Sand Posted June 10, 2011 Report Share Posted June 10, 2011 Hi I have post some questions onto another forum and given basic info such as: House worth £182,000 I have inherited 50% Getting mortgage for £90000 to buy other half out Rent pm £850 Somebody pointed out that this is not a great yeild therefore perhaps not good to do. I really thought that this is a great investment as mortgage would by around £239pm. If I didnt I would sell the house and do what with the money. To help my husband is a carpenter and i am an accountant so know a fair amount of what to do but not actually qualified in this field. I would really appreciate any help as feel i may be being naive here. Thanks Link to comment Share on other sites More sharing options...
Richlist Posted June 10, 2011 Report Share Posted June 10, 2011 Mortgage £90K with repayments of £239 per month and assuming interest only = an interest rate of 3.18 % Is this a BTL mortgage ? Who is offering such a product ? What is the mortgage arrangement fee ? Link to comment Share on other sites More sharing options...
Sand Posted June 10, 2011 Author Report Share Posted June 10, 2011 Mortgage £90K with repayments of £239 per month and assuming interest only = an interest rate of 3.18 % Is this a BTL mortgage ? Who is offering such a product ? What is the mortgage arrangement fee ? Sorry I should have put £291 (3.89%) arrangement fee on this BTL is £285 which I think brilliant considering everything else out there, plus its free valulation and surveys as considered as a remortgage. Link to comment Share on other sites More sharing options...
Trenners Posted June 10, 2011 Report Share Posted June 10, 2011 Hi, So you are going to earn a rental income of £10,200 per annum against an asset worth £182,000 - which means you have a yield of 5.6%. Not too bad against a bank base rate of 0.5% ...... However ... another way of looking at this is ...... you are personally investing £90,000 and you are borrowing the rest (ie: £92,000) ..... so you actually INVESTMENT is £90,000 against a £10,200 rental yield .... give you a return of 11.33%. Whichever way you look at it ..... and whichever way you calculate it ....... you will struggle to find a 5.6% yield by putting your money in a bank or building society ..... and ... you also get the long term capital growth as well. Seems like a good deal to me ..... PS: The Coventry are offering B2L remortgages at the moment at 3.89% with £250 fees ... 65% LTV. Mark Link to comment Share on other sites More sharing options...
Sand Posted June 10, 2011 Author Report Share Posted June 10, 2011 Thanks Mark, I felt it was a good investment, however someone put the seed of doubt in my mind which started to trouble me. If I sold the house I could see easily the money being spent gradually so thought this was a no brainer. Link to comment Share on other sites More sharing options...
sammye Posted June 14, 2011 Report Share Posted June 14, 2011 Thanks Mark, I felt it was a good investment, however someone put the seed of doubt in my mind which started to trouble me. If I sold the house I could see easily the money being spent gradually so thought this was a no brainer. It makes a good profit definitely. I think it just that buy to let investors generally have a number of properties and perhaps would sell their share take the £90k and invest it in a few BTL properties and try and maximise profits... Link to comment Share on other sites More sharing options...
Mortitia Posted June 14, 2011 Report Share Posted June 14, 2011 If you look at bricks and mortar V stocks and shares the bricks are the winners. Stick with it I say. Stockmarket will be rumbling along the bottom for the next 3-5 years at least and interest rates not likely to improve for savers. What else can you do with money apart from watch it depreciate? Mortitia Link to comment Share on other sites More sharing options...
Melboy Posted June 14, 2011 Report Share Posted June 14, 2011 If you look at bricks and mortar V stocks and shares the bricks are the winners. Stick with it I say. Stockmarket will be rumbling along the bottom for the next 3-5 years at least and interest rates not likely to improve for savers. What else can you do with money apart from watch it depreciate? Mortitia How true! I have been out and bought 2 properties in the past year as I was not prepared to finance the banking system at a miserly 2.8% LESS tax!. Just finishing off a property right now and have had at least 3 investors from the London area looking at it for BTL and also mainly somewhere to put their money rather than banking or stocks and shares and who can blame them really. Mel. Link to comment Share on other sites More sharing options...
Sand Posted June 15, 2011 Author Report Share Posted June 15, 2011 Thank you for all advice, my mind is now set and I am happy to start being a landlord. Link to comment Share on other sites More sharing options...
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