Recommendations for next BTL investment?

by Readers Question

10:14 AM, 9th November 2014
About 5 years ago

Recommendations for next BTL investment?

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Recommendations for next BTL investment?

I have up to £300K to invest in BTL, and would welcome all suggestions for where the best location and what type of property would be for me to invest. Recommendations for next BTL investment?

Given problems I’ve had (continue to have) with purpose built new blocks, rip-off freeholders and agents, service charges, etc… I would prefer to avoid leasehold and high service charge commitments.

Also, should I use all cash or look to mortgage and buy more.

Regards

Lou Valdini



Comments

Neil Patterson

11:05 AM, 20th November 2014
About 5 years ago

Hi Ramus,

1) This is the mortgage interest rate at which point on an interest only basis your income equals your expenditure

2) 10 year is the maximum term of the Castle trust product and at that point the loan plus share of capital appreciation has to be repaid/refinanced

3) This would mean that although there is no capital growth for Castle Trust to share in they would then apply a minimum interest figure of 2.5% per annum not compounded eg leaving you an additional 25% of the equity loan to repay.

Neil Patterson

11:24 AM, 20th November 2014
About 5 years ago

Reply to the comment left by "Neil Patterson" at "20/11/2014 - 11:05":

On the second scenario spread sheet assuming no capital growth the figures would be:

Net Portfolio rental Profit over 10 years, JV = £483,383 Trad = £298,993

After 10 years and repayment of JV finance:

Equity left in Portfolio, JV = £125,000 Trad = £218,750
LTV of portfolio JV = 90% Trad = 75%

Net (of Mortgage) Total rental income pcm, JV = £4,944 Trad = £3,953
Interest rate break even point JV = 9.77% Trad = 11.73%

Warning this would be bad as you could not refinance 90% LTV and would have to sell property or use liquidity.

Mark Alexander

15:20 PM, 20th November 2014
About 5 years ago

Reply to the comment left by "Neil Patterson" at "20/11/2014 - 11:24":

Brilliant stuff Neil, hopefully this will convince a few more people to pay £200 for your analysis tool so that they can run all the comparisons they want on as many variables they can think of before making a decision on whether Equity Finance is right for them or not.

For anybody interested in purchasing a copy the spreadsheet that Neil has produced, the download form is on the following linked page >>> http://www.property118.com/new-btl-mortgage-finance-product/66267/
.

Neil Patterson

15:23 PM, 20th November 2014
About 5 years ago

Reply to the comment left by "Mark Alexander" at "20/11/2014 - 15:20":

PS it is not just a spread sheet.

You also get referred for fully qualified and regulated professional advice from a broker with access to the pilot product.

Colin Dartnell

0:31 AM, 5th December 2014
About 5 years ago

Reply to the comment left by "Smiles On Sea" at "16/11/2014 - 15:45":

Hi Smiles

This is a bit late but Virgin Money are quite happy with second charges and their rates are amongst the most competitive.

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