Moving and BTL at the same time

[portseven]

i am going to talk this through with a mortgage pimp but basically,

i have £50k equity in current property, looking at a £300k property to move into.

i reckon i can get about 800 per month for the current place which will cover mortgage + a bit more.

might keep current mortgage on current property and ask for letting rights. though if i want to release some equity on this one they might want to know what its for.

[Bagpuss]

Let me say it again:

All depends where you property is, how much you can rent it out for and how much is left on the existing mortgage on it.

For all you know he may only have a £10,000 mortgage left on the property. Buying a new house and converting your existing property into a BTL is the way to go IMHO as you have already made a dent in the mortgage which means you can survive on a lower rental value.

Is there anywhere where rental incomes are 10% larger than an interest only BTL? Even if he has a negligible amount of mortgage left it will work out less than a building society return on the equity. If he wants to keep the house long term then OK, but as an investment over the next few years it doesnt stack up.

[threaded]

Is there anywhere where rental incomes are 10% larger than an interest only BTL? Even if he has a negligible amount of mortgage left it will work out less than a building society return on the equity. If he wants to keep the house long term then OK, but as an investment over the next few years it doesnt stack up.

Yes, you buy the house at auction.

[rootsnall]

i am going to talk this through with a mortgage pimp but basically,

i have £50k equity in current property, looking at a £300k property to move into.

i reckon i can get about 800 per month for the current place which will cover mortgage + a bit more.

might keep current mortgage on current property and ask for letting rights. though if i want to release some equity on this one they might want to know what its for.

If you will have a mortgage on your new property then you may aswell run the current one at a loss when it becomes a BTL rather than pay tax on your 'bit' extra. I would leave the smallest amount of equity you can get away with in the BTL.

[Bagpuss]

Yes, you buy the house at auction.

Houses at auction are going for way over the guide price. There is a lot of stupid people out there madly spending money which isn't theres.

[Ardesco]

Is there anybody in the world left who thinks that BTL is a short term way to earn some cash??


My BTL is for 25 years and if my flat is not worth more than my house is now in 25 years time I will be very upset

[NoddY]

The smart money moved out of UK property some time ago. Only poor people without pension provision are in the market now.

[Churchill]

Houses at auction are going for way over the guide price. There is a lot of stupid people out there madly spending money which isn't theres.

theirs

Steady pussycat, you're getting excited!

[Bagpuss]

Is there anybody in the world left who thinks that BTL is a short term way to earn some cash??


My BTL is for 25 years and if my flat is not worth more than my house is now in 25 years time I will be very upset

I think many people aren't wanting to wait 25 years to make thier money, moreover, they have stretched themselves so far that a large majority will soon be forced to sell.

Originally, the BTL model covered all your costs, include in that the opportunity cost of any cash invested. That no longer seems to be the case, it seems to be a subsidised bet on future rises.

Even if, in this case, it's his own house the maths doesn't stack up unless house price inflation carries on and on and on year on year and mortgage rates don't rise much more. Most sane people expect there to be a dip in the near future. So the obvious thing to do is cash in now and buy in the downturn. Looking into BTL now is IMHO stupid. It's time to go liquid.

[Ardesco]

If there is a downturn in the near future who cares as long as he can afford the payments.

Negative equity is only a problem if you need to sell up.

It is unlikely we will se a downturn that keeps going down or remains static forever. If nothing else house prices will go up with inflation once the downturn finishes.

Secondly if he takes the money out of it now he will invariably put it into his new house and not see it anyway.