matt85

Hello.

Im growing up a bit these days and want to get my feet wet in the world of property and could really do with some advice.

Im 21 and fancy the idea of buying a house to let out with the intention of selling up in perhaps 3 years or so to hopefully release some capital to offset the cost of a very expensive training course I plan on doing. Getting back on the property ladder after that would not really be a major concern as I plan on moving abroad shortly after qualifying.

I am fortunate enough to earn a pretty decent wage and between my job (which is awful and stupid hours) and a genuinely profitable tax-free hobby which is gambling (best keep this bit quiet I think), I earn around £40k a year (possibly soon to go up further, but not on paper ) which should be ok for a decent sized mortgage. I also live 'oop north which should help me get something decent as well.

By the end of summer when I plan on applying I should have around £10k (maybe a bit more) saved up as a deposit. However, I was wondering whether or not a 100% mortgage would be an option? This obviously has me keeping the £10k cushion if any problems with filling it arise and also allows me to take a possible pay cut into a slightly less demanding job for a year or so if it all goes well.

Ideally what I want out of this venture is to rent the property out at cost or perhaps slight profit for provisionally 2/3 years although no set timescale as I am awre you cant predict these things from afar, sell up when the market goes on a nice upswing, take profit of whatever that may be and put it towards other things. How feasable do you think this would be?

Property is one thing I genuinely know very little about and I would be very grateful for any considered views and thoughts on this.

Thanks,

Matt.

Brendan Hughes

Easier for you to look at house prices and rents in your chosen area and do the calculations yourself, there's no national answer.

But I'd say 100% mortgage means higher repayments, means more strain on you if/when you have no tenant. Not sure if they'll even give it to you on a BTL, officially.

stilover

Best speaking to a financial adviser really. He/she will be able to advise you better than anyone on here.

Petem95

As it often mentioned, its a case of 'missed-the-boat' if you want to do buy-to-let and see a half decent return.

Inflation and interest rates are going firmly upwards pretty much all over the world now, August looks likely to see a 0.25% rise.

http://news.bbc.co.uk/1/hi/business/5074570.stm

This of course will have a knock-on effect on house prices, which are very overvalued by anyones standards.

Do your research before you do something silly with a very large some of money is all I can say!

MikeCardiff

iTrader: (2)

Unlikley you'll be able to rent out a property for enough to cover the cost of the mortgage payments - much more likely you'll have to pay in something yourself. In a lot of areas where prices have already peaked, the mortgage repayments will be around twice you can get in rent.

Also wouldnt have thought you'll get 100% mortgage for a BTL ( and you DO need to tell the mortgage company you are planning on letting the place - dont try and get a personal mortgage and pretend its for yourself ) - more like 75% to 85% so you'll possibly need a bigger deposit.

And.... dont bet on the property going up in value much over the next three years - prices are at their peak, and while a crash isnt likely, then a stagnant or bairly rising market is quite possible - you arent going to see anything like the returns people who bought three years ago would have now.

And ( again ) ..... what little you may make on selling it will be liable for tax, so there goes a big chunk of your profit straight away.

TBH property, especially letting is a long term investment - you arent going to see any massive returns over two or three years unless you buy a complete wreck really cheap, do it up, rent it for three years, then sell.

And seeing as everyone and their dog is now a 'property developer' ( rough translation - I've watched a couple of TV programs, bought a **** terrace house and put in some laminate flooring, and earned about 5 grand for 6 months work ) getting a bargain at auction to restore is very hard as theres always some muppet will pay way over the odds.

Would agree with the post above though, go and see a mortgage advisor and they'll be able to tell you what BTL mortgages you could qualify for, and what the likely costs are going to be so you can see for yourself if its worth the hassle.

matt85

So...

What everybody seems to be saying is that I have missed the boat and should, therefore, go to my local Porsche dealer and see what they can offer me?

hades

Some areas prices are still rising. If you're looking at a house to live in, buying still makes sense IMHO. I bought at a "bad time to buy" about 10 years ago, and if you combine the equity, the amount I paid off the mortgage, etc, you get somewhere in the £150-200k region that I now own, and still in my early 30s.

simpsons !

Try this site www.mortgagesearch.co.uk
The largest independent mortgage advisor in the uk FACT A mate of mine and looked after me for years, trust me, Ask for Ian he's the MD