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Is Buy to Let a good use of a spare £100k?

(86 Posts)
ChocolateWombat Sat 13-Jan-18 10:25:05

So, mortgage paid off (house value approx £500k) and no debts. We have £100k in savings.

Considering a buy to let property. Round here, can't get anything for less than £200k so would need to borrow £100k. Is this a good idea, what with stamp duty on buy to let and other taxes. Would be an investment for at least 10 years.

Would it be better to do it somewhere where a property could be bought more cheaply, but probably less capital growth potential and less rental income? Or is there a better thing to do with £100k? Interested in the future rather than generating immediate income.

Leatherboundanddown Sat 13-Jan-18 10:26:56

You could look at Nottingham or Derbyshire where a property bought for that could probably make you 500-550 pcm in rent.

AtSea1979 Sat 13-Jan-18 10:28:35

I’d buy somewhere up north that will grow in the future rather than somewhere already expensive.

RaspberryPi1 Sat 13-Jan-18 10:30:40

No. Unless you are prepared to run it like a business. Will be stressful at times, property may not let quickly etc...

foodtime Sat 13-Jan-18 10:33:46

Please don’t, we have enough shit landlords as it is

MissT84 Sat 13-Jan-18 10:34:13

I agree with looking up north. A house near us was bought for £45,000, They spent about £10,000 doing it up and now rent it out for £450 a month.

On average they sell for around £60,000 in good condition....and its been pretty stable at this price for quite a few years. So you may not get a higher yield from resale....but you would definitely get back what you paid for it, plus whatever rent you get is extra.

C0untDucku1a Sat 13-Jan-18 10:35:29

If i had a spare £100k id buy a cute house in france and holiday there. A lot.

etap Sat 13-Jan-18 10:36:31

I'd like a Pinarello Dogma F10 please. Leaves you with about £92k to play with and I'll be a happy bunny grin Thanks in advance! xxx

mumpoints Sat 13-Jan-18 10:36:32

Holiday cottage?Then you could use it yourselves occasionally whilst getting an income.

Is it possible to get a holiday property (in a popular area) for that price?

Gladiola44 Sat 13-Jan-18 10:36:47

Yes definitely, I would get somewhere near you where you know the area well if you can. It makes it so much easier to visit the property if needed. Buy-to-Let isn’t popular with posters on here but it’s really one of the best investments for your money in the uk. As an island, property will always be sought after.

GnomeDePlume Sat 13-Jan-18 17:07:47

If you can look at what properties are renting in the area you are thinking about and see how quickly they get let. If you're thinking of student lets then you really need to be ready well before the summer.

BurningStar Sat 13-Jan-18 17:09:16

Our house is worth £116,000 and we're renting it for £625 a month!

ilovewinterpansies Sat 13-Jan-18 17:12:45

How profitable the property will be will be largely based on your current income.

We have a rental property but as higher rate taxpayers are paying 40% on our rental income.

If your annual income is less then obviously you'd be paying less tax on the rental income.

Peanutbuttercheese Sat 13-Jan-18 17:14:53

It depends, if you got a good long term tenant who paid on time then it is a good investment. Get a bad tenant that takes months to evict or destroys your property and not just spilling tea on your carpets you can wipe out all profit very easilyand be out of pocket.

Plus landlords have to make judgement calls about who to let to, would you do the background checks, would you pay an agent to manage your property. Could you stand to make those judgements because you would have to.

I would not risk all my savings in one deal, plus it may be high return but it's high risk.

ilovewinterpansies Sat 13-Jan-18 17:14:55

Also likely gains are apparently better up north than down south. The Times and Sunday times has an excellent property section that's worth following.

YellowFlower201 Sat 13-Jan-18 17:14:58

Foodtime- what on earth makes you think OP will be a shit landlord? confused

SusannahL Sat 13-Jan-18 17:23:44

foodtime, what a really nasty uncalled for comment to a genuine question from the op.

Op, I would take a chance definitely, especially as you are talking about keeping it for approx. 10 years. That length of time would allow you to ride out any possible fall in property prices.

I agree with those who suggest buying in a cheap area, say up north, but check with letting agents first to find out what types of property are most in demand.

We have let property over the years and without exception they have all paid off. We have only had the odd void period. The idea for us is to provide a good income for our old age, and so far we are on course.

BestestBrownies Sat 13-Jan-18 17:23:51

Bit of a leap there Foodtime hmm

OP, do it. As a long-term investment property is still the best way to go imho

Rudgie47 Sat 13-Jan-18 17:26:03

You have to pay for the upkeep of the property all the time and tennants can be wanting jobs done all the time as well. You have to have appliances serviced yearly and get the certificates etc.
If you dont have a tennant in you still have to pay the council tax and this can be more expensive if its a second home.
Also you have to get Insurances and pay the letting agent etc.
I know someone who wouldnt do the necessary jobs on the house and fell out with the tennant.The tennant then trashed the house totally.
I wouldnt touch it with a bargepole.

Oysterbabe Sat 13-Jan-18 17:30:11

We have a buy to let and it's been a really good source of income. It's a bit of a lottery with whether you get good tenants though. We've been very lucky so far. Plus the value of the property has increased massively. We'll probably sell it once our babies are grown up and use the money to help them on to the housing ladder.

Oysterbabe Sat 13-Jan-18 17:30:27

We have a buy to let and it's been a really good source of income. It's a bit of a lottery with whether you get good tenants though. We've been very lucky so far. Plus the value of the property has increased massively. We'll probably sell it once our babies are grown up and use the money to help them on to the housing ladder.

specialsubject Sat 13-Jan-18 17:33:09

Ignore the jealous bitching. Savings rates are well below inflation and stock market at record high. There's nothing else you can do with the money. Mind you, even mark Carney can't work that out.

Bad idea if you take out a mortgage, are in Scotland, cannot afford all the insurances (malicious damage, legal expenses, rent guarantee, home emergency,plus buildings and contents). You will need full knowledge, a good agent ( they do exist but conduct tough interviews), the time to monitor what is going on. Property needs to be in immaculate condition, take a full inventory.

A good tenant pays the rent, reports anything that needs fixing and doesn't start a drug den. Anything beyond that is up to them and not your business.

Budget for agent fees, redecorate every five years, new carpet every eight. Buy somewhere with two independent sources of heat and two of hot water.epc should be c or b. Nowhere is a and below c is too risky for future legislation.

MrsPicklesonSmythe Sat 13-Jan-18 17:34:52

My advice is to join several landlord forums/Facebook pages and learn the ins and outs of what landlords deal with on a day to day basis. You’ll be amazed at how much you don’t know.
I’ve just started renting my property out last year it’s not been cheap to do (I live in an area where landlords have to be licensed too) and there’s every chance the tenants my just decide to stop paying one day/trash the place/anti social behaviour etc
Couldn’t advise on areas to look at etc but see what you’re letting yourself in for first.

Frequency Sat 13-Jan-18 17:35:44

Please don't look up north. We're being overrun by southern buy to let LL who don't have a fucking clue. It's so bad, the councils in certain towns and areas are trying to push through an extra tax on buy to let houses in worst affected areas. It is literally ruining our towns.

I've been forced out of my home by buy-to-letters. When I moved in, our street was quiet, then the buy-to-letters moved in. Next door but one is a crack addict, constantly screeching at her boyfriend and loudly threatening to kill him most Saturday nights. Over the road appears to be running some kind of Bull dog breeding/boarding facility and three doors from him is a delightful family of alcoholics who enjoy arguing with the aforementioned crack addict.

Every house that goes up for sale (now the owners have had enough) is bought by a buy-to-letter who has no clue about the area and ends up having to let to addicts because no-one else will live here.

MrsPicklesonSmythe Sat 13-Jan-18 17:36:33

And everything spdcialsubject says!

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