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HMO Tenancy Agreements
adamw posted a topic in General property discussionHi all - I am I’m the process for purchasing my first HMO. It is a 4 bed that doesn’t require licensing (in my area, licenses are for 5 people+), and the tenant demographic will be either working professionals or benefit claimants. I’m planning to use a local HMO letting agent. I have just spoken with my mortgage broker who said that I could purchase it with a standard BTL mortgage (rather than HMO mortgage) if all tenants are on one tenancy contract. I’d obviously prefer a BTL mortgage as the set up costs would be a lot lower, however I was wondering how normal this type of tenancy is for 4 tenants who will not know each other (rather than 4 individual ASTs)? My initial thought is that it would be easy to switch out tenants when they move out simply by changing names on the tenancy, however how easy is it on one AST to prescibe different room rates and ensure tenants are not responsible for the total property rent (only their room rate)? Appreciate any guidance here! Adam
Any Grantham investors?
adamw posted a topic in General property discussionHey all - I’ve just started investing in Grantham in the East Midlands (thanks to family connections) and was wondering if anyone else invests there? I can’t find any investor groups from the town and it would be good to make some new contacts! Cheers Adam
1st Time Buyer BTL - cash then remortgage?
adamw posted a topic in Mortgage AdviceHi there - first time buyer here looking to begin a BTL portfolio (as a limited company) without buying a main residence first (plenty of detail as to why in the 'Newbie' section!). The main issue mortgage-wise appears to be access to the best rates as a FTB and first time landlord, as a SPV. Question: If I was to purchase a property with cash (via an SPV), let it out, then 'remortgage' (unencumbered remortgage?) after 6 months to release 60% the equity, would this effectively leave me in the same position as getting a 60% LTV mortgage at point of purchase, but open up more (and cheaper) mortgage options as we wouldn't be first time buyers or first time landlords after 6 months? Any thoughts here?
Newbie - Any Advice?
adamw posted a topic in Newbie Advice & SupportHey! My girlfriend and I (aged 29) are just beginning our property journey having spent the last year researching, building spreadsheets and setting goals. We’d like to build up a portfolio over the next 20 years to the point where we can achieve our current income levels through rental income and less stressful, ‘hobbyist’ jobs. We currently rent in London and plan to stay here for another 3ish years (not sure where we will go thereafter). We are first time buyers, and have saved up c.120k. Our initial thoughts were to buy in London to live, however this would require a c.70-80% LTV and I worry it would slow our ability to save and kick start reaching our property portfolio goals. We now think it would make more sense to invest our savings into 2-3 property deposits (over a couple of years) in higher yielding areas with potential for capital growth (we have been investigating the Midlands (given proximity to London and family) - especially Nottingham, Peterborough and Lincoln). We keep coming unstuck in a couple of areas, which is really frustrating us... 1. Is BTL for a 1st time buyer wise? I know we’ll have less BTL mortgages available, but I’m more worried about the stamp duty implications when we eventually want to buy our first home to live in (maybe we shouldn’t worry about this if its likely to be c.5 years away?) 2. Should we invest personally or through an SPV? Obviously lots of considerations but we are higher rate tax payers and our strategy would largely be to re-invest rental income over the next 20 years. Would this have any benefit on a personal purchase of a main residence later on? - Any thoughts on the locations above? We’re looking a standard BTLs, likely through letting agents whilst we build our knowledge and live in London. - And finally thoughts on our strategy? We are really keen to turn research into investment but suffering from analysis paralysis at the moment... Thanks, Adam & Corinna