any pros and cons or things to look for
Thanks

 

uppppppppppppppppp

 

Im interested in this to. I always imagine buying a place to rent then not being able to find tenants and ending up having to pay some of mortgage yourself, and council tax etc

 

Normally more expensive but worse of all when you sell that bad boy your be paying capital gains tax.

You need to move into the properly and use it as your main home for at least 6 months to dodge it and pretending don't count....

 

we just neeed sum answers then lol come on u lot

 

theres plenty on the market you need to put down a good deposit to start,go for a fixed rate tied for a year or two then once up shop around for another deal,make sure the rent covers the cost of the paymnets with a bit extra in resereve for any maintanance that may need doing

 

i thought you could put it down as a pension now..! and get away with paying it

 

Yeah I think you right.....forgot about that....!

 

i looked at buy to let and its a rip off, way more expensive than a std mortgage, in the end i just took out another std interest only mortgage and can let from that, fook the banks let fees as long as you can service the loan what had it got to do with them how its paid.

 

There are a lot of variables but good thing is you should be able to get exactly what you want.

1. Interest rate. This could be a fixed rate for a set period, discounted for a set period, or tracker for a set period, or tracker for life etc.... Basically as it's an investment it's not regulated by the FSA so it's up to you what u decide to go for. Lot of people think interest rates have about peaked, so should be coming down within a year or so. Therefore a long fixed rate could tie you in at a higher rate if interest rates do go down. However fixed rates you know where you are from month to month.

2. Amount. You can get different loan-to-value amounts, but prob 85% (meaning you put down 15% deposit) is a good place to start. A 90% loan will prob cost you more in rates etc.

3. Rent ratio. They will only lend you the percentage amount as long as the rent ratios are all ok too. Better value products have 125% ratios, which means the rental income has to be 125% of the mortgage repayment. i.e. if mortgage is Ł100 per month then rent would need to be Ł125 per month. However, yields hav been slowly dropping and wether you'll get this depends on where you buy. You can get 100% deals where teh rent only has to cover the mortgage repayments, but i suspect these dont offer as good value as the 125% deals. As the risk to the bank increases so do the costs generally!

4. Interest only / repayment. If you want a bit of money each month to live off then interest only will mean smaller mortgage repayments, therefore more left over each month, but you never pay off the loan. Repayment might be best way to go for a pension fund as in 30 years the house is all yours! However, aggressive investors go for interest only as more money is avaible for further purchases

5. Also watch out for other charges i.e. arrangement fees, exit costs. Lower arrangement fees mean higher interest, but possibly more flexibility if interest rates come down and you want to get out of the deal

6. other costs. You dont pay council tax whilst it's empty, but you do pay mortgage costs! Therefore get it let asap. A letting agent will keep the nasty tenants away but take 3 weeks rent for doing the job plus 10% per month if you want them to manage the property. And dont think the tenants wont phone you up over all manner of stupid things either! Also alllow for repairs, insurance, yearly safety checks etc.

It's a lot of hard work and def not as easy as tv makes it sound, especially with uncertaintly in teh short term over house prices and interest rates. But if your in it for the long term then should see you well in the future

 

my best mate just bought hes first place on a buy to let basis

hes got a normal morgage though thats fixed for 3 years,

what hes done was bought a 4 bedroom house with a 40k deposit and hes chopped a big room into 2 smaller rooms, hes spent another 25k renovating on a show string budget and hes renting each room of the house for 120 quid each and 90 quid for a cupboard,,, well he says its a room as hes got a window

hes covering hes morgage and some ontop and hes plan is to sell the place when the fixed rate changes and then buy hes own place

he had hes old man give him a few pointers and help him what to look at ect

as for renting,,,,, thats what i said to him and last month i gave him 850 quid to help pay hes second months morgage as he wasnt ready to rent it out yet

he finished it3 weeks ago and hes place is already full !!

now he thinks hes bill gates and tells people in into property lettings and management,,,,,,, not bad for a street rat

cunt still aint payed me back so ive told himi own 4% of hes building when he sells it