Is this doable - Buy to let property

[Itonlymakesyoustronger]

Hi All! About to get some inheritance money and wanted advice on whether I can buy a buy to let property with that inheritance money despite not earning enough to get a normal residential mortgage. I already have a mortgage in a smaller property and my income has halved since buying my home. But with the inheritance money I could pay about 30% of the buy-to-let home and get a good amount of money per month to cover the shortfall of my wage now that it has been halved.

Yes you can. There are some good Facebook groups that have specialist brokers on that would be able to give you more idea. You generally need £25k pa income though.

I don't have Facebook I'm afraid - but any advice here would be highly appreciated :)

Not sure about your logic. Why not just use the inheritance to pay off the existing mortgage? Is that mortgage on your home?

If you put the money into a BTL:
you will pay the extra 3% stamp duty. That's money that you will never get back.
You have the hassle of being a landlord. The government have made being a LL quite onerous these days.
Any income and capital gain made on the BTL will be taxable.

Why not just pay off some / all of your mortgage so you have reduce outgoings to match your reduced income?

It’s doable in the right circumstances: but that “good amount of money” you think a BTL would bring in wouldn’t necessarily be so once you’d paid income tax on the rental income (and virtually no tax breaks for landlords left now), paid the mortgage payment on it, paid for your various property and landlord insurances, and put some money into a sinking fund for repairs and maintenance. You may well be better off paying a chunk off your residential mortgage and lowering the monthly payments giving you more disposable income.

I agree with @senua. Pay off the mortgage you've got rather than trying to make money doing BTL. Or invest in the stock market if you really want to grow your capital. Buy to let landlords are contributing hugely to the housing crisis in this country.

Yeah I think you need to check your sums very carefully.

You could get a BTL mortgage at a 70% loan to value but I don't think the income would be anything like half a wage. You have tax, insurance, your emergency fund (what if you get terrible tenants that don't pay you for six months, how on earth would you manage your mortgage payments?), repairs, replacements, empty months...

And by the time you pay stamp duty and decorate and furnish a house, you won't have anything like 30% left, come to think of it.

I agree, pay off at least some of your existing mortgage. Invest the rest, if you want to have a go at creating a second income stream.

I personally wouldn’t touch a BTL right now, it’s too risky. The legal stuff and costs of being a LL would put me right off, especially if you rely on the money to make up your income. I’d probably consider it if I could afford to pay all the costs of it without a tenant. I think I’d get better returns from my S&S isa (currently up 18%) without any of the hassle.

I wouldn't touch BTL now, you sound like your struggling for cash, how will you cope when you're between tenant and two lots of bills to pay inc the mortgage and council tax?

Pay of the debt you already have.