Should we wait to do our first buy-to-let

[dogmum00]

We have just received funds to do our first buy to let but now with interest rates rising and BoE possibly increasing the base rate again should we hold off for a few years and invest the money into something else?

Unless you can buy outright, I would put your money somewhere else. Even then I would wait, house prices are going to drop

Have you looked carefully at the tax implications? Is one of you a non tax payer and do you plan to have the property in their name?

How big’s the deposit and the loan? I was considering buying a btl property to give to dd1 when she wants to leave home but in my area - even with a 38% deposit I would end up with no profit on a repayment loan and a small profit on an interest only. It would be hard to even break even assuming the flat needed work at times and I would pay for a letting agent.

I would have to hope that the flat needed only minimal work and that rent would continue to go up - but I know times are hard and don’t really want to be the type of landlord who screws their tenants ever year with a big rent increase.

I am from INDIA. If i am at your position....
Buy house when you are Staying in that. If you give on rent, some tenants may not keep the house properly and do damages.

NOTE : PLAN AND SAVE FOR YOUR RETIREMENT.

Drip it into your pension. I have never known a pension-fund call you up on Christmas Day demanding that you come round and repair a boiler I have most certainly had tenants do that.

What funds have you just received? (obviously one can't invest an agreed mortgage loan into "something else")

I would certainly hold off committing your capital and assets to BTL. Find somewhere more secure to keep them.

The UK economy is in very deep shit, job insecurity is going to affect rent tenants and the last thing inexperienced LL's need is a tenant that through no fault of theirs suddenly can't pay the rent for the many months it takes to go to court and evict. Meanwhile you're still paying all your LL costs, interest on BTL loan, monthly charge to letting agents, property insurance etc.

I have a few properties but I wouldn't enter the market at this point. Too many unknowns with a possible labour government in 2 years time, new legislation, possible ban on evictions threatened this winter, possible epc necessary of C, ending s21, new requirement for co alarms (although I provide these anyway), huge rises in tradespeople charges and that's when you can find them.

If you are serious do a course first on how to be a landlord. NRLA do good ones.

I wouldn’t! My brother is currently selling his BTLs and an HMO because of the rising costs and uncertainty and so is another landlord I know. They made money on it a few years ago, but from what I understand the cons are definitely outweighing the pros at the moment. I’d review it in 6+ months time and see what the market is doing then.

I wouldn’t buy now I mean!

Stress test your prospective mortgage payments with much higher rates (unless fixing)...assume no rent paid, can you cover your costs?

If the stats add up then buy if its a good deal....you can get ins for loss or rent etc which pays out and covers eviction costs if needed....i have claimed...no issues...very easy....if you can earn above what bank pays in interest then its a good deal and maybe some appreciation....i inherited 120k so looking to get another house....have one rented out for years....all paid off....its good easy money as long term nice tenants and i charge below market rent.