First time Buy to Let buyer looking for advice on the risks?

First time Buy to Let buyer looking for advice on the risks?

10:14 AM, 18th January 2016, About 7 years ago 4

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I am looking for some advice. I’m a 21 year old who is in full time employment earning £21,000pa + bonuses. I am currently saving to invest in a buy to let property, but I really don’t know too much about the risks.risk

I would be looking to start off with a small property, I am considering a 1/2 bedroom flat. I have found a few which are on the market for around £50,000. From what I have been reading up online the rent for such properties would likely be £90-£100 per week and from what I have calculated on mortgage calculators, the monthly mortgage repayments would be around £150-£200 per month, which would result in a £200 pm profit. Is it really that simple? Save up a few thousand pounds for a deposit and then sit back and watch the money roll in? I am really looking to set myself up for my future life and could do with just a few pointers in the right direction.

Thanks for any help in advance.



Neil Patterson

10:32 AM, 18th January 2016, About 7 years ago

Hi Jake,

There is so much more to being a landlord than I think you realise in terms of regulations, cost and responsibilities.

Do you know about the new Summer budget tax regime >>

Extra Stamp Duty >>

Deposit Protection

Deregulation act >>

Health and Safety Requirements

What if a tenant doesn't pay?

The list goes on

Lyndon B

11:58 AM, 18th January 2016, About 7 years ago

Hi Jake,
Firstly, well done for wanting to take the plunge and invest for your future at the right age to be thinking about it. I too was in the same position as you but just a couple of years later at 24/25.
As Neil says there are a lot of regulations and tax implications to adhere to and understand, I say the best way is to start as you mean to go on and research it until you understand the risks fully. This forum has a multitude of information on BTL, legislation and tools to help you with that. As a first time buyer landlord your borrowing options are slightly restricted - I found Natwest to be a savour in this respect so do scan the market and check their eligibility criteria now as we're a few years on. Think carefully about the area you buy in; close enough for maintenance? Any major social issues or crime? A succesful mentor once advised me "bricks and mortar cost the same anywhere, you pay for what you get in location"
Also think about the end goal, that £200 p/m "profit" could be used to roll back into reducing your borrowing during your working years, to pay for the property sooner? Lots of different strategies and options for you to look at, but keep on saving and research it over and over until you understand it to your satisfaction. Even once you've purchased, you'll always need enough money kept back to cover rental voids or repairs too.
If you want to chat more, get in touch by message I'd be happy to help if I can. I'm not a full time landlord like many of the larger more experienced on this forum, just two rental properties currently as a pension plan for the future.
Best wishes anyhow.

Terry Davis

14:19 PM, 1st February 2016, About 7 years ago

If you're buying a Leasehold property then have the lease extended to as long as possible, with the Ground Rent removed, as well as the right to sublet without charge added, at the tiem of purchase.

Try to make the vendor responsible for these costs.

Best of luck

Alison King

17:06 PM, 1st February 2016, About 7 years ago

Flats sometimes have hidden costs such as high ground rents or maintenance charges. Make sure you have all the information up front before you commit.

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