Questions from a buy to let newbieMake Text Bigger
I’m new here, and new to the letting industry, so first of all hello!
I’m 26 and have a good income from another business that I started a few years ago, but rather than carrying on spending it on expensive cars and other toys I figured it was time to start trying to invest it. The first thing everyone says as soon as they hear you have some money seems to be “get in to property” … so I’ve been looking in to it for the last few weeks.
Now I really don’t want to just jump in to this without doing plenty of research first – just because other people say its a good idea (most of whom haven’t actually done it themselves), doesn’t mean it is a good idea in reality. So along with my own research which I’ll continue to do, I was wondering if anyone here had any tips or suggestions for someone in my position? Anything you would have done differently when you started out? Any way I can use my existing high income to my advantage for letting (other than just saving it up for more deposits on more houses to let out) ?
So far my understanding is that, contrary to what I initially thought, I should go for an interest only mortgage and rather than buying one house for £100K with a £60K deposit, I’d actually be better off buying 2 houses for 100K each with a £30K deposit on each. I know there will always be people that have different strategies but is that a popular opinion? If anyone would strongly advise against that then I’d be keen to hear why. All of the buy to let mortgages I’ve looked at so far have required at least 25% deposit so I don’t think I could go much lower than £30K on a £100K house.
Also a few specific questions:-
- One thing that puts me off letting is unexpected bills for repair work, so I’d love to hear from people who actually let houses and hear how often that kind of thing really happens. I realise it could vary wildly from house to house and tenant to tenant, but just hearing people’s experiences of how often something unexpected eats in to your monthly profit would be useful.
- Anyone recommend (or recommend against) any particular letting agents in the Lincolnshire area?
- I’d really like to be as hands off as possible and go for a fully managed service from a letting agent, which I realise will take away some of my profit, but keen to hear other people’s experiences with such services. Would you recommend for or against this?
- Is it the norm to do this as a sole trader or do most of you form Ltd companies and do everything through that?
I have a few more questions but this is already getting quite long so I’ll shut up now.
Thanks for any advice in advance!
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