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Let to Buy and Move V's Sell, Move and find another BTL!? Help


Option 1 or Option 2  

  1. 1. Option 1 or Option 2

    • Option 1
      0
    • Option 2
      0


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Hi Everyone,

Im really hoping some of you could share some opinions and advice for my situation and maybe tell me what you would do in my shoes. 

I currenlty live in a house worth £325K with a mortage outstanding of £225K 

I have found another property i would like to buy as my main residence which is £360K

both properties are located in the south of england in hampshire so not the hottest location for capital growth but a good solid rental demand.

 

After much head scratching i have boiled it down to 2 options:

Option 1

Remortage my current property on to a LTB @ 80% LTV (5 year fixed as 2 year not available at this LTV) i would release £35K and the property would rent for £1200 pcm and cash flow at £272PM Net of costs and income tax. I would then purchase the new property on a 90% LTV using the relased equity and my £35K savings to cover the extra SDLT and fees assostiated, leaving me with somewhere arround £5K in the bank but 2 assets and 2 big mortages in an uncertain times.  

Pros: Keep a good cash flowing house, less transations so lower fees (no sale cost), ive lived in the house so know the market area and the target tennant well, second asset straight away rather than waiting IE gets my investing sooner, 5% Net ROI on a 3 bed semi house based on my cash left in. 

Cons: will leave me tighter than im used to cash wise, not sure a 5 year fixed mortage is a good idea right now? would prefer 2 years, i am emotionally attached to the house so worried i might be looking at it with rose tinted specticles, Current market conditions high risk? would it be wiser to cash out with option 2 now and wait. 

 

Option 2 

Sell my Residential, by the new house and bank £85K to then go on and purchase either 1 larger or 2 small BTL properties somewhere at a later date once the economy is slightly more certain, negative to this is lost potential income and growth in the time it will take me on the addition transactions.  i suppose the question on option 2 is with the 85K left over could i get a better investment or investments that give me a higher net ROI than 5% and higher net cash flow than £272 PM.

Pros: More cash avaiable after move for light refurb on new home and or seperate BTL purchases, Cash out in uncertain times, less risk? 

Cons: Lost oppurtunity?, more fees, more transactions, taking longer to start investment journey, is there a better investment? 

 

I apprecate its a messy question with a few different layers but if anyone can unpack it and give me some feedback and opinions i would really appreciate it.

 

 

Kind Regards,

 

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