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To BTL or not to BTL!
The Abs posted a topic in Newbie Advice & SupportDear property hub family, FIrst of all i would like to thank Rob and Rob for the property hub!! they are amazing! Secondly thank you for taking time out to read my post. I truly would appreciate your help in my situation - going over the numbers. Any comment, idea, suggestions or nuggets of wisdom will be greatly appreciated (big or small) Here I am ready to plunge head first into my first BTL only to get thrown a speed camera moment that could end thing on track! My wife and I have for our own house which has gone up nicely in value since purchase, two years on and the shinny mortgage deal comes to and end and the lovely brokers are only too happy to get you going with a remortgage. Since I am already paying for the remortgage i might as well initiate the equity release process at the same time (read the books and attended the course but nothing will make me knowledgeable in 2nd property deals like getting physically involved) so had this chat with the broker and here are the figures: currently without equity: monthly payment £816 (1.34%) IF i was to release equity: My monthly mortgage payment will move to circa £1211.00 (£400 increase/month) 51.3%LTV and all i can release and use -due to our affordability is a £30K (taking the other expenses into account: potential refurb, fees .etc + plus savings) That £30K From that i will need to pay the 25% deposit and pay at the most 3% stamp duty (house below £125k) 0.25x+0.03x= £30K => circa property around £100K mark for my BTL. That is all well however when i looked at the figures they did not align> Because a property OUTSIDE London with (rental potential) for £100K will roughly speaking attract a monthly rent of £550. MOrtgage payment of around £313 and so realised with the agency running fees, and bills i will not even get any cash flow! Not to mention the £400 extra/month from our main house mortgage. +in addition to that i understand that the bank's are specifying that the house needs to be able to be let-able, immediately and so that affected our strategy-of flipping a on a house in need of modernisation. So from the case above what are your thoughts of the situation and is there an escape route that i am not seeing? if you know of other ways we can do it please enlighten me! I know there is a solution out there... Thank you very much for your time, regards Abdul