Property tycoonery...
Discussion
I've got a plan, and it's as HOT as my PANTS!
See it's like this. Me Julie has a flat that she bought for £20K and is now worth £??? - let's say £60K.
I have a bungalow with £33K on the mortgage, worth say £100K.
Now if we were to rent them both out to other folk and the income offset existing mortgage/ other expenses for the two properties, it ought to be feasible to buy a third property to live in? Or am I missing something...?
See it's like this. Me Julie has a flat that she bought for £20K and is now worth £??? - let's say £60K.
I have a bungalow with £33K on the mortgage, worth say £100K.
Now if we were to rent them both out to other folk and the income offset existing mortgage/ other expenses for the two properties, it ought to be feasible to buy a third property to live in? Or am I missing something...?
Re mortgage both properties as buy to lets - you'll need 85% LTV and rents to cover 125% of interest and you'll have released a load of wodge to reinvest/splash on a new pad. Jobs a good 'un. Only concerns are interest rates, rental market & property markets.
This is how a lot of people have made a lot of money over the last 10 years. It will not be as effective now after the big property value gains we've seen over the last 5 years though.
This is how a lot of people have made a lot of money over the last 10 years. It will not be as effective now after the big property value gains we've seen over the last 5 years though.
Incorrigible said:
Oh and if you were going to do that I would get largish (80%) mortgages on the 2 properties you're renting out as the interest is ofsettable against tax
So that would give you £90k to start with before you even get a mortgage on the house to live in
That's assuming you can get 125% of the mortgage payments in rent on an 80% mortgage at today's rates.
Edit: I can't on one of mine, hence I'm stuck with a crap rate.
>> Edited by t1grm on Monday 7th November 16:39
There was another post there, although it said something very similar to Ali
That's what Mrs Inc and I have done over the years
I would not be doing such a big deal on property atm (not here (se)) but if prices are still rising at >10% where you are then I would say it's not a bad plan
Your other option for some cash from property would be sell Julies place and use the cash to do a renovation. Qucker turn around so less likely to be affected if there is a shift in property prices
That's what Mrs Inc and I have done over the years
I would not be doing such a big deal on property atm (not here (se)) but if prices are still rising at >10% where you are then I would say it's not a bad plan
Your other option for some cash from property would be sell Julies place and use the cash to do a renovation. Qucker turn around so less likely to be affected if there is a shift in property prices
[quote=t1grmThat's assuming you can get 125% of the mortgage payments in rent on an 80% mortgage at today's rates.
Edit: I can't on one of mine, hence I'm stuck with a crap rate.[/quote]I would guess that's possible judging from the property values, rental can't be less than £350 a month anywhere can they
Edit: I can't on one of mine, hence I'm stuck with a crap rate.[/quote]I would guess that's possible judging from the property values, rental can't be less than £350 a month anywhere can they
Incorrigible said:
I give you Stoke on Trent
I was looking at buying some property there - reasonable 2 bed terraces are available for around £50 - 60K but it would have to be exceptionally good to achieve £350 a month.
Or you could pick one up for about £40k get £280 per month and run the risk of having to get new tennants when the old ones got shot
Uriel said:I'm renting 4,500 sqaure feet of workshop space for less than one bed flat rental
Move Julie into yours. Sell her place. Pay off your mortgage. Buy £30k's work of milling machines/lathes/etc.
All plumbed in air line 2 wheel free ramps, cleaning/bead blasing room, makeshift spray booth
Rent out Julies flat, use the money to rent a workshop
Makes much more sense
Incorrigible said:
Oh and if you were going to do that I would get largish (80%) mortgages on the 2 properties you're renting out as the interest is ofsettable against tax
So that would give you £90k to start with before you even get a mortgage on the house to live in
If you are gearing up existing properties (that you've been living in ) as buy-to-lets (without selling and re-buying into a separate Company ), then using the proceeds of the additional loan(s) to purchase a place to live in -....... the *additional* gearing may not be tax allowable - because it could be deemed by the Revenue as used for the purposes of buying a place to live in .
You need to get some expert tax advice on this -it may not be as straight-forward to get the tax relief as you may think.
Uriel said:
Move Julie into yours. Sell her place. Pay off your mortgage. Buy £30k's work of milling machines/lathes/etc.
That was the original plan, kind of.
Now it seems to make more sense to hang on to it. Julie's mate is keen to rent the flat, plus it's on the doorstep of a major hospital redevelopment so in 2-3 years' time there'll be medical folk gagging for accommodation in the area.
A house just round the corner from the bungalow was only up 'To Let' for 2 weeks before someone moved in; shortly before that it was for sale so we're guessing that someone bought it just to rent out.
Thanks for the figures chaps; I know it turns the whole thing into a business venture but I don't see any other (legit) way to make money in this bloody country...
wedg1e said:
Move Julie into yours. Sell her place. Pay off your mortgage. Buy £30k's work of milling machines/lathes/etc.
That was the original plan, kind of.
Julie's mate is keen to rent the flat, plus it's on the doorstep of a major hospital redevelopment so in 2-3 years' time there'll be medical folk gagging for accommodation in the area.
A house just round the corner from the bungalow was only up 'To Let' for 2 weeks before someone moved in; shortly before that it was for sale so we're guessing that someone bought it just to rent out.
Thanks for the figures chaps; I know it turns the whole thing into a business venture but I don't see any other (legit) way to make money in this bloody country...
DO NOT EVER RENT TO A FRIEND!!! NOT EVER UNDER ANY CIRCUMSTANCE
rich1231 said:
Move Julie into yours. Sell her place. Pay off your mortgage. Buy £30k's work of milling machines/lathes/etc.
That was the original plan, kind of.
Julie's mate is keen to rent the flat, plus it's on the doorstep of a major hospital redevelopment so in 2-3 years' time there'll be medical folk gagging for accommodation in the area.
A house just round the corner from the bungalow was only up 'To Let' for 2 weeks before someone moved in; shortly before that it was for sale so we're guessing that someone bought it just to rent out.
Thanks for the figures chaps; I know it turns the whole thing into a business venture but I don't see any other (legit) way to make money in this bloody country...
DO NOT EVER RENT TO A FRIEND!!! NOT EVER UNDER ANY CIRCUMSTANCE
OK!! I CAN SEE A FEW POTENTIAL PITFALLS TOO, BUT WHAT THE HELL!
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