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Hi
I have some geniune questions i would like to know about BTL......
1, i know its long term investment, but the jist is, you get a 10 year mortgage, rent it out for 10 year so the renter pays the mortgage, then you sell and get to keep the money after you have paid tax and capital gains tax, yes?
2, For BTL, whats the min % of deposit needed?
3, whats the most propertys the same mortgage lender will lend for?
Thanks All......
Matt
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Hi Matthew - welcome to the site.
Briefly:
1. Kind of. What you would hope is that the yield of the property would exceed the mortgage repayments, hence creating a profit each month. Plus you don't necessarily have to sell after 10 years - it will likely still be a good income-generating asset, so whether you hold or sell depends on your circumstances (lump sum needed or income).
2. Depends on circumstances. Why not pick a property from the site as an example, then click the Money Centre link on the right and there you can do a really quick quote in a couple of minutes, all online. It will give you a range of options (level of deposit, interest rate, fixed / floating, etc) and I find gives really good background to your options.
3. Depends on lender to lender. Not sure why some limit it really.
Best of luck
Will Foot |
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Hi,
1) you will struggle to find a rental property in a reasonable area that will meet the payment of a 25 year mortgage, if you can find one that covers a 10 year mortgage I'll take 2 please
2) usually 15% deposit minimum
4) some lenders say 4 but I believe some lenders have no limits if the deal stacks up
Gary |
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Matthew, as Gary mentioned many lenders will limit you to a certain number of properties.
This can also depend on whether you are using a limited company or not. Many lenders will only allow 2 properties per person if you are using a limited company - because of your reduced liabilities.
So look into this.
Julian
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Hi
Thanks for your replies....
I wouldnt be looking for monthly income as such, i was thinking getting a 10 year mortgage, and just renting out at the mortgage value.
Im still in the looking into stages of this.
Someone on this site i read had 52 propertys! thats what i was asking for...
Thanks
Matt |
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Well Matt I wish you the best of luck. pretty soon I hope to be buying an investment property. I see that you asked this on the channel 4 forum. You got a good answer over there. |
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matthew,
you planning on having 52?! that will sure take a while to build up.
how long do you think that will take?
tom |
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think of the fees on that amount of property!
i'm a cheapskate, that's why i use this site, no buyer fees.
does anyone know anything about camberley, beacon view rd, west brom? there's an interesting flat on this site, very well priced but i have no idea about the area....?
mark |
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yeah, just spotted it. yield is impressive. research is vital of course, but given the tenant has been there for 9 months maybe it's par for the course?
couldn't comment on the area though Mark.
John |
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Hi
Ahhh your Frank West from the channel 4 forums, hey, it was good of that person to email us! Im trying to gather information so i can learn from every forum possible lol
I wasnt planning on having 52 propertys, but i thought as someone else did, some lenders dont have a limit. and someone kindly answered that, thanks.
The bad thing of having so many propertys is what if, say 10 propertys you had were empty for months! what a nitemare!
I can see alot of pitfalls, but just a few propertys would be nice to secure a future for my family, thats the lines im thinking along.
Thanks
Matt |
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I think if you buy propertys that yield in excess of 10%, you should be able to ride the wave of bad void periods. Should, as I dont have that many propertys...yet!
A guy I know has said to me that he thinks every property has the potential to be rented out! Within reason obviously...not a devastated property!!
So, if you found you had 10 properties not renting, you must think about a few things that you may not have done. You may have to reduce the rent slightly! Perhaps £2 a week,per couple of weeks not rented, which isnt much, but could tempt somebody!
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Only problem with buying 10% + yielders - they're nearly all in northern parts of the country or wales/scotland. Normally the extra cost in managing/maintanenece can bring the positive cash flow down to around the break even mark including logistical costs, time costs , lettings fees , voids etc.
most money in property is made through buying cheap and capital growth or works to enhance value.
there's no set strategy - because I'm based in the home counties - best yield is about 6.5% for 100 miles in every direction. If I'm gearing highly ie 80%LTV mortgages or more then the buy to sell option currently makes better sense to me.
also depends how much money you want to make and how quickly.
making money in property is generally about contacts , capital buying facility and a good nose for the right property.
regards andrew Peers - developer / investor |
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Hi Andrew
I have seen that term used before and I hate to ask, but could you explain what "gearing" means? |
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Sure - gearing simply means using other peoples money to buy proeprty eg when taking out at 80% LTV(loan to value) mortgage the bank puts in 80% you put in 20%. You are whats called 80% geared. high gearing just menas little equity little of you're own money.
I use banks money and venture capital money to invest in property thus allowing me to buy millions when personally I only have a small amount myself.
regards Andrew Peers - andrewpfs@aol.com |
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and obviously you are risking more exaggerated exposure to movement in property value the more you are geared. |
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Hi Andrew,
Yeah the profits will come down with using letting agents, but I dont really have a choice wherever I buy in the U.K as I work and live in Germany, so its vital for me I get a good management agent in.
I think buying 10%+ yields and using a letting agent, would still be better than getting a 5%-7% yields and managing it yourself, as I couldnt be bothered with daft calls throughout the night or weekends for little jobs, to satisfy the tenant.
I think 10% isnt too bad for the service they provide. If youre buying only propertys between £25000 and £45000, its only between £25 and £45 fee.
Frank
There are plenty of 85% LTV mortagges about too, which makes you even more highly geared than just on 80% LTV.To make you even more highly geared is to borrow the deposits/15% remaining. This is only advisable if you work out your figures thoroughly.It will certainly catapult your portfolio.
I'm trying this option at the moment and should have 3 more propertys by March.
Hope this helps
Simon
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Sorry-mistake on the letting fees,that figure of £25 and £45 was meant if 12% yield was acheived.
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Andrew , Absolutley correct.... Drop me a line when you are free on
cwproperties@btinternet.com
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Andrew , Absolutley correct.... Drop me a line when you are free on
cwproperties@btinternet.com
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