How much BTL mortgage would you get?

[yasockie]

Despite the bubble, I am considering getting a BTL property in London.
The plan is to sublet the room individually so even if one room is empty, the other tenant are hopefully paying.
From my calculations I could easily get a 7% annual yield, but this of course can get eaten by maintenance costs etc. I am fine with this.
In the worst case scenario, where I can't get tenant, I will be easily able to repay the mortgage from my income.
In some ways this is a no-brainer to me and I am even tempted to get a larger property, with more rooms to rent, maybe even target contractors working in London who want to rent central and cheap.
If things go sour in many years time, the rates go up, the demand goes down etc, I guess I should still be able to get out by selling the property, if I'm quick enough, right?
Any sensible advice?

[northernladuk]

Have a look at this thread I commented on. There is a useful calculator on there that I used to buy my properties..

http://forums.contractoruk.com/gener...budgeting.html

One thing to watch though, I am not sure if BTL's will allow part letting and room letting is an utter nightmare. The money is there if you are willing to put the work in I guess but I found it quite stressful. If you can target a professional market then fine but you are going to really mess with your ROI's over time unless you get it right.

Watch your leases as well. I am sure most flat leases do not allow part letting. In fact some leases for flat don't allow letting at all so be very very diligent.

Personally I went for two smaller properties rather than a big one to spread the risk and avoid part letting. It was just too much of a legal nightmare so made sure I avoided that option.

From my calculations I could easily get a 7% annual yield, but this of course can get eaten by maintenance costs etc.

Just have to budget properly. You should be taking maintenance in to your budget when calculating your ROI. If you not you will be planning to fail so pointless.

[Power Mortgages Ltd]

One thing to watch though, I am not sure if BTL's will allow part letting and room letting is an utter nightmare. The money is there if you are willing to put the work in I guess but I found it quite stressful. If you can target a professional market then fine but you are going to really mess with your ROI's over time unless you get it right.

WNLUKS

Lenders call this a 'HMO' - house of multiple occupancy and a lot of BTL mortgage providers do not allow this. It is normally given away by the fact there are locks on the individual doors or if there are kitchenettes and sinks in each room (if you were planning on going that far).

There are one or two lenders who will allow HMO's but they are generally more expensive than a normal BTL mortgage.

[lukemg]

I know BTL has done well for many people, especially if you got out at the right bit on the bubble (most didn't or were just getting in) but I wouldn't touch anything like this, it's just too much grief.
If you think property is going to fly, there are property ETF's that are setup to benefit, or REIT's, or commercial property (FCPT). They are flexible, you can invest a proportion of your assets and you can usually exit/trim back a portion if you need/want out and they never phone you to fix the boiler.
Or a more general investment fund (UK equity income from Vanguard maybe)
I was talking to a mate one time about doing some BTL and be said 'look, it can work well but my Vodafone shares never rip the light fittings and plug sockets out of the wall and tell me to fck off' !
Another mate rented his house out to a nice young lady when he moved out, rent stopped and the napper she moved in with her said he would kill him if he phoned again or came round. Took him another 6 months to get his now trashed pad back.

[masonryan]

I wouldn't bother. Income tax, then CGT when you sell.

[northernladuk]

I wouldn't bother. Income tax, then CGT when you sell.

I wish you would just **** off. Annoying ******* troll.