Looking for some property investment advice.

[littlewhiteclouds82]

I am a single mother and currently earn approx £42k a year. I own a flat I currently rent out and am looking to sell it. I have had some good valuations and if I sell at the top range I look to have £250k in equity.

I want to try and do something smart with this money. Possibly buy a two bed flat for me and my son to live in and then buy an investment property I could rent out. I live in the south east and a decent two bed goes for £325k and a decent one bed £250k! Am I living in cloud cuckoo land think on my wage I'd be able to do this? I'd be able to sent the one bed flat out for around £1100 a month!

I've just had the idea, so haven't done much research or talked to anyone regarding mortgages but wondered if anyone with prior experience could advise? Or is these something else I could do, aside from property that would be good to invest in?

Appreciate any advice, thanks in advance.

I just do not think that you’re in a position to do this

focus on getting a nice family home for you and your child

Where are you currently living?

@BranchGold I rent! My flat is too small for us to live in!

@steamedisbest thanks! Probably not... just feels a lot of equity as you said maybe your option is better!

it isn’t

and certainly not for the SE

buy a nice family home Op and put an investment home out of your mind

@steamedisbest I only say as people earning less than me get mortgages for 1 bed places with £20k deposits! £250k is a fair amount for what I'm looking for (yes small amount if I was looking for a 3/4 bed house)

Hey , I'm a mortgage broker and you could definitely do this ! X

@red5678 oh, this sounds quite optimistic 😊

If that's what you want to do, how does selling the current property help?

Do you mean you would use all this equity to buy a rental (which you already have) and get a mortgage for a home to live in? If so, why sell?

How much mortgage do you have on the rental now and what is the rate? Do you have any other savings to use as a deposit fur the family home property?

It seems slightly unwise to me. I would concentrate on having a decent family home with a low mortgage and build up other savings as a safety net, before you think of any other type of investment.

You need to work out the sums. You'd need at least 25% deposit for a BTL mortgage. With the rest of your cash (minus all buying fees for both properties) what size mortgage would you have on the 2-bed and could you afford it?

Also, are you up to being a landlord? Far less easy than it used to be and tax position is less advantageous.

@JimBobsWife thanks for the advice! I'll do some sums later! I've been a landlady for over five years! So know the ins and outs and yes much harder than it used to be!

@VanGoghsDog totally get your point! The property I own is in a very desirable area! However, it's a share of the freehold in a period property so constant maintenance issues. I was looking to sell and purchase something closer to where I live. Which is slightly easier to maintain/manage!

I don’t think it’s impossible, it depends on the price of the properties you want to buy.
Would it work if you put 65k down on a one bedroom place and get a but to let mortgage and put the other 180k ish towards a 2 bedroom place for you and your DS and get a 170k mortgage? Or look at cheaper areas for a BTL?

Or could you keep your current property and remortgage it to raise the deposit you need to buy somewhere to live in?

I wouldn't buy an investment property at the moment, until Labour are clear on their housing policy. The risk is high currently, and higher if s21 is disposed of.

Having said that, I'm hanging on because although the risk is higher, the correction in the market rents recently means I get an OK return.

If you do it well, with a good property in a very good area, that you maintain well and upgrade accordingly, and you can get a higher rent, the return will be worth it. I've just done a mini reno on one of mine, cost £8k. But the rent is £1400.

The key to an easy life is the area. You get better tenants who are on the right wavelength so they cause few problems. Providing they tell you when there are problems in the property, so you can sort them, you do regular 6 monthly inspections so you can spot potential issues, and you're good with people but can be assertive whilst maintaining professionalism, why not.