BTL Landlords - can you help?

[bradders]

Wonder if any of you existing BTL landlords out there can shed any light on the following.....

What is your average void period per annum, say over 10 years, and how many properties do you have in your portfolio to create the average?

What are your annual costs per house in your portfolio for repairs and renewals over a similar period?

Do your lenders specify a rental income to annual payment ratio (either interest only or full repayment)?

What % level of borrowing do you feel comfortable with?

[thekingisdead]

-1 property portfolio, probably ~4wks empty in 7 years
-Annual maintenance / insurance costs - ~£750 (I've had some re-plastering done which has caused this to increase, other than that I do a lot of stuff myself)
-No mortgage secured against property so no comment

[rufusgti]

Voids can be minimised by lining tenants up before the existing move out. I have one flat that i've not had one day of void in the 4 years I've had it. It's in a location that provided it's handed back in good state there's no reason to be any void periods. Another property has not done so well, when I first started ten years ago I wasn't very good at selecting tenants and they kept moving out after 6 months or often sooner. Often leaving a mess to decorate and clean up. But that's been ironed out now and the last two tenants have lasted 3 and 4 years and counting.
Insurance around 200-300 per property per year. The spend is drastically different on mine. One has cost me the price of a new bathroom fan in 4 years. The other was flooded and had multiple change overs. I've spent around 4k there in 10 years. Although 3k was payed out from insurance. So you could say 1k over 10 years.
I do all the work in all properties, unless legally not allowed.

I like about 50% loan to value. I've not always had this but it's where I'm happiest. You don't want to be locked in to an investment because you will take a bath pulling out. And you need something in it for the future. I have never gone down the interest only route, however many people did and however well they did it just wasn't for me.

[anonymous-user]

bradders said:

Do your lenders specify a rental income to annual payment ratio (either interest only or full repayment)?

Yes, all BTL mortgages must meet affordability rules. Basically the rental income must cover 125% of the mortgage rates assuming a rate of 5.5%

Lots of calculators out there, but rule of thumb you are looking at a minimum 35% deposit these days.

[NickCQ]

thekingisdead said:

-1 property portfolio, probably ~4wks empty in 7 years
-Annual maintenance / insurance costs - ~£750 (I've had some re-plastering done which has caused this to increase, other than that I do a lot of stuff myself)
-No mortgage secured against property so no comment

What would you estimate in terms of man-hours of your own time?

[Sarnie]

Joey Deacon said:

Yes, all BTL mortgages must meet affordability rules. Basically the rental income must cover 125% of the mortgage rates assuming a rate of 5.5%

Lots of calculators out there, but rule of thumb you are looking at a minimum 35% deposit these days.

Standard rental coverage is actually 145%, 125% is for five year products.

Deposit is 25% minimum.

[thekingisdead]

NickCQ said:

What would you estimate in terms of man-hours of your own time?

Difficult question to answer. If I have no tenant changes, possibly 20hrs per year, max.

If I have a tenant change-over (and therefore redecoration, viewings) a lot more. Hard to estimate. Maybe 50hrs?

[bradders]

Sarnie said:

Standard rental coverage is actually 145%, 125% is for five year products.

Deposit is 25% minimum.

Is the 145% figure relative to the annual interest sum or an annual repayment sum?

Actually, I have seen elsewhere that you are involved in the mortgage game - would you be happy to talk about it further?

[Sarnie]

bradders said:

Is the 145% figure relative to the annual interest sum or an annual repayment sum?

Actually, I have seen elsewhere that you are involved in the mortgage game - would you be happy to talk about it further?

The 145% is applicable to the monthly Interest Only, at 5.5%.....................these are the standard parameters, some lenders will offer different parameters depending on the circumstances (five year fixed, LTV, Higher rate Vs Lower rate tax payer etc etc).

More than happy to chat if you wanna drop me a PM or give me a call!

[bradders]

Sarnie said:

The 145% is applicable to the monthly Interest Only, at 5.5%.....................these are the standard parameters, some lenders will offer different parameters depending on the circumstances (five year fixed, LTV, Higher rate Vs Lower rate tax payer etc etc).

More than happy to chat if you wanna drop me a PM or give me a call!

Thanks for the heads up. Will drop you a quick PM by introduction.

[98elise]

NickCQ said:

thekingisdead said:

-1 property portfolio, probably ~4wks empty in 7 years
-Annual maintenance / insurance costs - ~£750 (I've had some re-plastering done which has caused this to increase, other than that I do a lot of stuff myself)
-No mortgage secured against property so no comment

What would you estimate in terms of man-hours of your own time?

I would say mine (varying between 4 and 6 properties over then last 8 years) are about 10 hours per year (total).

I get called out a couple of times each year on average. Last two were a failed internal door latch (so door would not open) and a front door motice not working.

I don't remember that last call out before that.

It's its a plumbing/heating issue I just call our my regular plumber. I only go for general DIY type stuff.

I refurbished the properties top to bottom before letting them, which helps cut down on the call outs.

[dazwalsh]

bradders said:

Wonder if any of you existing BTL landlords out there can shed any light on the following.....

What is your average void period per annum, say over 10 years, and how many properties do you have in your portfolio to create the average?

What are your annual costs per house in your portfolio for repairs and renewals over a similar period?

Do your lenders specify a rental income to annual payment ratio (either interest only or full repayment)?

What % level of borrowing do you feel comfortable with?

1, 16 properties. On average i would say a void of 2 weeks per annum per property. for working out yields on new purchases i always calculate at 10 months let rather than 12

2. Per house costs are proabably 1k-1.2k per year, although hard to establish without sifting through my accounts.

3. lenders are usually happy enough with 125% although that percentage may have increased recently IIRC. if Interest only you should be well clear of that figure anyways and upwards of 300%+

4. Not sure on the last one, i have inherited most of my portfolio, and rest purchased via remortgage so not had to be mortgaged up to the eyeballs to get up and running. in my head anything past 70% would be risky.