advise for invesent/buy to let

[akashshah1907]

Hi everyone. I am new member to this group. I would really like some expert input on how to invest. Basically I have a savings of roughly £60k. Recently I applied for mortgage and I got agreement in principle worth £100k. I live in London. So initially I looked for one bed flat worth upto £160 k and I looked as far as Dagenham but there is not really any good choices within my budget. It looks like getting just a one bed flat in London will always be a dream!

Rather than buying in London I am now thinking to buy something in Manchester where I could buy decent property worth £120k and once I buy something in Manchester then invest rest of £40k to invest in buy to let somewhere outskirts such as Basildon or grays area.

I would really like some expert advise/opinion on what I am doing should be viable? What can be pro and cons I should be aware of? Thank you.

I would also appreciate and welcome if any one has better advise than this.

going into buy to let is not a matter for a short posting on a forum. There is a lot to consider, a lot of expense and a lot of risk.

BTL mortgage tax relief is reducing (and as a landlord I think rightly so) and will reduce even more. You need to look REALLY hard at the sums.

Hiya I'm a FT property investor..
Couple of points:
You have a Agreement in principle (AIP) for a residential mortgage. Therefore YOU have to live in it. If you don't you will be breaching the terms of your mortgage. So if you're not moving to Manchester to live in this property you can't use it as a buy to let.

You will struggle to qualify for a buy to let mortgage if you don't have a residential mortgage first.

I invest in London -it is possible to get a 1 bed flat in for your budget depends how much time /energy you got to find it. Well done on the creative thinking though! You have the making of a property investor

Greetings TC13 and SpecialSubject.First of all Thank you for your advise. I am well aware of the fact that I am not meant to rent on residential mortgage however at the same time I rather live in one box room in London than move to Manchester. I did tried to get something into London, infact I went in to view one property for £160k and put my offer forward, Landlord accepted the offer and next day declined because he got higher offer! I have start to realize that I am living in the world where money is the only important, I dont blame the landlord who rejected my offer but it made me realise making money is the most important thing. Tc13 I am not sure when you did your last property search but believe me there is nothing below £180k anywhere in London including Dagenha! Even if I might find some cardboard box type property in my budget , there is a very high chances that i would be guzumped! So drastic situation calls for drastic measures. There is a saying in my country which goes if you can't get butter out with straight finger then you have to bend your finger :)

After hours and days of researching I have manage to get one bedroom 39 meter square new build property in Stevenage ( its still subject to mortgage approval!). Really I feel sad that I have to move buy something way out of London just because London homes are a business for bigger fishes.

Anyway I have come to realize that in order to secure my future in old age I have to buy a property which will give me income when I get old. But same time I do not wish to live in Manchester! So it has to be the residential mortgage to get into property ladder at first and then spent another half of cash into BTL.

Specialsubject I do agree with the fact that BTL isn't easy as writing a post on mumsnet but then again what else is easy if you want to secure your pension for old age? Everything in life is required research and sound decision and I am prepared to do it.

Is any of you aware that what could happen if I breach my mortgage terms ? How will lender find out if I am renting out property? Is there any other areas surrounding London which I am not aware of where I can find something in my budget?

Thank you for mentoring guys and hope to speak with you again soon. Please feel free to inbox me if it would be more preferable way of communicating? I would really appreciate your advise million times. Wish you well.

oh boy.

yes, if you breach your mortgage terms you WILL get repossessed. You can then wave goodbye to future mortgages. And they WILL find out. 'they' were not born yesterday.

you also need proper landlord insurance. Again I repeat the story on here of the person whose tenant burnt the house down and hadn't declared they were renting. No house - but still a mortgage.

what you want and what you can have are not always the same. Life lesson. Do things properly, it really is easier.

also look into a pension. Spread your assets.

Hiya again,

Lenders will do spot checks to see if you do live in a property with a resi mortgage.

Other ways they may find out...
If you fall out with your tenant they may alert the Lender...
They may ask why you are Moving to Manchester. If you say for work they may call your employer.
There not silly there's lots of other ways!It really isn't worth the risk!

I've just done a rightmove search-
Found plenty of studios in your budget
A couple of nice 1 beds near Croydon.... Also a few decent ones in east London So not sure where you're looking?!

Also look at unsold Auction lots/ leaflet dropping are all other ways to find a good deal!

I hope you don't breach your terms and find a property that's right for you!

Hello again. thank you for your advise. I am still researching things so I will probably try my best not to rent it on mortgage or just sublet rooms and keep one room for me. I was advised by some people that as long as I am paying their mortgage and I am registered on electroral roll to the address and if I redirect mails it would not be a problem! It really is a tricky situation for me because I really need a flat/house to live probably in future but my job is in London. I rather prefer to get buy to let mortgage but I will only get buy to let mortgage if I have residential mortgage. I would speak with mortgage brokers to see what my options are.

I am really not very keen on studio flats but than again I might just have to settle down with studio flats if this is the case.Where about in croydon did you find within my budget? Because even if it is there in my budget there is a very good chances that someone else would put higher offer and I am back to zero.

I am also looking at new build off plan properties in stevenage which will be ready soon in few months time. I will keep you guys updated. meanwhile if there is anywhere you can suggest than please help me.

Thank you for advise.