Is 100% buy to let leverage a good idea or not?
7:35 AM, 10th September 2013, 13 years ago
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I’m looking to do my first time buy to let by releasing c. £25,000 -£37,000 equity from my main residence and the remaining £75,000 to £113,000 on a buy-to-let mortgage to buy a 2 bed property costing c. £120,000 to £150,000.
Mark suggests always having 20% cash in the bank but that would mean delaying my purchase by 2 years.
Looking for advice on whether to get going now or keep saving?
Regards
Clod Hopper
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Advice requested by readers, Buy to let, discussion, Forum, gearing, Landlords, Liquidity, mortgage, Property, questions, readers question, Readers Questions, Strategy, tenants
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Leaseholder or Freeholder who is responsible?
Member Since January 2011 - Comments: 12207 - Articles: 1403
6:25 PM, 10th September 2013, About 13 years ago
Reply to the comment left by “ ” at “10/09/2013 – 18:18“:
Buy to let is just like any other business Mark, it has it’s risks and there will be winners and losers. I’m sorry to hear that you were not one of the winners and thank you for having the courage to post your story to highlight the risks and need to have money on one side as I previously referred to.
For landlords with a liquidity fund of 20% of debt the issues you faced would have been a major setback as opposed to financial oblivion.
In 25 years of letting and over 1,000 tenant changeover my family have had less than a handful of these issues but they can and do happen. The risks can of course be reduced by knowing what you are doing and having a good strategy but the risks can never be completed negated no matter how good you are.
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