btl - is it good in Lonodon?

(27 Posts)
Hotpotatofood Tue 09-Apr-13 12:17:35

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?

VanessaWarwick Sat 15-Jun-13 09:09:47

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mrscog Fri 19-Apr-13 22:31:06

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?

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.

Lonecatwithkitten Fri 19-Apr-13 22:24:06

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.

notcitrus Tue 16-Apr-13 14:06:29

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.

footyfan Mon 15-Apr-13 02:24:38

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?

Hotpotatofood Sun 14-Apr-13 21:07:09

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

HolidayArmadillo Netherlands Sun 14-Apr-13 15:02:51

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?

showtunesgirl Sun 14-Apr-13 14:56:56

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

Most BTL is 25% deposit these days.

Alibabaandthe40nappies Sun 14-Apr-13 14:38:55

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

TheRealFellatio Sun 14-Apr-13 14:27:49

Yes, many of them do.

footyfan Sun 14-Apr-13 13:38:45

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.

notcitrus Sun 14-Apr-13 13:23:46

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.

Hotpotatofood Sun 14-Apr-13 12:58:21

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

TheRealFellatio Sat 13-Apr-13 11:56:12

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. grin

showtunesgirl Tue 09-Apr-13 16:40:23

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

BoundandRebound Tue 09-Apr-13 16:31:55

Unless east like walthamstowe or tottenham

BoundandRebound Tue 09-Apr-13 16:30:21

270k for a house in London is laughable

Hotpotatofood Tue 09-Apr-13 16:29:06

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

Chopchopbusybusy Tue 09-Apr-13 12:38:48

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.

I think you need to do significantly more research, and I think unless you are mortgage free on your property, you would be crazy to invest more in the same asset-class.

showtunesgirl Tue 09-Apr-13 12:30:05

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.

Hotpotatofood Tue 09-Apr-13 12:27:46

ok. maybe 270000

Good luck finding a house for £250k in London.

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