Buy to Let Strategy – what to do next!

by Readers Question

10:09 AM, 23rd October 2014
About 6 years ago

Buy to Let Strategy – what to do next!

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Buy to Let Strategy – what to do next!

My wife and I have 3 properties in Malta which we rent out – we’ve recently had a baby, and are not sure what to do next in order to position ourselves best for the future. Buy to Let Strategy - what to do next

At the moment, we live in the UK, but may move to Malta at some point (say within the next 3 years) – I am fortunate to earn a good wage here that allows us to save a fair bit of cash, but if we move, I can foresee our total (salaried) income dropping quite a lot, and it would prevent us being able to save enough to make further property purchases funded by our savings.

Here’s the details of the properties we have:

1. Purchased 10 years ago, current value ~€170k, outstanding mortgage: ~€75k. Rental income is ~125% of mortgage.
2. Purchased 8 years ago, current value ~€200k, outstanding mortagge: ~€100k. Rental income is ~105% of mortgage.
3. Purchased 2 years ago, current value is ~€180k, outstanding mortgage: ~€80k. Rental income is ~150% of mortgage.

All mortgages are capital repayment ones – but (1) and (2) are on offset mortgages.

We also have cash sitting around in various pots, which we have been waiting to use, perhaps for a family home … but not
sure where that will be, so it’s kind of languishing at the moment – we have about £100k in cash, and I also have ~£75k in an ISA (which I view as my pension pot really).

The properties abroad all rent well, with very little in the way of void periods. However, capital growth is probably less than in the UK, and rental prices probably also increase less over time than here. That said, fees are less, and we have family to take care of them for us.

I suppose I have three main things I’d like to get some input on:

– Should we continue with our current strategy, which is to put down a fairly large deposit we have saved, and perhaps buy one or two more in the next year or two? Or perhaps release some equity via remortgaging?

– Should we look to purchase in the UK, to diversify?

– Should we look to try and increase the overall income from our properties in order to put more money in our pockets now, rather than just looking to cover the mortgages and waiting until they are paid off before getting the benefit of the rental income.

Sorry for the long post!

Any opinions are most welcome!!


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Mark Alexander

10:13 AM, 23rd October 2014
About 6 years ago

Hi Alex

If I were in your shoes I'd probably to nothing.

Your liquidity ratio's look good and, to be fair, changing anything isn't likely to produce significantly more income in three years time when your personal earning capacity is likely to fall and interest rates may be rising. Property Investment works best over the longer term. That's why, when I retired from 9 to 5 in 2009 I stopped investing and started living off the investments I have made in the preceding 20 years.

Cash is King!

How old are you?

Alastair B

11:04 AM, 23rd October 2014
About 6 years ago

Hi Mark,

Thanks for your comments. In answer to your question, I'm 35 years old.

I also didn't mention that there is the flat we live in at the moment .. which has about 300k of equity in it, and about 180k remaining on the mortgage.

My feeling is that we would probably like to add another property to our list, we have more cash sitting around not doing much than we have had in the past, but we don't want to be rash and over stretch ourselves.



Mark Alexander

12:22 PM, 23rd October 2014
About 6 years ago

Reply to the comment left by "Alex B" at "23/10/2014 - 11:04":

I see, and those additional facts does change things somewhat.

Please see >>>

Alastair B

15:29 PM, 23rd October 2014
About 6 years ago

Reply to the comment left by "Mark Alexander" at "23/10/2014 - 12:22":

Thanks for the link Mark ... at this point, some proper help would probably be a big help in planning for the future ... we could just muddle along doing what we're doing, but I dare say there is a better way for us to proceed - going to do a bit more reading and will take it from there!

Mark Alexander

19:21 PM, 23rd October 2014
About 6 years ago

Reply to the comment left by "Alex B" at "23/10/2014 - 15:29":

I look forward to hearing from you 🙂

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