cost its difficult to judge.
As with mine they are student rentals and provide a very good return, although my friend is not interested in lots of toys and doesn't have any expensive hobbies.
Thats very true. was just picturing 2/3 small house flat/house on a 75% btl mortgage providing enough dosh for someone to live a decent lifestyle!As with mine they are student rentals and provide a very good return, although my friend is not interested in lots of toys and doesn't have any expensive hobbies.
jsut curious about what properties your friend has and what percent the capital deposits are?
At a guess with his other property he has around the £30k a year net income. Not bad for a retirement income, he has some capital invested in very safe places which I doubt bring him more than £5k pa.
I know this is a fair bit more than he earned when working, so all things being relative he enjoys a comfortable lifestyle. Of course had he been a powerfully built company director with a goaty this income would seem a pittance.
As it is he lives in a semi that is worth less than any of his rental properties and his only luxury is a decent motorhome.
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