do my BTL figures make sense?

(5 Posts)
letterenvelope Wed 07-Aug-13 17:28:04

we are thinking of buying BTL flat in London. cost 190000, deposit 25% . interest only £700 ta month. Rent 900. yearly profit, provided rented out every month is £700? this cannot be right? At the moment we have offset saving - which lowers are interest rate on our residential mortgage ( because of offset savings we pay 116 less every month - £3.53% of the whole offset amount). I thought to take out offset savings and invest into BTL, but now can see that BTL will give me just £700 profit a year, plus maintenance cost etc... am I right?

Rockchick1984 Thu 08-Aug-13 08:56:28

Surely its £200 per month profit so £2400 a year? Will there be other costs associated with it that you need to take into consideration such as ground rent, service charge, management fees, maintenance costs?

specialsubject Sat 17-Aug-13 20:30:10

...and allow for some void periods too. Even though it is less likely in London.

LadyKooKoo Fri 23-Aug-13 21:30:19

I agree, £200 per month is £2400 a year. However, if it is interest only I wouldn't consider this 'profit' as you would still need to put money away to clear the borrowing at the end of the term. Also, you will have agent fees (I assume) and maintenance. If you are working then you will have to pay tax on any profit too.

RCheshire Sat 24-Aug-13 20:04:25

There's an article in today's telegraph (or yesterday's) talking about all the things people may fail to consider when going into btl. Worth a read.

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now