Quick BTL opinion please

[DSLiverpool]

I am undecided, after fannying round for a while it is time to get sorted.

I have £100k cash max to invest, I have decided to get terraced houses with as much work done as possible, should I

Pay cash for one at £60k and use £40k as a deposit on the other (or 60/30 to allow do up money)

Mortgage both at minimum deposit

Mortgage both at £45k deposit each

I am guessing they will cost £60/70k and I am aware of the yield calculation

I am undecided how to finance them and Im not sure I trust an advisor to be impartial

Cheers

[98elise]

Put as much cash into each as possible, unless....

1. You other personal debts you could pay down.
2. You can get a better return (after tax) than the BTL mortgage rate.
3. You want to do something else with the cash.

I own a couple of BTL's myself, and have those maxed on IO mortgages, with any spare cash I have sitting in an offset on my residential mortgate. Once I have any extra cash over it will pay down the BTL mortgages.

[DSLiverpool]

Thanks I appreciate the input

[quote=98elise]

1. You other personal debts you could pay down.
Nope we are debt free inc cars - I would love a nice new motor but I am short of business confidence at the moment.
2. You can get a better return (after tax) than the BTL mortgage rate.
Nope
3. You want to do something else with the cash.
No this is stock share money I have decided would be better in bricks

quote]

[Burrow01]

I'd try to buy them on a 50% deposit for each one - this gives you the best BTL mortgage rates

Are you looking for growth, i.e longer term increase in value or income?

[Sarnie]

DSLiverpool said:

I am undecided, after fannying round for a while it is time to get sorted.

I have £100k cash max to invest, I have decided to get terraced houses with as much work done as possible, should I

Pay cash for one at £60k and use £40k as a deposit on the other (or 60/30 to allow do up money)

Mortgage both at minimum deposit

Mortgage both at £45k deposit each

I am guessing they will cost £60/70k and I am aware of the yield calculation

I am undecided how to finance them and Im not sure I trust an advisor to be impartial

Cheers

Buy six £100k properties with £15k 15% deposits

[DSLiverpool]

Burrow01 said:

I'd try to buy them on a 50% deposit for each one - this gives you the best BTL mortgage rates

Are you looking for growth, i.e longer term increase in value or income?

Not income - they are for my 3 year old twins

[DSLiverpool]

Sarnie said:

Buy six £100k properties with £15k 15% deposits

Surely impossible?

[northwest monkey]

DSLiverpool said:

Sarnie said:

Buy six £100k properties with £15k 15% deposits

Surely impossible?

In theory not impossible at all but you might have to use a couple of different lenders to do it. Don't underestimate the amount of st having 6 properties at the lower end of the market can generate.

[DSLiverpool]

northwest monkey said:

DSLiverpool said:

Sarnie said:

Buy six £100k properties with £15k 15% deposits

Surely impossible?

In theory not impossible at all but you might have to use a couple of different lenders to do it. Don't underestimate the amount of st having 6 properties at the lower end of the market can generate.

I don't and I live in Birkenhead! (well Prenton but that's BH) - I only need 2 though one for each child, if it goes well I will look at maybe expanding but I have no desire to be a slum landlord lol

[Sarnie]

northwest monkey said:

In theory not impossible at all but you might have to use a couple of different lenders to do it. Don't underestimate the amount of st having 6 properties at the lower end of the market can generate.

£100k properties are the lower end of the market??

[Sarnie]

DSLiverpool said:

Surely impossible?

It's entirely possible. Fees are heavy at circa 2.5% but maximises the gearing of your money.

[northwest monkey]

Sarnie said:

northwest monkey said:

In theory not impossible at all but you might have to use a couple of different lenders to do it. Don't underestimate the amount of st having 6 properties at the lower end of the market can generate.

£100k properties are the lower end of the market??

Ok that was unfair, but they aren't at the top end either. They can still generate a lot of work though & void periods are also something to consider.

[Sarnie]

northwest monkey said:

Ok that was unfair, but they aren't at the top end either. They can still generate a lot of work though & void periods are also something to consider.

To be honest, £100k is probably about the average property value of all the BTL cases we do. Once you get above £200k and are outside of London the figures don't usually fit.

[Burrow01]

DSLiverpool said:

Burrow01 said:

I'd try to buy them on a 50% deposit for each one - this gives you the best BTL mortgage rates

Are you looking for growth, i.e longer term increase in value or income?

Not income - they are for my 3 year old twins

In that case I would buy them on a 50% BTL repayment mortgage (unless you have sufficient spare cash to pay the mortgage off as you go, in which case go Interest Only) - plan would be to have the properties paid off by the time the twins grow up.

[DSLiverpool]

Thanks for that and all advice, after researching the Birkenhead market I can get £425+ for a £60k terrace as long as it has dg and ch and it should be full all the time.
I may pay them off in full and probably break even on return till I earn my money back.


Still thinking though

[jonny70]

DSLiverpool said:

Thanks for that and all advice, after researching the Birkenhead market I can get £425+ for a £60k terrace as long as it has dg and ch and it should be full all the time.
I may pay them off in full and probably break even on return till I earn my money back.


Still thinking though

I personally would buy one if I had no experience in BTL with a 50% deposit , the mortgage interest is tax deductible.I would use the profits each month to overpay mortgage.If it goes alright buy the second one the following year .If after two years you feel its goign alright and have a ibt of experience buy another two.

Using the profit from the rent to overpay means you will have paid of the 4 houses by the time your kids are 18.

[BoRED S2upid]

DSLiverpool said:

northwest monkey said:

DSLiverpool said:

Sarnie said:

Buy six £100k properties with £15k 15% deposits

Surely impossible?

In theory not impossible at all but you might have to use a couple of different lenders to do it. Don't underestimate the amount of st having 6 properties at the lower end of the market can generate.

I don't and I live in Birkenhead! (well Prenton but that's BH) - I only need 2 though one for each child, if it goes well I will look at maybe expanding but I have no desire to be a slum landlord lol

In Birkenhead surley you can buy two properties outright for £100k? I know someone struggling to sell a 1 bed flat for £35k, might not give you the rental income that the terrace may give but its mortgage free income.

[DSLiverpool]

Yes I can get a house for 55k but I want the best yield and its a 3 bed and a 4 bed terrace we are after now, Nat west called today telling me rates are being reduced on Wednesday and we will move further forward once I've had that meeting.

[M7 ATW]

Hi,

I'm currently looking to purchase my first BTL, but unfortunately do not have the healthy deposit you have.

I'd put the minimum deposit in (25%) on one property and have it on an interest only mortgage. Based upon the £60k purchase/£400 per month rent, it will generate a fairly decent monthly return that can be saved and paid off the capital over a long term.

If you're comfortable with how it's going, then just repeat the process.

I understand why some wouldn't agree due to the increased exposure to interest rate increases etc, however, the OP still has the option to pay all/some of the debt off with the remaining savings.

[Sarnie]

M7 ATW said:

Hi,

I'm currently looking to purchase my first BTL, but unfortunately do not have the healthy deposit you have.

I'd put the minimum deposit in (25%) on one property and have it on an interest only mortgage. Based upon the £60k purchase/£400 per month rent, it will generate a fairly decent monthly return that can be saved and paid off the capital over a long term.

If you're comfortable with how it's going, then just repeat the process.

I understand why some wouldn't agree due to the increased exposure to interest rate increases etc, however, the OP still has the option to pay all/some of the debt off with the remaining savings.

Who said 25% was the minimum deposit? It can be done on 20% or even 15%