Looking at becoming a Landlord after successful business helped purchase main residence

Looking at becoming a Landlord after successful business helped purchase main residence

16:25 PM, 28th October 2014, About 10 years ago 19

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First of all I’m called Max and I have just become a member after reading a lot of the great advice that is available on this page. I am 27 years old and I bought my first property 3 years ago off the back end of a 3 year experience in setting up my first successful business in buying gold after having finished my business degree.

To cut a long story short I bought a ‘Home’ for me and my partner at the time and bought all the material stuff to make it comfy and full of all the gadgets a young man would aspire to have in his home. However the business came to an end as a response to the market, I am no longer with my partner, and I am working a job in insurance to pay my mortgage and everything has got a little mundane.

However my property is now worth around £210k and i owe £125k and I have 5k in the bank. So if I sold up, got rid of some of the luxuries I acquired whilst the going was slightly better I could be sitting on roughly 90k give or take. However, I realise I may have an early payment fee to pay if I cancel my current mortgage, and I’m not sure if I would benefit for waiting for the fixed term to lapse!?

Also I live in Bristol now but I am originally from the North, rental returns seam better in the north marginally, however property prices and rental demand seems much stronger down here, so do I favour a very strong rental market where I can pick and choose my tenants thus making life (hopefully) easier, or do I favour being in a cheaper market where I can build my portfolio faster but potentially not gain as much in property inflation in the long term.

I would like to work part time and ease my way into a full term career as a landlord and build a portfolio over the years, and I am prepared to live well below my means for a few years if it helps me get to where I need to be in the future.

I like to be my own boss and you don’t ever really earn money working for anybody else unless it involves selling your soul, so I would just like to get some advice and direction to give me the faith of developing the start of a strategy that is as close to fail safe as possible.

I am considering joining some Landlord clubs and speak to some of those old G&T drinkers and see how well my landlord osmosis skills are working, but I think at this point I am possibly the most Niave person in this situation and I figured boring you all with this post would be a great way to get the ball rolling!

Thanks for your time in reading this, any response would be greatly appreciated!

MaxGold


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Comments

Emma Arberry

9:37 AM, 29th October 2014, About 10 years ago

Hi Maxwell, I would be keen to hear how you get on with your venture. Me and my Hubby are planning to buy our first investment property too. We haven't got anywhere near the equity you have got though. Like the rest of you....it sounds like a few years without holidays is on the cards. I don't think the kids will be too happy about that - 'The Sun' holiday deals it is then 🙂 Good luck with it and keep me posted.

Maxwell Day

11:34 AM, 29th October 2014, About 10 years ago

Looks like I'll be knocking the annual snowboarding holidays and festivals on the head for a few years then...(ouch) They say you are only as old as the woman that you touch, Mick I'm assuming those holidays in Magaluff are keeping you suitably distanced from that G&T crowd! 😉

Let me know how you get on aswel Emma, would be good to share our experiences! My current property is a maisonette, it was originally a traditional 5 bed Victorian build and the flat below is a state so If I can get my hands on that and spend some
money on it I should benefit two fold, it's just wether I can get a BTL on a property in its state, I haven't been inside but I get the impression of a grade A nightmare!

Emma Arberry

12:23 PM, 29th October 2014, About 10 years ago

Sounds like a lot of hard work, but I'm sure it'll be worth it in the end. Like you I am also under the impression that to get a buy-to-let mortgage, the property needs to be in a decent state of repair. Something to check out.

Yea I'll keep you posted. We are selling our 3 bed semi and downsizing to hopefully buy 2 terraced houses, so same sort of thing as you were looking at doing really. Our house has just gone on the market but things are pretty quiet so far. Just doing our research and setting up spreadsheets at the mo, so that we are ready when the time comes.

Have you been on the NLA website? I have just joined as a free associate member and got access to their free documentation including a tenancy agreement!

Maxwell Day

13:14 PM, 29th October 2014, About 10 years ago

Yea I think owning the whole building will elliminate maintenance issues aswell, ive just been paying the bills for big things and patiently waiting for them to dribble back to me which isn't ideal!

How much equity are you going to have to play with once you sold the house? Are you going to consider putting your existing home on a buy to let and find cheaper accomodation for yourself and the hub if you don't get what you want for your current place?

No I haven't been on there but will definitely check it out, I have discussed with a local estate agent who will take 5% of rent if i source tennants, and 10% if they do it, which includes all referencing, agreements and background checks etc, at the moment I just use a standard lodgers agreement but if i go down that route I will let them take care of that side of things, having rented from them myself when i first moved here I know they are reliable.

Maxwell Day

12:11 PM, 6th November 2014, About 9 years ago

So I have done some reading and I've spoke to some advisors including my own lender and finding I'm hitting a brick wall! Santander wouldn't offer me an additional mortgage which is understandable as I am now earning less than I was when I got the first mortgage, when I asked about releasing equity I just got shutdown and was told the only way would be to sell the property, and apparently they don't do BTL mortgages they would only give consent to rent at an annual fee. Can't decide if I was just speaking to an absolute moron or if my ambition to acquire a second property is just unreasonable!? Hmm.....

Mark Alexander - Founder of Property118

12:19 PM, 6th November 2014, About 9 years ago

Reply to the comment left by "Maxwell Day" at "06/11/2014 - 12:11":

You've been talking to the wong people, try this guy >>> http://www.property118.com/member/?id=314
.

Maxwell Day

12:33 PM, 6th November 2014, About 9 years ago

Reply to the comment left by "Mark Alexander" at "06/11/2014 - 12:19":

Just dropped him a line, thank you Mark 🙂

Emma Arberry

7:27 AM, 8th November 2014, About 9 years ago

We are hoping to have about £24000 but it all depends how much we get for it. Apparently Haart in our area are notoriously known for over valuing. I know that doesn't sound a lot of money but it should give us enough to get a terrace to live in for about £85-90k plus a rental for about £65-70k. We are also saving too to cover all the fees etc. We couldn't afford to let out our current home because we need to release the equity.

Maxwell Day

12:36 PM, 8th November 2014, About 9 years ago

I'm finding myself in a similar position, because my annual income is now so low since becoming employed im finding ways of refinancing and releasing equity very difficult to arrange, once my 5 year fixed rate has finsished in two years time I may have to sell up to get my hands on the cash. I'm going to keep enquiring as there must be an option as I now own over 40% of a 215k property, I guess in the meantime i will just keep saving. What route are you going to go down with mortgaging both properties, both on high LTV BTL? Good luck with the sale of your place! 🙂

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