What makes the most financial sense
Discussion
3 scenarios, any of them sound more sensible than any others?
1) buy supercar outright, £220k
2) Buy 10 X £130k properties on repayment mortgage, 25% deposit on each - total deposit £325k. Mortgages £570PCM, rental income £800PCM = margin £230PCM. Times 10 properties = £2300 per month on Supercar lease
3) Buy 10 X £130k properties on interest only mortage, 20% deposit each - total deposit £260k. Mortgages £435PCM, rental income £800PCM = margin £365PCM. Times 10 properties = £3650 per month on supercar lease.
1) buy supercar outright, £220k
2) Buy 10 X £130k properties on repayment mortgage, 25% deposit on each - total deposit £325k. Mortgages £570PCM, rental income £800PCM = margin £230PCM. Times 10 properties = £2300 per month on Supercar lease
3) Buy 10 X £130k properties on interest only mortage, 20% deposit each - total deposit £260k. Mortgages £435PCM, rental income £800PCM = margin £365PCM. Times 10 properties = £3650 per month on supercar lease.
AndyC_123 said:
3 scenarios, any of them sound more sensible than any others?
1) buy supercar outright, £220k
2) Buy 10 X £130k properties on repayment mortgage, 25% deposit on each - total deposit £325k. Mortgages £570PCM, rental income £800PCM = margin £230PCM. Times 10 properties = £2300 per month on Supercar lease
3) Buy 10 X £130k properties on interest only mortage, 20% deposit each - total deposit £260k. Mortgages £435PCM, rental income £800PCM = margin £365PCM. Times 10 properties = £3650 per month on supercar lease.
£3650 per month - 7% agent fees - 40% tax = £2037 per month1) buy supercar outright, £220k
2) Buy 10 X £130k properties on repayment mortgage, 25% deposit on each - total deposit £325k. Mortgages £570PCM, rental income £800PCM = margin £230PCM. Times 10 properties = £2300 per month on Supercar lease
3) Buy 10 X £130k properties on interest only mortage, 20% deposit each - total deposit £260k. Mortgages £435PCM, rental income £800PCM = margin £365PCM. Times 10 properties = £3650 per month on supercar lease.
Allow 10% deduction to cover for voids/new boiler/damage/roof repairs etc = £1800
AndyC_123 said:
paulrockliffe said:
I think your interest calculations are a significantly out of step with the market.
Prices just quoted 2 or 3 years fixed, would remortage when up?You'll have £7-10k in fees to find every time you remortgage, including arranging the mortgages now. Plus the interest on those fees. Then as others have mentioned, tax, voids, repairs, and a load of hassle from tenants to sort out before you get the money to rent your supercar.
Still might be more sensible than spending £220k on a car though!
I don't think you would get a BTL mortgage with a 20% deposit, I suspect it would need to be 35% plus now. The amount they will lend you is based on the rental income each month, and if this would still cover the mortgage at their stress level % calculation.
I got a BTL mortgage when rates were 0.25% and the stress level was a mortgage payment at 5.5%. Seemed utterly ridiculous at the time as rates are never going to be that high......
I got a BTL mortgage when rates were 0.25% and the stress level was a mortgage payment at 5.5%. Seemed utterly ridiculous at the time as rates are never going to be that high......
Well, I'd go for half of (1) (£100k supercar and the rest in a very big slush fund).
The reason why I wouldn't do a BTL (or indeed 10!) aside from possible times when you haven't got anyone renting, someone stops paying because Cost of Living Crisis, a boiler breaks or someone puts a chair through every door for s
ts and giggles and then claims they haven't got money to pay for rent or the damage... aside from all that, I'm not sure where the industry is going for private landlords.
They seem to be squeezed more and more every time I hear something in the news about BTLs or landlords, and despite all that landlords are still considered scum by most.
At least with a supercar, only one person is going to screw you over (the owner of the dealership where you get the car serviced
).
The reason why I wouldn't do a BTL (or indeed 10!) aside from possible times when you haven't got anyone renting, someone stops paying because Cost of Living Crisis, a boiler breaks or someone puts a chair through every door for s
ts and giggles and then claims they haven't got money to pay for rent or the damage... aside from all that, I'm not sure where the industry is going for private landlords. They seem to be squeezed more and more every time I hear something in the news about BTLs or landlords, and despite all that landlords are still considered scum by most.
At least with a supercar, only one person is going to screw you over (the owner of the dealership where you get the car serviced
).indeed.
tenants refuse to move out, your agent didnt serve some gas certificate correctly 3 years ago, you cant use expedited process and it takes you 9 months to get them out.
they trash the place, boiler breaks, gas and lekky checks all the time, EPC, EICR, GSC, etc etc etc.
Then you'll have to improve all the EPC ratings for the new legislation,
labour getting rid of section 21 notice
its only going 1 way, which is making it more and more of a ballache. I look after 4 for the old man and 2 for the mother and its a nightmare constantly.
Just buy the supercar and enjoy life.
tenants refuse to move out, your agent didnt serve some gas certificate correctly 3 years ago, you cant use expedited process and it takes you 9 months to get them out.
they trash the place, boiler breaks, gas and lekky checks all the time, EPC, EICR, GSC, etc etc etc.
Then you'll have to improve all the EPC ratings for the new legislation,
labour getting rid of section 21 notice
its only going 1 way, which is making it more and more of a ballache. I look after 4 for the old man and 2 for the mother and its a nightmare constantly.
Just buy the supercar and enjoy life.
AndyC_123 said:
3 scenarios, any of them sound more sensible than any others?
1) buy supercar outright, £220k
2) Buy 10 X £130k properties on repayment mortgage, 25% deposit on each - total deposit £325k. Mortgages £570PCM, rental income £800PCM = margin £230PCM. Times 10 properties = £2300 per month on Supercar lease
3) Buy 10 X £130k properties on interest only mortage, 20% deposit each - total deposit £260k. Mortgages £435PCM, rental income £800PCM = margin £365PCM. Times 10 properties = £3650 per month on supercar lease.
I did this in 2006 with an F430 using 5 mortgaged properties to fund its HP, which they did. 1) buy supercar outright, £220k
2) Buy 10 X £130k properties on repayment mortgage, 25% deposit on each - total deposit £325k. Mortgages £570PCM, rental income £800PCM = margin £230PCM. Times 10 properties = £2300 per month on Supercar lease
3) Buy 10 X £130k properties on interest only mortage, 20% deposit each - total deposit £260k. Mortgages £435PCM, rental income £800PCM = margin £365PCM. Times 10 properties = £3650 per month on supercar lease.
And I've still got them (the properties, not the car) and their loans have been paid off since 2016.
Worked out very well.
On average I have at least one tenant per year not paying / paying late and at least 2 call outs for stuff that needs fixing.
They typically don’t stay over two years.
Imagine that *10.
And then they’re probably all
Leaseholds which adds further issues.
I’d buy one upper class property, freehold and get stable tenants in who can pay (preferably company for expats) on time and have longevity
They typically don’t stay over two years.
Imagine that *10.
And then they’re probably all
Leaseholds which adds further issues.
I’d buy one upper class property, freehold and get stable tenants in who can pay (preferably company for expats) on time and have longevity
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