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Planning my BTL journey in Leeds


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Hi,

 

I have only this week discovered this forum but have been researching property investment online for a few years now, I have also read Rob's book.

 

I currently own/live in a 2 bed terrace in Leeds(Bramley area) which I have around 30-35% equity in, the 2 year fixed mortgage has 19 months left to run.

 

My current plan is that once the 19 month term is up that myself and the soon to be wife will buy a property together using our current/ongoing savings(I realise we will have to pay extra stamp duty when buying a property together). I will then remortgage my property with a 75% LTV BTL mortgage to release a little extra cash which I can lump with my savings to begin looking at a 2nd BTL property.

 

Does this sound like a good tactic to get started?

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Good morning Djpix99, 

 

Great to have you on the forum and it sounds like you have a solid plan laid out above! 

 

The plan of waiting for the fixed mortgage to run itself out so as not to incur any fines for early repayment is a smart one, then refinancing at a higher LTV as ideally the property has also gone up in value is again a great idea!

This is actually a strategy I used myself. I bought a flat in London, then 3 years later re-mortgaged to release equity and put it onto a BTL mortgage. Meaning I had money to then re-invest. 

 

Annoyingly if you and the soon to be wife are buying together as you already have a property, there will be the extra 3% stamp duty to pay. 

 

Here are some things you may want to consider as you are building your portfolio. 

- Buying through a limited company ( benefits: still get mortgage relief, only taxed at 18-20%)

- partner buying the property herself and then not paying the extra 3% stamp duty (when you're married you can't do this, the law considers you one person once married)

 

Also here is a few podcast you may find helpful:

 

'What's the best point in the 18 year property cycle to remortgage'

https://www.thepropertyhub.net/ask139/

 

'the beginners guide to buy to let mortgages'

https://www.thepropertyhub.net/tpp023-the-beginners-guide-to-buy-to-let-mortgages/

 

'Should property investors use a limited company?'

https://www.thepropertyhub.net/ask01-should-property-investors-use-a-limited-company/

 

Enjoy and any other questions you may have, please just ask. 

 

Cheers

 

Phil

 

 

 

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Hi @bradleywood,

 

The areas I would ideally be looking at will be Bramley, Armley, Stanningley, Farsley & Pudsey. These are all mainly because I know them, they have good transport links to Leeds you centre and they fall within my potential price range.

 

What areas are you considering for BTL 2? Are you looking for a standard 2bed house flat or something higher yielding like a HMO?

 

Thanks

 

James

 

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  • 2 weeks later...

Hi James,

 

I’ve found Farsley a bit expensive and starting to think Pudsey is going the same way! I might have a look into Bramley a little bit more though, prices are a little less and rents approximately the same.

 

I think I may stick to standard BTL for now. I did agree a price on a 4 bed HMO in Pudsey a few months ago but had to pull out, not sure of the demand for that kind of thing in Pudsey/Farsley. Seems to be more common in the Kirkstall sort of area, a bit closer to the centre.

 

Thanks,

Brad

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Hi Bradley, I know what you mean Farsley and Pudsey are going up in price. I live near the station in Bramley and there are quite a few really smart hmo's near my house with £400+ monthly rents. So I'm guessing there must be some demand. The train journey into Leeds in 9 minutes so it's great for city workers. 

 

James

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  • 8 months later...

Hi James,

Sorry, I've only just seen your reply to this.

How have you been getting on in Leeds? The prices on the street my Pudsey flat is on seem to keep increasing!  I've had a change of tactic and have started to look at Sheffield, hopefully catch it before it grows and follows the trend Leeds has set.

Brad

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Hi Brad,

My only property at present is my own in Bramley, but based on a few recent sales it's gone up around 5-6% per year which will be nice when I come to re-mortage and pull out finds towards a first BTL(Dec 19 fingers crossed).

If I'm honest I think Leeds will continue on the up based on some news articles I've read and some of the below things happening over the next few years.

- Channel4 opening a new northern office

- HMRC have a new central hub opening near Wellington Street.

- South of York Road(SOYO) development Infront of Quarry Hill.

- development of the area around Water Lane/Globe Road

- development of the old Asda warehouse and area surrounding The Tetley.

 

 

Sheffield could be a good call, i've heard a lot of good things about a trendy area called Kelham Island recently. I will probably stick with Leeds just because I'm getting to know the city well and I can self manage. I know a lot of investors are jumping on Bradford for the sub £60k properties and +10% yields that are acheivable. I've been told that it's not worth it as the standard of tenant isn't great and yields aren't all that once you tak into account the extra maintainance/repairs/non payment of rent.

James

 

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On 6/7/2018 at 6:22 PM, Djpix99 said:

Hi @bradleywood,

 

The areas I would ideally be looking at will be Bramley, Armley, Stanningley, Farsley & Pudsey. These are all mainly because I know them, they have good transport links to Leeds you centre and they fall within my potential price range.

 

Good idea to look local. Most of ours are on the doorstep and easy to drop in if a problem. And we drive by periodically to make sure no wild parties or orgies happening. :-)

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Hi, 

So by way of a little update to my strategy...

  • Property 1 - I now plan to remortgage my personal property down to 75% ltv in December 2018( 2year fix) and pull out any extra funds, this should give me around £17k based on it's current value.
  • property 2 - I will then look to buy a BTL for around £80-100k using a 75/80% ltv btl mortgage to purchase a btl property. I will us the funds from the remortgage, plus should have enough savings available to make up the difference.
  • property 3 - Then during/towards the end of the 2 year fix on my personal property, i will buy a 3rd property with my wife for us to live in(using savings) and get permission to rent property 1 or remortgage to a btl depending on if an ERC is payable.

To me this seems a pretty achievable 3 ish year strategy, especially based on the fact that property 2 would be paid for mostly using equity I already have and the fact that as property 3 is for personal use it will only require a 10% deposit.

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