Discussion
I live in an area where you can buy a small 3 bedroom house for around 100k. The Mrs and I have a fair chunk of money sitting in the bank doing naff all.
Is it worth getting a BTL mortgage as an investment? Not really looking to make anything extra, but just getting it to pay for itself over the next 25 year as a bit of extra for when we retire. We could even buy another one in a few years if all goes OK with it.
Any landlords out there with any advice? Or, is it more hassle than what its worth?
Is it worth getting a BTL mortgage as an investment? Not really looking to make anything extra, but just getting it to pay for itself over the next 25 year as a bit of extra for when we retire. We could even buy another one in a few years if all goes OK with it.
Any landlords out there with any advice? Or, is it more hassle than what its worth?
We would be looking at 10%-15% deposit and they usually rent for around the £600 a month mark.
Like I said - we would only be looking to cover the mortgage more than expect to make a profit!
The question there I suppose is - is it better to put down more of a deposit? To which the answer would be yes!
Like I said - we would only be looking to cover the mortgage more than expect to make a profit!
The question there I suppose is - is it better to put down more of a deposit? To which the answer would be yes!
welshjon81 said:
We would be looking at 10%-15% deposit and they usually rent for around the £600 a month mark.
Like I said - we would only be looking to cover the mortgage more than expect to make a profit!
The question there I suppose is - is it better to put down more of a deposit? To which the answer would be yes!
Don't forget you'll be charged income tax on the rental revenue.Like I said - we would only be looking to cover the mortgage more than expect to make a profit!
The question there I suppose is - is it better to put down more of a deposit? To which the answer would be yes!
So if it rents at £600/month, you'd need the mortgage to be £480/month just to break-even (assuming you're in the 20% tax bracket). And that's before any other costs associated with home ownership.
breakfan said:
welshjon81 said:
We would be looking at 10%-15% deposit and they usually rent for around the £600 a month mark.
Like I said - we would only be looking to cover the mortgage more than expect to make a profit!
The question there I suppose is - is it better to put down more of a deposit? To which the answer would be yes!
Don't forget you'll be charged income tax on the rental revenue.Like I said - we would only be looking to cover the mortgage more than expect to make a profit!
The question there I suppose is - is it better to put down more of a deposit? To which the answer would be yes!
So if it rents at £600/month, you'd need the mortgage to be £480/month just to break-even (assuming you're in the 20% tax bracket). And that's before any other costs associated with home ownership.
We have a btl, didnt make any profit for first few years, now making about 5000 per annum, so not going to make us rich.
Would I do it again? Probably not, too much hassle, and we're lucky in that we have a management co. who only charge us 5%.
Still have the tenants phoning us directly and lying through their teeth though.
welshjon81 said:
I live in an area where you can buy a small 3 bedroom house for around 100k. The Mrs and I have a fair chunk of money sitting in the bank doing naff all.
Is it worth getting a BTL mortgage as an investment? Not really looking to make anything extra, but just getting it to pay for itself over the next 25 year as a bit of extra for when we retire. We could even buy another one in a few years if all goes OK with it.
Any landlords out there with any advice? Or, is it more hassle than what its worth?
Crack onIs it worth getting a BTL mortgage as an investment? Not really looking to make anything extra, but just getting it to pay for itself over the next 25 year as a bit of extra for when we retire. We could even buy another one in a few years if all goes OK with it.
Any landlords out there with any advice? Or, is it more hassle than what its worth?
You will need 25% of the value as deposit.
Buy a house that you would happily live in, or at least would have at a certain point in your life (young/old).
Be a good landlord and fullfil your obligation to the tenant.
There's easier, less risky ways to make money. But as part of your overall long term investments, BTL in my opinion is very very worthwhile for most people.
breakfan said:
Don't forget you'll be charged income tax on the rental revenue.
So if it rents at £600/month, you'd need the mortgage to be £480/month just to break-even (assuming you're in the 20% tax bracket). And that's before any other costs associated with home ownership.
You cannot offset all the interest these days it’s down to 20-25% max of your financing charge that can be offset. So if it rents at £600/month, you'd need the mortgage to be £480/month just to break-even (assuming you're in the 20% tax bracket). And that's before any other costs associated with home ownership.
rufusgti said:
Crack on
You will need 25% of the value as deposit.
Buy a house that you would happily live in, or at least would have at a certain point in your life (young/old).
Be a good landlord and fullfil your obligation to the tenant.
There's easier, less risky ways to make money. But as part of your overall long term investments, BTL in my opinion is very very worthwhile for most people.
100% agree, my number one thought when buying my BTL was "would I be happy to live here". I ended up having to put in 45%, but it means the mortgage is very cheap (especially as it is interest only). I bought it as my backup plan, my train of thought at the time was if my life goes to sYou will need 25% of the value as deposit.
Buy a house that you would happily live in, or at least would have at a certain point in your life (young/old).
Be a good landlord and fullfil your obligation to the tenant.
There's easier, less risky ways to make money. But as part of your overall long term investments, BTL in my opinion is very very worthwhile for most people.
t I can live here for virtually nothing and just get a part time job somewhere and still easily afford to live. Plus it is five minutes away from my parents so that may come in handy when I am older and they need to be looked after.sociopath said:
Would I do it again? Probably not, too much hassle, and we're lucky in that we have a management co. who only charge us 5%.
Still have the tenants phoning us directly and lying through their teeth though.
I pay 10% and I still get the tenants emailing me directly with issues. I would say it is great for the months on end where I hear nothing, I forget I even own it apart from the rent appearing each month. Still have the tenants phoning us directly and lying through their teeth though.
When I suddenly get sent a video showing water leaking out the bottom of the boiler I think it is all too much hassle.
I think if you have good tenants and few problems then it is great. However, I don't have the right personality for it so I wouldn't buy any more.
Agreed with the points of it being a hassle. Think about what you have to offer as a landlord. Are you handy with DIY? Do you own tools, enjoy working, have access to tradesman who you trust, can you do your own accounts, are you available at short notice.. are you responsible with money and can you spot when others are not. Would you consider yourself a good judge of character?
R
My job is maintaining property, I do it along side tradesman of all types some of whom I've worked alongside for twenty years. My BTL is mostly within the city I work In so it's just an extension of my day job.
If I didn't understand how a building is put together and find I usually spend hours waiting around for tradesman that try and rip me off. Plus I don't have any time or inclination for other peoples issues, or have flexible enough lifestyle to deal with new problems and can't stand the thought of painting a wall or fixing a bathroom fan then at the very least you will want to consider the costs of full management. And realistically consider if property and people is something you are interested in at all. Personally I'm very interested in people and property, but it's fine if you're not. It just means a long term investment fund is probably going to work out better for you.
R
My job is maintaining property, I do it along side tradesman of all types some of whom I've worked alongside for twenty years. My BTL is mostly within the city I work In so it's just an extension of my day job.
If I didn't understand how a building is put together and find I usually spend hours waiting around for tradesman that try and rip me off. Plus I don't have any time or inclination for other peoples issues, or have flexible enough lifestyle to deal with new problems and can't stand the thought of painting a wall or fixing a bathroom fan then at the very least you will want to consider the costs of full management. And realistically consider if property and people is something you are interested in at all. Personally I'm very interested in people and property, but it's fine if you're not. It just means a long term investment fund is probably going to work out better for you.
welshjon81 said:
We would be looking at 10%-15% deposit and they usually rent for around the £600 a month mark.
Like I said - we would only be looking to cover the mortgage more than expect to make a profit!
The question there I suppose is - is it better to put down more of a deposit? To which the answer would be yes!
You might need a bigger deposit than that, however it might be ok at a higher rate. Like I said - we would only be looking to cover the mortgage more than expect to make a profit!
The question there I suppose is - is it better to put down more of a deposit? To which the answer would be yes!
£600 a month is a good yield (7.2%) which would be something like 14% return on investment (ROI). Average yields across the country is more like 4-5%.
I'm a long term landlord and all mine were were similar yields.
Joey Deacon said:
rufusgti said:
Crack on
You will need 25% of the value as deposit.
Buy a house that you would happily live in, or at least would have at a certain point in your life (young/old).
Be a good landlord and fullfil your obligation to the tenant.
There's easier, less risky ways to make money. But as part of your overall long term investments, BTL in my opinion is very very worthwhile for most people.
100% agree, my number one thought when buying my BTL was "would I be happy to live here". I ended up having to put in 45%, but it means the mortgage is very cheap (especially as it is interest only). I bought it as my backup plan, my train of thought at the time was if my life goes to sYou will need 25% of the value as deposit.
Buy a house that you would happily live in, or at least would have at a certain point in your life (young/old).
Be a good landlord and fullfil your obligation to the tenant.
There's easier, less risky ways to make money. But as part of your overall long term investments, BTL in my opinion is very very worthwhile for most people.
t I can live here for virtually nothing and just get a part time job somewhere and still easily afford to live. Plus it is five minutes away from my parents so that may come in handy when I am older and they need to be looked after.sociopath said:
Would I do it again? Probably not, too much hassle, and we're lucky in that we have a management co. who only charge us 5%.
Still have the tenants phoning us directly and lying through their teeth though.
I pay 10% and I still get the tenants emailing me directly with issues. I would say it is great for the months on end where I hear nothing, I forget I even own it apart from the rent appearing each month. Still have the tenants phoning us directly and lying through their teeth though.
When I suddenly get sent a video showing water leaking out the bottom of the boiler I think it is all too much hassle.
I think if you have good tenants and few problems then it is great. However, I don't have the right personality for it so I wouldn't buy any more.
Joey Deacon said:
If you can get £600 rent on a £100K property then that sounds like an incredible investment. I think you will struggle with a 10 or 15% deposit, I suspect the minimum for a BTL mortgage is going to be 25%
It’s not difficult, I have a £72k flat that I rent out for £550, in reality I could get £650ish, but I’ve had the same family living there for 6 years with no issues.We have our home rented out for the foreseeable whilst we're abroad - we got a consent to let.
Ours is a 200k 4 bed detached with garage, we get £850 per month.
We lived there for 5 years prior to letting it out, pretty happy with it although it did have its issues, it was built around 1998, we have done new boiler, kitchens and bathrooms etc but it could do with new windows and doors and facias.
In getting it ready it failed the electrical test on some sockets being too close to a sink (hadn't changed since we bought it) and it needed a new fuseboard, the renter noticed a cracked tile so that got swapped and they've asked to change a few furnishings (we OK'd them all apart from swapping laminate flooring in hallway because it cost a fortune, we'll let them swap if theres no issues over the next year or so)
We're looking at it as we wont make any money in the first 5 years, windows and doors we where quoted 8k for, but the house is essentially paying for itself - we don't plan to return to that house but have it as a safety net.
If you use a letting agent chose wisely, the first guy recommended we fully redecorate, give a free months rent for doing the windows and doors etc, he was firmly on the renters side, the letting agent we chose was a little more expensive (and we found the renter ourselves through facebook but they done all the checks) but theres no messing, if something needs our attention it gets raised, else we hear sweet FA which is what I like.
Ours is a 200k 4 bed detached with garage, we get £850 per month.
We lived there for 5 years prior to letting it out, pretty happy with it although it did have its issues, it was built around 1998, we have done new boiler, kitchens and bathrooms etc but it could do with new windows and doors and facias.
In getting it ready it failed the electrical test on some sockets being too close to a sink (hadn't changed since we bought it) and it needed a new fuseboard, the renter noticed a cracked tile so that got swapped and they've asked to change a few furnishings (we OK'd them all apart from swapping laminate flooring in hallway because it cost a fortune, we'll let them swap if theres no issues over the next year or so)
We're looking at it as we wont make any money in the first 5 years, windows and doors we where quoted 8k for, but the house is essentially paying for itself - we don't plan to return to that house but have it as a safety net.
If you use a letting agent chose wisely, the first guy recommended we fully redecorate, give a free months rent for doing the windows and doors etc, he was firmly on the renters side, the letting agent we chose was a little more expensive (and we found the renter ourselves through facebook but they done all the checks) but theres no messing, if something needs our attention it gets raised, else we hear sweet FA which is what I like.
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