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BTL as a first-time purchase? Yay or Nay?


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Good evening all!

I am in my mid-twenties and I am decided to buy my first property in 2021. I will have saved up a deposit of around 25k in cash in the next few months and I am planning on buying a BTL in the Liverpool area, possibly a 2/3 bed house in a residential area not too distant from the City Centre at around the 60k to 80k price point with a 75% LTV product.

I hear a lot of people that recommend buying your own home FIRST before then going into BTL. My issue with that is that I live in London, and the alternative is to keep saving in order to buy my own place and it would still be in an area that I would not want to live in (either not central or poor condition). 

I would rather get started sooner and perhaps forego any tax advantages and taking on a higher interest rate as my opportunity cost is to wait multiple years or even worse never get started!!

 

I wanted to know what your thoughts are on the above and whether you would recommend BTL as a first-time purchase.

I will soon be reaching out to a few Mortage brokers even though I am still 6/8 months away from having the full deposit, to understand my mortgage options.

 

Looking forward to hearing from you and any input will be welcomed!!

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 Well done on saving your deposit! I understand your logic but I fear you may face a few problems.

It may be difficult to get a BLT mortgage when you have never owned a property before plus your lack of experience makes being a LL a bit more difficult - owning a property for the first time teaches you a lot of important lessons. Also being a long way from your property makes buying & running it trickier and more expensive.

If you are set on this course of action it is definitely worth talking to a broker to see if you will be able to get the mortgage you need.

Many of us start by living in an area / property we can afford rather than one we want to and if you can do this (and save on what I can only imagine is fairly exorbitant rent) you may be able to buy in a nicer area sooner rather than later. It is definitely worth exploring your local options fully before committing to a BTL a long way away which could prove a costly mistake.

Whatever you decide - good luck :) 

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