buying a first house to let.?

7 Responses to buying a first house to let.?

1. DTB says:

   February 10, 2011 at 12:33 am

   Depends on where you live.

   I live on the coast of NC, and property is a steal right now.

   Bought a 20 year old 1600 sq. ft. house on an acre, with an inground pool, 6 miles from the ocean for a little over $160,000.

   No Joke.
2. Misty A says:

   February 10, 2011 at 12:33 am

   I would invest while the gettings good do it while interest rates are still low and properties cheap rent it and use it later for yourself what a great way to get you a house for the future
3. heavenlees says:

   February 10, 2011 at 1:30 am

   Toen houses in the north are still reasonably priced, renting can be a nightmare so I’d think long and hard before rushing into anything, unless you have trusted friends/relatives to rent to. look on the net for the best mortgage rates, I wouldn’t expect to pay more than 1% above the base rate of the bank of England
4. Nutty Girl says:

   February 10, 2011 at 2:27 am

   first check with estate agents in your area what rental prices you would expect for houses in your area ,i think because you are renting you can get a different mortgage I’m not to sure on this but some good estate agents would be able to advise ,also you can decide on if you want private tenants or dhss ,some estate agents for a small fee even do the whole renting for you they find renters and get the rent for you as you sit back getting the mortgage paid .
   Any time now to buy is good as prices just seem to being going up ,if your area has some redeveloping going on that will improve the surrounding areas look into near that
5. ReggieQ says:

   February 10, 2011 at 3:25 am

   What you’re planning on doing is an excellent idea. You’re getting into the property market early – just as I want my kids to do as soon as they start earning. The first thing you need to do is sit down and decide how much you can afford to pay out every month on a mortgage, while still covering your living expenses (eg not scrounging off your parents as they shouldn’t be subsidising your investment!) bear in mind that you are young and will need money for clothes, going out etc. so be realistic. When you’ve decided on a figure, you are ready to shop around the various banks, financial institutions for the best value mortgage. This can be a bit of a minefield of contradictory information, but all you are doing is finding out who is prepared to lend to you at the best value for you. I would stay away from brokers and people who take commission and go straight to the banks.
   The next step is to study the property market in an area that you already know. Start off with an apartment or a 3bed townhouse in an area that has a brisk or rising rental market, without paying more than you can afford. Bear in mind that you only calculate that you will be receiving rent for 10 months of the year as you have to expect tenants to leave early/gaps between tenants etc.; you’ve got to furnish the place and make it attractive, and if you don’t want to handle tenants yourself, pay commission to a rental agent, who will manage the property for you. Also, make sure you have a plan if things change with your job etc.
   Good Luck!!
6. ttc_special10 says:

   February 10, 2011 at 4:12 am

   To get a buy to let property, you will need a buy to let mortgage. It is not a simple as just getting a normal mortgage and then moving your tenants in. Your lender will not be happy if they find out you are doing this.

   The benefit of a BTL mortgage is that it takes account of the yield of the property, rather than your earnings, meaning it should be easier for you to get a mortgage.

   IMO i think that BTL will continue to grow as first time buyers cannot afford to get on the ladder. The market will have to self correct (i.e. fall) at some point, but this doesn’t necessarily mean bad news for BTL.

   Good places to invest are usually regeneration areas and areas close to train stations etc for commuters. Beware buying student properties as although they are good at generating cash, they are very costly and will often need large scale change to make them HMO compliant.

   Popular types of property vary from place to place, but IMO 2 bedroom terraced houses and one bedroom flats are the best for popularity and low cost.

   First step is to speak to an Independent Financial Adviser, as they will tell you how best to invest.

   After that, do plenty research on what you are doing, where you are doing it and how much it will cost in a worse case scenario!
7. alanwoollcombe says:

   February 10, 2011 at 4:34 am

   Good idea – I’d recommend anyone to get on the property ladder as early as possible and, if your parents are happy for you to continue to live at home, good for you.

   Before getting into specifics, I should say that all of my suggestions relate to the English property market – I know nothing about buying property in America, so just take it as a few general pointers if you’re not based in the UK.

   Firstly, if you are buying a property to let out, then there are specific buy-to-let mortgages available – that’s what they are called. The lenders will only lend up to a certain proportion of the value of the property AND only up to a certain proportion of the likely rental income, less a certain amount for bills (repairs etc). What this means in practice is that, if the rent is (say) £500 a month, the mortgage lender won’t lend you more than what (say) £450 monthly repayment will get you. These figures are guesstimates, BTW.

   You need to get hold of a good Independent Financial Advisor (IFA) to check out all the buy-to-let mortgage options available for you, but they will be based far more on what rental income the property will be likely to fetch than on your own income. Don’t worry if this sounds complicated: a good IFA should be able to lay it all out for you. In fact, if I had to stress one thing above all, talk to one BEFORE doing anything – no ifs, no buts. It might sound as if your local bank is offering you a good deal, but an IFA could well sniff out a better one. Trust me – I’ve bought and sold a few properties, so I do know what I’m talking about.

   As for talk of a market bust, ask yourself this: is your aim for the short, medium or long term? For the medium and long term, property values consistently go up. In the short term, there might be market ‘adjustments’ (read: price drops). Again, a good IFA will be your best bet – it’s his job, after all, to have a better insight into these things.

   Best types of property to let out: first, work out your market. If you live in an area with lots of students needing accommodation, then go for what they want (cheap, small). If it’s in commuter belt territory, corporate lets might be the thing. Or how about short-term holiday lets?

   If in doubt, ask the experts, and the experts in this case are local letting agents: again, it’s their job to know what the local rental market is like, what rents are, what’s in demand. They should be willing to pass on this information to you because, hopefully, you’ll go ahead and buy a property and ask them to manage it for you. And incidentally, for a first timer like yourself, use a letting agent – they will charge a percentage fee of the rent but will save you some major headaches. The best ones are members of ARLA, the Association of Residential Letting Agents.

   One option you might be interested in is a scheme that some educational institutions run. Their own accommodation department will offer to take over the property for you, deal with tenants and any maintenance issues, guarantee a fixed rent each month regardless of whether they have filled the place or not, and also guarantee to return the property to you at the end of the contract in the same condition it was in when the contract started. This is a fairly new development, because in the past landlords were unwilling to rent to students because their properties were being trashed. It might be worth contacting any local colleges to see if they have such a scheme available. It would save on the letting agents fees, and you would have a guaranteed income.

   As to where to buy, ask the local letting agents, and also check through the property papers and websites both for house prices and rents. As a general rule, look out for new transport links (tube stations, tram lines, airports) which usually mean more people will want to live in that area, as well as for large institutions such as hospitals and colleges with staff needing accommodation. From your own point of view, try to buy in an area you know and that is reasonably local: yes, you might find somewhere cheaper 100 miles away, but if you need to visit the property for any reason, you’ll be cursing if you’re miles away and don’t know the area.

   So your steps from here should be:
   1. Find a good financial advisor.
   2. Ask around letting agents for where and what to buy.
   3. Look in the property pages for prices and rents.

   Good luck!