Too much equity – best way to increase income

Too much equity – best way to increase income

10:38 AM, 23rd November 2014, About 10 years ago 13

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We (husband and I) currently own two let properties. Too much equity - best way to increase income

One is worth around £170,000 – with no mortgage on it – currently let for £675 per month gross.

The second is worth around £160,000 with a £63,000 interest only mortgage – repayable in about 10 years and lets for £560 per month.

Both sets of tenants have been in place for over ten years.

We also own our own house which is worth approximately £250,000 and we currently owe £55,000 on a capital and repayment mortgage (interest rate 1.25%) with a drawn down facility where we could access a further £55,000.

We also have around £75,000 in savings at various rates from not bad (in an Equity ISA wrap) to rubbish in the Nationwide (2.5% in regular savings) and 3% in Santander 123.

We are looking to increase the value of what we own and provide an increased income.

However, we are retired and need our income guaranteed due to low pensions.

As we are in our 60’s would we be able to get a new buy to let mortgage?

We are thinking about buying a holiday rental property in Dorset – does anyone have any experience of this type of letting?

Two bedroom houses in our home town start from about £160,000 to £170,000 so would require a large injection of cash and a mortgage.

Should we look at properties further afield?

Any advice would be most welcome.

Thanks

Sue Bland


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Comments

Joe Bloggs

18:41 PM, 26th November 2014, About 10 years ago

Reply to the comment left by "Sue Bland" at "26/11/2014 - 17:29":

hi sue,

the lack of an agent is no justification for subsidising the rent. similarly tenants are responsible for internal redecs so again this is not a good reason for low rent.

thirdly whilst its great when tenants do repairs (assuming its done properly), the law says you cannot opt out of your repairing obligations by making the tenants liable.

the new boiler is good but the tenant mainly benefits from this if the old one was still safe/working.

my advice would be before considering expanding, take more business-like control of these rentals.

Piler

20:07 PM, 26th November 2014, About 10 years ago

Reply to the comment left by "Sue Bland" at "24/11/2014 - 19:45":

Me and my wife have done just that, we remortgaged 4 small flats that we have owned between 12 and 8 years and put our savings with it and have bought 6 properties since Jan and hope to get 2 more - once you put your mind to it you can do it - buy one on 70% mortgage and aim to make an offer on another as soon as exchage arranged on first

Sue Bland

17:06 PM, 27th November 2014, About 10 years ago

Reply to the comment left by "Joe Bloggs" at "26/11/2014 - 18:41":

Point taken.
Thank you

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