Should I buy to let? Moneygrabber89

#1
Hi,



As the title suggests I was wondering if now is a good time to buy to let? I have done a bit research on buy to let mortgages but in general is this a good way to make money or is the risk very high?



I have friends who have done this previously and bought a very cheap house and refurbished it themselves cheaply so therefore have a cheap mortgage on it but charge high monthly payments. . I wouldnÂ’t have this option as IÂ’m not great at handy work.



For example if I bought a new build for £99,000. The house would be in very good condition and covered but warrenty’s. Would this be a good purchase?

#2
http://topdocumentaryfilms.com/how-long-piece-string/



https://www.youtube.com/watch?v=i577LmfHOsk



No one can forecast the future. What is, however, possible, is to run numbers over the short term:would you have to pay the additional 3% stamp duty? Most likely yes
how much can you rent the property at?
what would your LTV be?
have you factored in vacant periods?
have you factored in management fees, maintenance, estate agency fees, etc?
what mortgage rates can you expect? Have you searched online a bit?
what's your marginal tax rate?
what's your investment horizon?


A 5% gross rental yield can easily plummet to 1% net after taking all these costs into account.



You don't even say where you are planning to buy, what you know of the local market, etc.

#3
It would be in the Durham area. The area is up and coming with a secondary school planning on being built.





I am pretty useless when it comes to these things. I was just wanting a general is it usually successful or not.





Judging by your response I would say not.

#4
We cannot answer this for you. You have to do your homework and run some numbers taking into account all the costs I mentioned above. If the numbers don't work, well, of course it's a no. If they seem to work, then you can look into it a bit more: if the property appreciates substantially over time you will make money, but, conversely, if the property depreciates over time you may lose money...

#5



I am pretty useless when it comes to these things. I was just wanting a general is it usually successful or not.
Originally posted by Moneygrabber89




Judging by your admission I would say not also !





Seriously, if your thinking about becoming a BTL Landlord then do as much research as you can.





You need to know how much you want to make out of this each month, after all costs are taken into account, then work out if purchasing a new build for £99,000 is the best way to do it.

#6
So I guess you have researched the new landlord tax changes the new stamp duty charges, the new lending restrictions as well as all the responsibilities of being a landlord?



Have you also factored of buying in a falling market?

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