Questions from a buy to let newbie

by Readers Question

11:07 AM, 8th June 2015
About 5 years ago

Questions from a buy to let newbie

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Questions from a buy to let newbie

I’m new here, and new to the letting industry, so first of all hello! Questions from a buy to let newbie

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!

Chris


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Comments

Carol Thomas

14:20 PM, 8th June 2015
About 5 years ago

Hi Mark
You and I seem to be crossing over! Could be because my comments take three minutes to vet,lol!

Chris Townsend

14:27 PM, 8th June 2015
About 5 years ago

Caz you mentioned about following this group to get a weekly email, but I can't see how I do that? Perhaps I'm being blind...

Carol Thomas

14:35 PM, 8th June 2015
About 5 years ago

Chris
Top right ,orange/blue box Become a Member. It's not blindness, there's just such a lot to take on board,lol

Mark Alexander

14:46 PM, 8th June 2015
About 5 years ago

Reply to the comment left by "CaZ " at "08/06/2015 - 14:35":

As Chris is a new member he should start receiving the Newsletters daily and also the weekly from the day he joined.
.

Mark Alexander

14:48 PM, 8th June 2015
About 5 years ago

PS, I know he must be a member as that is necessary to post comments 🙂
.

Chris Townsend

14:56 PM, 8th June 2015
About 5 years ago

Reply to the comment left by "CaZ " at "08/06/2015 - 14:35":

Ah yes I've already done that - like Mark says I couldn't post a question or comment without doing that 🙂 I haven't received any emails yet but I guess it has only been one or two days, so I'll see if I get the weekly one this week.

Thanks
Chris

Carol Thomas

14:58 PM, 8th June 2015
About 5 years ago

Oops, Blonde Moment,lol

Mark Alexander

14:59 PM, 8th June 2015
About 5 years ago

Reply to the comment left by "Chris Townsend" at "08/06/2015 - 14:56":

Hi Chris

Please check your spam and junk mail folders. If you joined before today you should have today's Property118 Daily Newsletter. You may need to whitelist us if your spam settings are a bit aggressive.
.

Chris Townsend

3:37 AM, 14th June 2015
About 5 years ago

Reply to the comment left by "Mark Alexander" at "08/06/2015 - 14:59":

FYI - I did receive the weekly newsletter, thanks!

Renovate To let

9:02 AM, 14th June 2015
About 5 years ago

Just to add to your research list, make sure you investigate using a SIPP or SASS to use your own pension to own the premises for your business. This is often the biggest win when you own a business, have premises and also take income at the 40/45% tax level.

The SSAS adds the ability to make loans from the pension to the business for expansion etc (with the interest paid back into the fund).

This needs qualified advice.....

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