Hi, was thinking of buying a few units in central london, Probably west london w3,w2 or e2,e3. Anyone knows, of any good property dudes. A few questions I have? If i put around 20% dp for each unit. Would the rental I get be able to service the loan? Any property experts here?
Its quite likely that your rental income wont cover your loan, if you buy at current marketed prices in those postcodes. My current flat, rental is half the price of servicing a 20% down loan. As for capital growth, well the reverse is happening in many parts of london right now.
Hi, just wondering where your flat is located? I should be up in London scouting for some homes in late october. Probably want to buy a few flats for investment. The most, I guess I can put DP would be ard 40%. Rental would have to pay for the rest? Well, I guess its gonna be tough, unless property market crashes, which I think would be unlikely. Any idea on home interest rates going down or up? Any speculates here?
i'm interested in buy to let flat, central london or not? what is the best place for this tipe of business?
IMO, London is not the place to be buying right now, especially in the buy to let market. There's a lot of poeple jumped on the band wagon of late and streched themsleves hoping for capital growth. Unless you're going to rise above the usual 2-3 bed flats, I think I'd be looking somewhere other than the ovearheated London markets. All my opinion and I am in no way experienced enough to give advice on house purchases.
I own a 1 bedroom flat in NW1 (Regents Park) which I let out. It is 10 mins walk to the West End and also Camden. Perfect location in Albany Street which is a central and also fairly quiet. I bought it 12 years ago and it has never been empty for more than a week. The demand in this area is astronomical. I only let it out to professional business people/companies with good references. I'm lucky enough not to have a mortgage on it and the rental income is £1400/month (before tax deductions). Beats any pension plan hands downs.
Great thing to do some time ago; may not be best financial practice now necessarily. For many who timed it right a great way ahead for income, but at present ama not sure about this (Thumbs up to person who posted who gets £1400 per month - bet they bought at low market & did not require to borrow much). Foxtons are mad on this & best to contact for rental prices & if can really make a profit etc against the cost of borrowing. Lots of buy to let mortgages too. As per all property, location, location, location - Areas - interesting - Chiswick - trendy & expensive to buy, Bow less trendy will be cheaper but for the area bound to easily rent out. I worked briefly for a company this year who used rental property income for gearing for investments (eek ). I was not comfortable with the ethos of the company & the stability of this as a strategy so left & back somewhere with a more stable ethos & strategy for monies. As per all these financial things - these posts/threads not really appropriate & always lots of number crushing has to be done to see if would work for you etc etc. Can your financial circumstances really mean this work for you with property & financial markets as they are at present?? Good luck PM me if you like. Ta Ant
If you can afford to put down large deposits of what you said 40% it can work out. Example: 2 Bedroom Flat 300k 40% Deposit =120k 60% Borrow =180K 180K @ RATES IVE SEEN (.5 BELOW BASE RATE. £1500 ARRANGEMENT FEE- BM SOLUTIONS) will work out about £820 Rental in this area of NW2 (MIDDLE OF WILESDEN GREEN-DOLLISH HILL) VERY GOOD CONDITION £1290 A MONTH £420 A MONTH Gross (But remember capital appriciation) (Wait for it)
Sorry but your example doesn't work because you are failing to take into account the opportunity cost of the £120,000 cash you are putting in Assume the alternative value of your cash is 5% = £500/month So real cost is £1,320/month vs £1,290 rent - and thats before you even start on wear and tear etc
it's getting harder for people to get into this market now,the ones that benefit are the ones that have owned the places for a while now
E.g. in Chelsea area yield is currently in the region of 3-4% vs 6.5% riskless, if you don't like to bet about appreciation it is financially nonsense to buy-to-let. (that's even before service charges etc) So very cheap to rent at the moment.
But Doug, If you read 3604u third post he says he would put down 40%. On buy to let mortgages, mortgage companys tend to work a rule of 125% rent but some crowds like mortgage express are allowing for 110%. You would never get a buy to let mortgage on the figures you worked and with buy to let it tends to be a minimum 20% deposit but BM Solutions have mortgage offersthat you only need to put down15% deposit but the catch is the arrangement fee of 2.5% of the money your borrowing i.e. £250,000 = £6250
Yes thats very true, but if the property is in tip top condition, valued correctly. Stuff doesn't tend to stay sitting for long IMO And then you normally allow 10% of the yearly rental for wear and tear Council Tax (unless it aint included)
Very True, First time buyers unless on a very well paid job will have serious problems and more than likely rent fro most of there lifes. Property is moving so much faster than wages. Imagine wages went up as fast as proeprty some of use lot would be billionaires
I don't know that much about this kind of stuff, but a couple of months ago a friend mentioned that some of the best investment properties in London can be ex-council flats/maisonettes. His reasoning being that they tend to have more bedrooms for the same purchase price therefore you can get a higher rental income for the same capital outlay. He mentioned Clapham and Islington as areas where this would be effective and said that for around £300 - 350K you could get a 3 bed place for this kind of money and still get the same rental per bedroom as say a 2 bed in a private block (his example assumes that you are renting to house sharers and so there may be more management work/periods of one room not being let). As I say, I don't really know that much about it, but thought I'd add it to the discussion so those with more knowledge could comment.
House shareing brings in another law. HMO- Houses of multiple occupation. 5 persons or more. In a 3 bedroom house its quite possible to have 5 persons or more and if you do not register with your local council you can be hit with a 20k fine.