Buy to let property portfolio building – Readers Advice Request

by Readers Question

6 years ago

Buy to let property portfolio building – Readers Advice Request

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Buy to let property portfolio building – Readers Advice Request

I received the email below from one of my readers yesterday morning requesting advice on buy to let property portfolio building. I’m happy to share my thoughts and will do so in due course in the comment section below this article. However, I thought my reader may appreciate a variety of opinions so I emailed him back and offered to publish his email as an article so that other people could also comment. He agreed but wanted to remain anonymous which is obviously fair enough.

This is the email received:-

Morning Mark

A quick background to my property development : I am based in (location removed but a UK City) and am 36 yrs of age… I have been lucky that my father gave me a house that he has  owned for years, which had no mortgage on it so I borrowed 75k against it about 50% LTV and used this money to put I deposit on a buy to let which I purchased back in 2009.

Sine then I have built 2 flats in 2011 which cost me about 150k to build (money came from savings and going back to my mortgage company and getting a further advance on the original mortgage I had).

These flats were therefore mortgage free and were given a total value of around 270k.  I have borrowed around 175K against them around 65% LTV, and have used this money as deposits on 3 more buy to let properties.

My total portfolio to date is 2 flats and 5 houses which are now all mortgaged at around 70% LTV bringing in a net annual income of around £35,000 once mortgages and expenses are paid.

As you can see I am now stuck as to getting more money against my properties to use as a deposit (a familiar scenario no doubt), so was just going to wait until my mortgages mature and remortgage them to take more money out – providing property prices increase! 

I now have 7 mortages (1 on each property) all maturing around the year 2014.

In your opinion, if you were in my position, is my best strategy to carry on borrowing as much as I can to develop my portfolio?  (obviously as long as I’ve got enough cash as back up to cover expenses voids etc). 

Also what market conditions, etc should I be wary of when using this strategy to develop my portfolio?

Really appreciate your thoughts on this Mark.

Kind Regards


What buy to let property portfolio building advice would you offer to Laurence?


6 years ago

With interest rates likely to fall again in the next month or so I would wait until that happens but I would hold fire for another few months and see how far house prices fall, they are falling and will do so for a while you maybe able to pick up some bargains soon. I would be careful about pushing your mortgages too much.

Mark Alexander

6 years ago

Very interest points of view Chris. Another way of looking at it is that if property values might fall and there is a desire to expand the portfolio if/when they do then now might be a VERY GOOD time to refinance and get as much money out as possible, or ideed to sell some properties. Once the properties have fallen in value it will be too late to release additional capital. The finance can always be repaid if not used.

In Laurence's situation though I may well be tempted to sit back, relax and enjoy the ride. £35k net income is not to be sneezed at.

Another way to expand the portfolio may be to do some buy/refurb/sell deals. Capital will be required to do this and the options to be explored are obviously refinance or sale of all or part of the portfolio.

My recommended reading for Laurence is this article >>>

6 years ago

Thanks for this Mark, i did leave a previous comment which i cant see on here and my question was, where do people see house prices going in the next 5 to 10yrs ? as obviously this is going to have a big factor when trying to refinance and get more money out of the property. here in the south west there seems to be flats going up everywhere but not so many houses being built.

Mark Alexander

6 years ago

Interesting question Laurence, it's a bit like asking the BBC to predict the weather 5 and 10 years from today. They struggle to get it right two days in advance a lot of the time LOL. Plan for the worst and hope for the best is the best advice I can offer. To quote one of my favourite saying which I stole from Kung Fu Panda and slightly modified, "yesterday is history, tomorrow is a mystery, today is a gift, that's why it's called the PRESENT."

6 years ago

interest rates likely to fall? BOE is already at 0.5%? Do you mean mortgage deals are likely to be better? WHat makes you think this?

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