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Property/DIY

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Original poster

What would you do?

19 replies

ohmypicklepie · 26/02/2022 09:04

We are in a position to have the following 2 options...

We are looking to upsize to our hopefully 'forever' family home. Our mortgage has been approved and it's more than we thought we would be offered.

We also have been offered to buy a doer upper apartment that is being sold under market rate for a quick sale. We could buy this, do it up to rent out and have this as an investment/ pension pot.

We would still have a good amount for a family home although not enough to do all the work immediately that maybe required. DH is a builder so wants a project we can make our own.

Or we just forget the BTL and concentrate all our funds on moving to and making our next home perfect. I think we should do this as I think everything always ends up costing more than you plan for. DH thinks it's is more sensible to invest in a second smaller property while we can and spend less on family home.

Any opinions?

OP posts:

JustJam4Tea · 26/02/2022 09:41

Get the BTL…..forever home Is probably a misnomer anyway. I’ve got a btl from when I was single 20 years ago. Best investment I made. We could have had a swankier house if I’d sold it but we’ve still got a very nice house.

Think of pensions if your husband is self employed. Also having to finish work earlier than you might have thought. Injuries etc if he’s that kind of builder. . so if you’ve got a btl you could sell that and keep main house if necessary….

EenieWeenie · 26/02/2022 09:43

I think your partner being a builder puts you in a good position. It really depends whether you can live in a building site for a year or two

bunfighters · 26/02/2022 09:45

If it really is under market value I think you would be mad not to buy it, especially if your DH is a builder and can do it up. I also think this 'forever' home stuff isn't helpful.

Original poster

ohmypicklepie · 26/02/2022 14:29

Oh wow, that's fairly unanimous then. I honestly thought I was being sensible but thinking we should put more towards our family home. Maybe DH is right. Think I'm just naturally a more cautious person so feel slightly worried about buying a BTL when a few weeks ago we hadn't even considered doing this as an option!

OP posts:

PragmaticWench · 26/02/2022 15:48

I'd consider if the flat is in a good location for rentals. Once done up, what would an average rental yield for a similar property in that area. Will you have savings available to cover things that need to be replaced straight away when you're a landlord, like a boiler?

We have a rental property and it's fine provided you treat it as a business, so you need to read up on landlord responsibilities and adhere to tenant law correctly. Also make sure you're not resentful that you can't have such a nice home to live in due to the investment. DH is fine with it but I've found it hard to live in a more crappy house because we've split our assets over two properties, even if it will give us an income one day.

Chestofdraws · 26/02/2022 15:50

Rhe mortgages will be very different op and if you want two properties and two mortgages you need to apply again.

labyrinthlaziness · 26/02/2022 15:51

The issue is what you value more really - financial security or an easy life.

It will be harder work to buy and do up the two properties, but it will (likely) leave you better off in the long run.

When I had the same choice I chose to buy only one, and it was the right choice for me. When push came to shove I didn't want to be a landlord at this point.

Aquamarine1029 · 26/02/2022 15:58

Do you really, really want to be a landlord?

senua · 26/02/2022 16:39

You have to pay extra Stamp Duty (SDLT) if you have more than one property. It is a percentage of the purchase price, 3%.
If your second property is the more expensive one then you will end up paying more SDLT because it is 3% of a bigger number. If your 'forever' was £500,000 (for example) it would cost an extra £15,000 in SDLT. Ideally you should buy 'forever' then BTL not the other way round. Is the saving on 'market rate' on the BTL more than the probable extra SDLT? Can you delay the BTL until you have found 'forever' (I understand that they are thin on the ground at the moment).

ILoveAllRainbowsx · 26/02/2022 16:41

@bunfighters

If it really is under market value I think you would be mad not to buy it, especially if your DH is a builder and can do it up. I also think this 'forever' home stuff isn't helpful.

Agree with this. Being a landlord is a hassle but your DH being a builder makes a big difference.

ILoveAllRainbowsx · 26/02/2022 16:45

@senua

You have to pay extra Stamp Duty (SDLT) if you have more than one property. It is a percentage of the purchase price, 3%. If your second property is the more expensive one then you will end up paying more SDLT because it is 3% of a bigger number. If your 'forever' was £500,000 (for example) it would cost an extra £15,000 in SDLT. Ideally you should buy 'forever' then BTL not the other way round. Is the saving on 'market rate' on the BTL more than the probable extra SDLT? Can you delay the BTL until you have found 'forever' (I understand that they are thin on the ground at the moment).

I think they will only pay the 3% on the btl. When they upsize, they will just pay normal stamp duty.

senua · 26/02/2022 16:49

Why not go for third option: buy the BTL now at a bargain price, add value by doing it up and sell for a healthy profit so you are back to owning only one property. This will give you (1) additional funds to buy the amazing 'forever' house without (2) the additional SDLT.
You can then buy another BTL, as and when.

senua · 26/02/2022 17:12

I think they will only pay the 3% on the btl. When they upsize, they will just pay normal stamp duty.
You might be right. Apols, OP.
But do option 3 anyway.

ILoveAllRainbowsx · 26/02/2022 17:14

@senua

Yes, probably an even better idea as being a landlord is a lot of hassle and very time consuming now.

Original poster

ohmypicklepie · 26/02/2022 20:07

Thankyou for all your replies. Lots to think about. I do understand the complexities of being a landlord as I used to work in lettings myself. The BTL can't be spun around that quickly as there are currently tenants in situ but could be done within a year as they are not planning on staying in long term. We have had finance options drawn up / advised on for both options and both are doable. My gut is saying to concentrate on sorting family home first, DH would rather have another investment / a pension pot but that means long term BTL rather than just flipping around.

OP posts:

Ohwhere2021 · 27/02/2022 07:11

WRT the SDLT issue I think as long as the second property is the cheaper BTL it’s fine. I have issue where only one of us owns previous property and need to buy a home closer to work. We are moving to more expensive area so need to sell first property though I strongly considered keeping it as BTL. This means higher SDLT on additional property which is also much more expensive than first home.

MsHampton · 27/02/2022 07:52

Why not just concentrate on your home and your family.

Property should be about homes not business. Just buy your house and be happy in it.

JustJam4Tea · 27/02/2022 08:26

Of course property is a business. There’s alaway a need for rental property. A good rental and good landlord is great. And why not establish a pension, the sooner you start the better.

MsHampton · 27/02/2022 09:15

@JustJam4Tea

Of course property is a business. There’s alaway a need for rental property. A good rental and good landlord is great. And why not establish a pension, the sooner you start the better.

It shouldn't be and I've known very few good landlords.

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