BTL - financing one from another?
Discussion
Long time lurker, new member as I have been avidly reading this sub forum for a while and see there a re a few investors and brokers on here.
I have been an ‘accidental landlord’ of 2bed modern end link house for the past year. The property previously owned by my parents was also let before I took over.
It is worth around £100-120k depending on what day of the week it is, or agent etc… and is in good order. It lets for £475 pcm, the tenants have no desire to leave and have lived there for 6 years. The rent is probably slightly below current market rates but for the sake of £40-50 a month I don’t want to loose good tenants. Have put in a new bathroom this year as I wasn’t happy with the condition of the old one and the property is in excellent order.
As opposed to selling the rental property and using the cash to clear my residential mortgage I am keen to remove equity from it and use this as a deposit(s) for additional properties.
I am aware of all the doomseday BTL scenario’s etc.. but I still think there is a market worth getting a bit more exposure into and now that I am setup with maintenance, insurance, and an accountant I may as well increase my multiples a little.
I would like to mortgage 65% of the value of the property out and use this as another 35% for another property (possibly HMO). The HMO income would be circa £1400pcm – I am aware of the difference in hassle and ‘work’ as a HMO landlord versus ‘normal’ residential. Ideally I would also like to add another property to the portfolio which I would use cash savings for. My approach is for long term investment and not short term gain.
Oh and yes I have thought it would be more PH to sell the house and buy a Ferarri/Porsche/Aston etc…
I have been an ‘accidental landlord’ of 2bed modern end link house for the past year. The property previously owned by my parents was also let before I took over.
It is worth around £100-120k depending on what day of the week it is, or agent etc… and is in good order. It lets for £475 pcm, the tenants have no desire to leave and have lived there for 6 years. The rent is probably slightly below current market rates but for the sake of £40-50 a month I don’t want to loose good tenants. Have put in a new bathroom this year as I wasn’t happy with the condition of the old one and the property is in excellent order.
As opposed to selling the rental property and using the cash to clear my residential mortgage I am keen to remove equity from it and use this as a deposit(s) for additional properties.
I am aware of all the doomseday BTL scenario’s etc.. but I still think there is a market worth getting a bit more exposure into and now that I am setup with maintenance, insurance, and an accountant I may as well increase my multiples a little.
I would like to mortgage 65% of the value of the property out and use this as another 35% for another property (possibly HMO). The HMO income would be circa £1400pcm – I am aware of the difference in hassle and ‘work’ as a HMO landlord versus ‘normal’ residential. Ideally I would also like to add another property to the portfolio which I would use cash savings for. My approach is for long term investment and not short term gain.
Oh and yes I have thought it would be more PH to sell the house and buy a Ferarri/Porsche/Aston etc…
I'm a Mortgage Broker and can help with this if you'd like to drop me a PM. 
Lender selection is going to be key as not all lenders will allow capital raising on BTL mortgages and some will but will restrict the amount or the LTV. Santander for example will only allow capital raising for Home Improvements and not the reason you are requiring.
The second mortgage will not be as simple as you'd like either as lenders generally don't like HMO properties, again Santander won't lend on HMO's for example.
Lender selection is going to be key as not all lenders will allow capital raising on BTL mortgages and some will but will restrict the amount or the LTV. Santander for example will only allow capital raising for Home Improvements and not the reason you are requiring.
The second mortgage will not be as simple as you'd like either as lenders generally don't like HMO properties, again Santander won't lend on HMO's for example.
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