btl - is it good in Lonodon?

[Hotpotatofood]

hi, we are a young family and thinking about extra income.. we live in london area and the rents are quite high. to buy the house for 2500 and rent it for 1300 a month - does it sound ok?

[Hotpotatofood]

sorry house for 250 000

[Hotpotatofood]

ok. maybe 270000

[showtunesgirl]

I live in a cheapish part of London and the one / two bedroom FLAT we live in would sell for about 275k right now.

And they rent out from 800-1200 so I think that your figures are way off.

[Chopchopbusybusy]

I agree with travelin that you need to do a lot more research. It's attitudes like yours that really piss me off about the whole buy to let situation. You obviously see it as easy money and something you need to put no effort into.
I am sorry if that sounds harsh but I would really recommend that you think again.

[Hotpotatofood]

TravelinColour, yes, it would be mortgage. i know it is hard work, but we are ready for it. my husband would like to cut hours at his work to be more available for kids, so btl would be a flexible arrangement so that we work around kids

[BoundandRebound]

270k for a house in London is laughable

[BoundandRebound]

Unless east like walthamstowe or tottenham

[showtunesgirl]

OP, I don't think you're listening. Your budget is far, far too low to buy a HOUSE to BTL!

[TheRealFellatio]

I think it depends what you mean by 'London' though. you could get a smallish house in the less attractive parts of suburban greater London for that money. But unless you can rent to people claiming full or part HB they won't be particularly desirable as rentals, and your BTL mortgage may not allow you to do that anyway.

You need to start at the very beginning. Like Julie Andrews.

[Hotpotatofood]

do you mean that BTL mortgage might have a clause in the contract to say that no tenants on HB are allowed?

[notcitrus]

Plenty of houses for 250 in zone 3, some in zone 2! But affording a BTL mortgage that allows HB tenants, and most renters end up on HB at.some point, may be a lot harder because banks are risk-averse gits.

[footyfan]

What kind of deposit have you got? Banks want a pretty high percentage on a btl these days.

You need to be more realistic with your figures and work out how much money you would make after mortgage payments, repairs, allowing for empty periods between rentals, tax on income etc etc.

Why do you want to buy in London? I'd suggest buying a student property in a cheaper area. Much better return on investment.

[TheRealFellatio]

Yes, many of them do.

[Alibabaandthe40nappies]

I think it would be very unwise to invest in something that you clearly haven't researched in the slightest.

[QuintessentialOHara]

Most BTL is 25% deposit these days.

[showtunesgirl]

notcitrus where are you looking as I am in Zone 3 and there are pretty much no houses for 250k here!

[HolidayArmadillo]

Being a landlord is no fun. You'd need to a lot more research into it than you seem to have done so far. And you know you'd have to declare the income right?

[Hotpotatofood]

yes, know about the income tax. footyfan, you recommended a student property in a cheaper area - which area would you recommend please?

[footyfan]

I'd pick an area which has a large student population, but reasonable house prices. I've been out of the UK for a while, so not sure about house prices anymore: but maybe look at Leeds, Sheffield, Hull.

You'll need to do your research on which are the best areas within those cities for students (good bus links etc).

Do you have any links to anywhere other than London? Maybe that could be a starting point?

[notcitrus]

3 bed terraces for under 250 in Streatham Vale, Norbury, or east Greenwich aka Westcombe Park way. And rent would be around 1300. Question though whether that would cover mortgage payments plus insurance, maintenance etc. Unless the deposit is about 40% I doubt it's affordable.

[Lonecatwithkitten]

I know a professional landlord in London. They could only reduce the amount they worked for others when they got to 10 properties. They no derive all their income from property, but have a massive portfolio buying and selling things every month.
I have done BTL by the time you have covered insurance, paid your tax and covered the mortgage in any voids there is very little profit left certainly not enough on a single property of the value you are considering to work less.

[QuintessentialOHara]

I suggest you do some proper research, both into areas, what price ranges for rent for property prices, what sort of mortgages, how big deposit, etc. Make one big spreadsheet where you add all the costs, and work out whether it is profitable or not.

[mrscog]

Also think about the ethics - are you really comfortable with someone poorer than you paying you loads of cash so you could accumulate assets when if they just had a deposit they could buy a house of their own for the cost of rent each month?