Btl mortgage

[Jaymac]

Hi all,

I am thinking of buying two property's for blt total £160000 do I use my own money or do I try to get an interest only mortgage, I will be looking to rent them out for 550 to 600 per calendar month.

[Richlist]

Don't bother.

£160,000 returning £600 per month = 4.5% gross yield

After expenses you'll be left with less than you can get in the building society.

[Jaymac]

Hi,

Sorry but I did not explain correctly each property would have rental income of £550 to £600 a max total of £1200 per calendar month.

£160000 returning £1200 per month = 9% gross yield.

[Richlist]

There are far to many variables.....your net yield is going to be far less than 9%. In fact gross is not necessarily 9%......@ £550 pcm it could be 8.25%

Its unlikely that any property purchase you make is going to make sense financially.....most newcomers seriously underestimate the running costs, fail to consider money that needs to be set aside and rarely factor in all the elements of the operation.

If you want to provide my details you might get a more detailed answer.

[Mortitia]

Jaymac, I would have a go if you want to experience what being a landlord is all about - some times you just have to do it.

Do all the managing yourself and we will see you back on here when you hit trouble.

[Jaymac]

Hi,

Thanks for all the info but should I use my money or the banks.

[Richlist]

Wouldn't that depend on :

* the terms of the loan ? eg......interest rate, arrangement fees etc.

* wether you are likely to need the money for something else in the future.

* The return your currently getting on the £160K.

* Your tax position.

* etc etc

Its like asking someone how long is a piece of string.