Jump to content

Recommended Posts

So before COVID 19 I had some ideas floating around in my head. 

I am a home owner and will be mortgage free in in a few months. My property was valued at 200k its a small 2 bed end terrace bungalow with some space at side for a extension of around 6x4m. 

My currently line of work brings in around 20k to 25k after tax. I'm self employed. I have been in my current trade 28 years. 

I would like to get into property, being single I don't mind living in a place I could refurbish. Maybe I could rent my place after improvements? 

Any ideas welcome considering the current state we are all in. 

Thanks

 

 

 

Link to post

Doing a let to buy is perfectly viable. You can refurb your current place as a property you intend to let, and then raise a BTL mortgage on it at the same time as you buy a new home for yourself.

There are a couple of caveats though:

  • You need to have a residential purchase going ahead too, and you need to complete on both simultaneously. The lender wants to ensure you dont remain in the property with a BTL mortgage, so they want to see where you are going. If you plan to rent, then you might need to move before you can refinance.
  • You will be limited by the rent the property will bring in, so best to look at that first and factor that into any plans. Theres a simple calculation that any broker will be able to use once you know the rent once refurb is complete.
  • There are no phsical valuations at the moment really, so the value of your home is going to be based entirely on other sales in the area. How does yours compare? If improved its going to be worth more than others in the street then you wont be able to realise that until surveyors start visiting peoples homes again, and that may be some time.

So bounce the figures off a broker and make sure the finance aspect works for your plans, but in principle its a perfectly viable strategy to start building a property portfolio.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

Link to post
On 5/4/2020 at 10:50 AM, Stuart Phillips said:

Doing a let to buy is perfectly viable. You can refurb your current place as a property you intend to let, and then raise a BTL mortgage on it at the same time as you buy a new home for yourself.

There are a couple of caveats though:

  • You need to have a residential purchase going ahead too, and you need to complete on both simultaneously. The lender wants to ensure you dont remain in the property with a BTL mortgage, so they want to see where you are going. If you plan to rent, then you might need to move before you can refinance.
  • You will be limited by the rent the property will bring in, so best to look at that first and factor that into any plans. Theres a simple calculation that any broker will be able to use once you know the rent once refurb is complete.
  • There are no phsical valuations at the moment really, so the value of your home is going to be based entirely on other sales in the area. How does yours compare? If improved its going to be worth more than others in the street then you wont be able to realise that until surveyors start visiting peoples homes again, and that may be some time.

So bounce the figures off a broker and make sure the finance aspect works for your plans, but in principle its a perfectly viable strategy to start building a property portfolio.

So going ahead with a plan like this. I buy a run down property. Then is 6 to 12 months. How would I move forward?

But im almost mortgage free on my current home so why a BTL mortgage again?

Link to post

Do you have the cash to buy a new home outright?

Do you have a deposit in cash for a new home?

What are you actually trying to acheive? What do things look like once you are done?

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

Link to post
1 hour ago, Stuart Phillips said:

Do you have the cash to buy a new home outright?

Do you have a deposit in cash for a new home?

What are you actually trying to acheive? What do things look like once you are done?

No I don't have cash to buy outright. I have savings of 40k

I would like to achieve a new income in property. 

Link to post

Are you looking to:

  • Rent out the existing place and buy a new residence that you intend to then do up?
  • Do up the existing place and buy a new residence thats habitable?
  • Buy a new property to do up with the intention of renting it, and remain in the existing property?

What are the numbers? Value of the current place, and price range of the houses you are looking at?

The only reason i assumed a BTL mortgage is that the most common way if doing this is to raise money on the BTL and keep the borrowing lower on the residential. Either way you need a mortgage or two, i dont know what that should be yet because im still not really understanding what you want to end up with at the end. I cant give you ideas, i can only tell you what will work and what wont, and the numbers and criteria that will make it work.

 

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

Link to post
1 hour ago, Stuart Phillips said:

Are you looking to:

  • Rent out the existing place and buy a new residence that you intend to then do up?

 

This is my plan, I'd like to try this and keep going. But I'm here to ask for advice and to learn about this game. 

Link to post

I still dont really have enough information to give any sort of informed answer. Ive no idea how much money you actually need to realise your goal. If you wanted a 3 bed semi in the North then £40k is a good deposit and will probably cover stamp duty etc. If you want to do this in the South then its certainly not going to be enough and you will need to borrow.

Decide if you want a residential mortgage, which wil be cheaper, or if you want to raise finance on the existing place, which would be a BTL. If thats the case then the first post stands. If the property you are buying isnt habitable then you would need to take that route.

I think you need to speak to a broker and understand what you could borrow, set some budgets, research refurb costs etc and then a post here with a more specific problems which might garner more useful responses.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

Link to post
  • 1 month later...
On 5/7/2020 at 9:54 AM, Stuart Phillips said:

I still dont really have enough information to give any sort of informed answer. Ive no idea how much money you actually need to realise your goal. If you wanted a 3 bed semi in the North then £40k is a good deposit and will probably cover stamp duty etc. If you want to do this in the South then its certainly not going to be enough and you will need to borrow.

Decide if you want a residential mortgage, which wil be cheaper, or if you want to raise finance on the existing place, which would be a BTL. If thats the case then the first post stands. If the property you are buying isnt habitable then you would need to take that route.

I think you need to speak to a broker and understand what you could borrow, set some budgets, research refurb costs etc and then a post here with a more specific problems which might garner more useful responses.

Thanks for all your replies. I guess I'm just thinking and asking random things no real plan down yet. I just like the idea of a career change into property. I'd like to move from my current trade if I can. I like the idea of renting my place which has less than 2k outstanding mortgage. And trying to buy another run down property live in it while doing it up and try to sell for a profit. 

Link to post

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...