11:22 AM, 26th January 2014, About 9 years ago 16
Hello everyone, I need advice as a Buy To Let novice
I am what might be called an accidental landlord. I was living in a flat I had purchased and then I bought another flat in another town as I was due to be moving there with my job. I did not move there in the end and subsequently I let that property out.
The property I was living in I have also let out as I ended up moving somewhere else (again work).
This is all good and well but the problem I have is that the two properties are not making money for the following reasons:
The first one I was a complete novice and let the property to a friend for well below the market rate (this will be sorted later this year when they are due to move and I can adjust the rent). I must add that I am breaking even on this one.
The second property (my old home) is not what I would call a great rental property because I bought it to live in and had no plan to let it. I am just glad that I am not losing money on it and am also breaking even on this one.
I now want to build a portfolio of properties but I need to know what I must do next. I am slowly building up a cash reserve as suggested by Mark Alexander and others.
1. Should I go see an accountant now and set up a business? If so, what type would be best for a landlord and is there anything I should be wary of?
2. Should I try and reduce the mortgage on the second property to get it to the point where it is generating cash flow or just let it keep ticking over? I don’t want to sell it just yet because the value has not gone up yet but it is a new build and there are very big plans for the entire area.
Any advice would be greatly appreciated