Mortgage free or more btl’s?
Discussion
Hi guys, i am in the lucky position of having inherited a property from my dad, and I have a couple of options available to me.
Its a btl, (our old home when i was younger) and worth about 200k. It currenty lets for £800pcm
I could remortage and fund anothet btl in cash which would my usual approach as i have several others.
I could sell it and buy 2 btl’s earning about 1300/1400 pcm.
Or, a tempting option is to sell and become mortgage free on my own home, at the tender age of 34. The wife is pushing towards more btls but i cant make my mind up.
Extra Income or “that feeilng” ? Hnmm
Its a btl, (our old home when i was younger) and worth about 200k. It currenty lets for £800pcm
I could remortage and fund anothet btl in cash which would my usual approach as i have several others.
I could sell it and buy 2 btl’s earning about 1300/1400 pcm.
Or, a tempting option is to sell and become mortgage free on my own home, at the tender age of 34. The wife is pushing towards more btls but i cant make my mind up.
Extra Income or “that feeilng” ? Hnmm
Edited by dazwalsh on Sunday 7th April 20:38
dazwalsh said:
Hi guys, i am in the lucky position of having inherited a property from my dad, and I have a couple of options available to me.
Its a btl, (our old home when i was younger) and worth about 200k. It currenty lets for £800pcm
I could remortage and fund anothet btl in cash which would my usual approach as i have several others.
I could sell it and buy 2 btl’s earning about 1300/1400 pcm.
Or, a tempting option is to sell and become mortgage free on my own home, at the tender age of 34. The wife is pushing towards more btls but i cant make my mind up.
Extra Income or “that feeling” ? Hmmm
Sell it, buy the 2 btl's, then drawdown enough from them to buy another one whose tenancy fully services the cap and int loan which will eventually result in you owning it and it's rental income for no cost at all to you. Its a btl, (our old home when i was younger) and worth about 200k. It currenty lets for £800pcm
I could remortage and fund anothet btl in cash which would my usual approach as i have several others.
I could sell it and buy 2 btl’s earning about 1300/1400 pcm.
Or, a tempting option is to sell and become mortgage free on my own home, at the tender age of 34. The wife is pushing towards more btls but i cant make my mind up.
Extra Income or “that feeling” ? Hmmm
You will also have £1300/£1400 pcm to spend which is nice.
Under the current circumstances, I would advise you to stay as you are for the present. I base this on 2 factors -
The costs (fees, stamp duty etc.) and general hassle involved in selling the one and buying two others. I appreciate that this could be minimal over the long term.
Of greater concern is the current political instability in the UK. Leaving aside any possible effect Brexit may have on the property market, I feel the greater risk is that of a Corbyn government. Should they be elected, you could find yourself among the people they will target most to squeeze money out - the big players will (as always) managed to create constructions or just move capital abroad - it will be the smaller investor who is the easiest target.
The costs (fees, stamp duty etc.) and general hassle involved in selling the one and buying two others. I appreciate that this could be minimal over the long term.
Of greater concern is the current political instability in the UK. Leaving aside any possible effect Brexit may have on the property market, I feel the greater risk is that of a Corbyn government. Should they be elected, you could find yourself among the people they will target most to squeeze money out - the big players will (as always) managed to create constructions or just move capital abroad - it will be the smaller investor who is the easiest target.
sunbeam alpine said:
Of greater concern is the current political instability in the UK. Leaving aside any possible effect Brexit may have on the property market, I feel the greater risk is that of a Corbyn government. Should they be elected, you could find yourself among the people they will target most to squeeze money out of.
TBH the current instability is having ZERO effect on my letting business.I am also anticipating brexit - whatever the outcome - having the same effect, ie zero effect.
But I'd be interested to hear how, specifically, you think a Corbyn govt. will do this 'squeezing' ?
I'd also be interested to hear where you think the millions of tenants affected by this destruction of the letting industry will live once it takes effect ?
selmahoose said:
sunbeam alpine said:
Of greater concern is the current political instability in the UK. Leaving aside any possible effect Brexit may have on the property market, I feel the greater risk is that of a Corbyn government. Should they be elected, you could find yourself among the people they will target most to squeeze money out of.
TBH the current instability is having ZERO effect on my letting business.I am also anticipating brexit - whatever the outcome - having the same effect, ie zero effect.
But I'd be interested to hear how, specifically, you think a Corbyn govt. will do this 'squeezing' ?
I'd also be interested to hear where you think the millions of tenants affected by this destruction of the letting industry will live once it takes effect ?
https://www.propertytribes.com/corbynomics-and-the...
https://www.ft.com/content/80647766-3d75-11e8-bcc8...
https://www.theguardian.com/commentisfree/2017/sep...
https://www.saplaw.co.uk/property-law-articles/726...
Plus from the horses mouth -
https://labour.org.uk/manifesto/secure-homes-for-a...
I'm only a small player - I have 4 properties in the UK, 3 of which are rented out via an agency, one I retain for my own use. My experience mirrors yours at the moment - the last property was rented within 3 days of being advertised, with a choice of at least 5 seemingly excellent tenants.
My concern regarding a possible future Momentum-led Labour government is that the BTL area is quite a soft target. Sentiment over this market is quite polarised, so I don't anticipate a lot of sympathy for landlords IF (note - I say IF) this segment should be targeted.
Personally, I would leverage the capital you have and increase your yield. The level you leverage at and the choice whether to have a repayment or interest only mortgages on that debt is down to your personal attitude to risk.
I would rather have property producing a yield and put all profits in to paying off my mortgage than use the lump sum to pay down my mortgage. In the long run your own mortgage will get paid off and you’ll also have other yield producing assets. But again its about your personal attitude to risk and the work that comes with managing properties.
Some prefer to keep it simple & I understand that.
I would rather have property producing a yield and put all profits in to paying off my mortgage than use the lump sum to pay down my mortgage. In the long run your own mortgage will get paid off and you’ll also have other yield producing assets. But again its about your personal attitude to risk and the work that comes with managing properties.
Some prefer to keep it simple & I understand that.
Edited by Mortgage_tom on Sunday 7th April 16:34
sunbeam alpine said:
There has been quite a lot on here. In addition a quick Google search throws up -
https://www.propertytribes.com/corbynomics-and-the...
https://www.ft.com/content/80647766-3d75-11e8-bcc8...
https://www.theguardian.com/commentisfree/2017/sep...
https://www.saplaw.co.uk/property-law-articles/726...
Plus from the horses mouth - https://labour.org.uk/manifesto/secure-homes-for-a...
The speculative gossip's just that. The more serious stuff, especially the manifesto, doesn't represent any threat at all. Indeed some of it is good and should be welcomed. https://www.propertytribes.com/corbynomics-and-the...
https://www.ft.com/content/80647766-3d75-11e8-bcc8...
https://www.theguardian.com/commentisfree/2017/sep...
https://www.saplaw.co.uk/property-law-articles/726...
Plus from the horses mouth - https://labour.org.uk/manifesto/secure-homes-for-a...
In fact, having given the issue a fair bit of consideration the only thing which could damage profitability a bit is the (not-mentioned) LVT.
Even then it doesn't take much effort to work out how to deal with even that silly idea.
And none of this answers where millions of tenants would live if the large private sector letting industry was destroyed or otherwise made dysfunctional by legislation.
I'd be a lot more anxious about uncertainty/brexit/labour govt. etc if my money WASN'T in btl.
selmahoose said:
The speculative gossip's just that. The more serious stuff, especially the manifesto, doesn't represent any threat at all. Indeed some of it is good and should be welcomed.
In fact, having given the issue a fair bit of consideration the only thing which could damage profitability a bit is the (not-mentioned) LVT.
Even then it doesn't take much effort to work out how to deal with even that silly idea.
And none of this answers where millions of tenants would live if the large private sector letting industry was destroyed or otherwise made dysfunctional by legislation.
I'd be a lot more anxious about uncertainty/brexit/labour govt. etc if my money WASN'T in btl.
I wonder if a labour government would simply nationalise existing btl properties at a low value. Or create a tenants right to buy scheme, again at a low value.In fact, having given the issue a fair bit of consideration the only thing which could damage profitability a bit is the (not-mentioned) LVT.
Even then it doesn't take much effort to work out how to deal with even that silly idea.
And none of this answers where millions of tenants would live if the large private sector letting industry was destroyed or otherwise made dysfunctional by legislation.
I'd be a lot more anxious about uncertainty/brexit/labour govt. etc if my money WASN'T in btl.
In their eyes redistributing wealth. In my eyes robbing hard earned assets and giving to those who don’t work hard.
MikeStroud said:
I wonder if a labour government would simply nationalise existing btl properties at a low value. Or create a tenants right to buy scheme, again at a low value.
In their eyes redistributing wealth. In my eyes robbing hard earned assets and giving to those who don’t work hard.
How exactly would they do that?In their eyes redistributing wealth. In my eyes robbing hard earned assets and giving to those who don’t work hard.
Thanks guys, it does make a good bit of sense to reinvest that equity given borrowed money is so cheap, I got a remortage offer for 75k for less than £150 per month interest only last week. Thats without fees too. That will buy a knackered 2/3 bed semi in a alrightish area of leeds which will return £600 at a minimum after a refurb.
Im not adverse to risk, although im careful not to over leverage myself, and brexit wont have a tremendous effect on the PRS unless your relying on capital growth.
The one thing that worries me though is Corbyn and Mcdonell, as aluded to above they have it in for anyone with asset wealth and that includes the big meany landlords throwing the peasants out onto the street or taking all their money off them so they are forced into food banks. I attend regular meetings with the RLA and there is a general feeling that landlords would be more in favour of another 3 years of brexit mess than a labour government any day of the week.
Im not adverse to risk, although im careful not to over leverage myself, and brexit wont have a tremendous effect on the PRS unless your relying on capital growth.
The one thing that worries me though is Corbyn and Mcdonell, as aluded to above they have it in for anyone with asset wealth and that includes the big meany landlords throwing the peasants out onto the street or taking all their money off them so they are forced into food banks. I attend regular meetings with the RLA and there is a general feeling that landlords would be more in favour of another 3 years of brexit mess than a labour government any day of the week.
Edited by dazwalsh on Sunday 7th April 20:43
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