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Original poster

Let to buy. Is it honestly worth the hassle?

14 replies

OrmRenewed · 13/04/2010 21:24

Mortgage advisor came to see us tonight and thinks we shouldn't sell. We should let it out instead. DH had a face like a smacked arse the entire time - he is NOT convinced.

Anyone do this? Is it worthwhile?

OP posts:
BooBooChicken · 13/04/2010 22:01

we are in the throes of just this, on the advice of our mortgage advisor too. fingers crossed it turns out ok, as it's scary stuff financially..!

Original poster
OrmRenewed · 14/04/2010 08:18

That was what I was thinking booboo. We are cowards financially - horribly sensible. DH doesn't like the 'capitalist' aspect of it . But it was the very first thing the advisor suggested.

Good luck with it. Do you have tenants lined up? Are you confident about keeping the house occupied? Sorry for the questions.

OP posts:
OracleOfDelphinium · 14/04/2010 08:23

I think it's a fanastic idea, but I'm a property porn queen. You can never own (or be in the process of owning) too much property. I'm rather a coward about finances (never even had an overdraft as a student), but I think two properties are always better than one. We have four, with mortgages on two (including the one we live in). We let out the other through an agency, and have a great tenant.

assumetheposition · 14/04/2010 10:06

I'm a financial coward too.

I can see why it would be worthwhile if you have a great mortgage deal already.

However (without wishing to be doom mongering) there are many predictions that property prices will fall and interest rates will go back up.

Have you worked out how you would manage financially if, worse case scenario,

  • one of your properties was vacant for 3 months
  • the value of both properties dropped 10%
  • interest rates went back up to 4 %

I have no advice really except that you need to know that you won't be financially ruined if all 3 happened at once.

Original poster
OrmRenewed · 14/04/2010 10:40

assume - that's the point. I am terrified of that happening. And I am not convinced there are enough of the 'right kind' of tenants in this town - not students and not families (or so advisor suggested). He rents out properties in Bristol, very different from here.

OP posts:
auntieB · 14/04/2010 10:48

I let out 2 properties and plan to do the same with my current house when I move on; although I would only recommend this if you have low % loan to value. The main thing to consider is how you would pay the mortgages on all your properties if they stood empty for a while.
professional sharers seem to be the most likely tennants.

assumetheposition · 14/04/2010 10:49

Now, I speak as someone who sold at the bottom of the market and has been renting for 12 months, unable to find somewhere to buy - so I'm very bitter and twisted about the property market

BUT

first and foremost, your property is your home and, if you have children, that has to be your priority. It's not an investment and it's not about how much money you win or lose.

Whatever happens to house prices it makes no odds as long as you have a safe and comfortable roof over your head.

These are the same mortgage advisors who told people it was fine to have a 110% mortgage at 6x salary.

Unless you have acres of spare cash to invest, and a sturdy will, I would say sell now, rent for a bit until you find another home for you to buy.

But then that's probably why I'll never be rich

BooBooChicken · 14/04/2010 13:22

Orm, we don't have tenants yet, but have good local contacts and are hoping to let by word of mouth and manage it ourselves.

we are looking at this as a short term plan and have a fixed rate for this period. if it all goes swimmingly, then after that period we will carry on letting. if we have had vacant periods or are just finding it all a bit too scary, we plan to sell and hopefully the market may have picked up.

btw, we never went down this road to make money - just to cover costs/break even. (in order to buy our new house, we needed to be chain free and able to conclude quickly.)

let us all know how you get on

BeenBeta · 14/04/2010 13:47

Orm - do not do Let-to-Buy. If house prices drop you will have two houses falling in value. It could ruin the rest of your life. I am really with your DH on this.

Your mortgage advisor is tryng to sell a mortgage in a market where there are very few mortgages being sold. He/she is desperate for commission. This Let-to-Buy thing is just the latest miselling scandle in the making for the financial serices industry.

The RICs survey out yesterday showed the housing market is faltering again after a brief false bounce.

noddyholder · 14/04/2010 15:09

It is a terrible idea and house prices are starting to fall again here in the SE so would assume post election this will continue.Beenbeta is right a lot of people bought in the last 5 months egged on by what they thought was 'recovery' when in fact it was just a fake boom caused by silly unsustainable interest rates and the bank printing £

Original poster
OrmRenewed · 14/04/2010 18:23

OK thanks everyone.

My impulses are to avoid but I just wondered if I was being a complete wuss! I want a house to live in not an investment.

Just waiting to see what deal he can get us for a good old fashioned variable rate mortgage then.

OP posts:
MillyMollyMoo · 14/04/2010 22:39

Another idea which we may go for in a year or two is to let out your property and then rent another bigger house.
We can then move back into our current house as the DC's leave home.

Ihatebeingfrugal · 15/04/2010 12:26

We did the same thing 3 years ago.We had to buy our new house quickly as the houses on the street we bought on very rarely came up for sale.Renting our old house out enabled us to buy the property we would be staying in for the rest of our lives.(I am NEVER moving again). My husband was always reluctant to do the buy to let as well,and the agreement was I dealt with it all (which I still do).

If you have found a property that you desperately want to move to - I would say look into it thoroughly and consider it.If it's not for you then don't go ahead.

We now have 3 buy to lets and have had long term tenants in all of them. As long as the rent is paid/mortgage paid it is no stress to you as landlord. It's when the tenants are late paying, or miss a payment that it becomes problematic so you should always have a contingency of a few months rent. I would also use an agent to find a tenant and run it for the first 6 months. The agent will also have a pool of electricians/gas men/joiners that they will send out to do repairs etc so (in theory) problems can be dealt with immediately.

If you have any specific queries I could help with, I would be happy to speak to you

glastocat · 15/04/2010 12:30

It's a terrible idea. Look at Ireland to see what could go wrong. Prices here have dropped 40% leaving half the country in negative equity. My mum bought a buy to let flat a few years ago, drug dealers moved in next door, it was flooded, and now she is facing down 30k plus negative equity, which she is going to have to sell her house to fund.

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