advice needed 2nd property purchase

[kaczarap]

Hi everyone,

advice needed on next steps needed to be successful in properties I'm debating whether to buy a 2nd property which requires work to add tangible value too or is buy to let a better option? My 1st property I've got a residential mortgage I'm full time employed with salary of around £45,000.



My budget to invest is between 30-40k. I have found a couple of flats with a high yield of around 10% purchase price 50k rental income £475 pcm from what I've been reading best bet is to take out an interest only mortgage on this type of property but what happens after that how do you then move onto property 3&4?



The other option buying a house that requires work then flipping after works completed, what type of mortgage would I need for this? Is it true you have to own the property for 6 months before you sell?



Thanks in advance

 

[Longterminvestor]

There is no right or wrong answer with regards to flipping a property or buying another buy to let. Personally at this stage of your property career I would look at another buy to let and then build from there - this will give you regular income. Unless you have particular diy skills when it comes to renovations then that is a whole different ball game.

Many people are afraid of debt but if used correctly it can help you move on to properties 3 and 4 quite quickly without stretching your financial resources. If you would like to PM me I can put you in touch with the mortgage broker we use - they offer specific buy to let mortgages.

 

[realdeals]

Many buy to let landlords will use interest only mortgages with the idea of covering interest costs with rental income and then, hopefully, remortgaging or selling the property (for a profit) when the mortgage comes to an end. You would hope that after 20/25 years the property would have increased in value.

 

[Nicholas Wallwork]

Hi everyone,

advice needed on next steps needed to be successful in properties I'm debating whether to buy a 2nd property which requires work to add tangible value too or is buy to let a better option? My 1st property I've got a residential mortgage I'm full time employed with salary of around £45,000.

My budget to invest is between 30-40k. I have found a couple of flats with a high yield of around 10% purchase price 50k rental income £475 pcm from what I've been reading best bet is to take out an interest only mortgage on this type of property but what happens after that how do you then move onto property 3&4?

The other option buying a house that requires work then flipping after works completed, what type of mortgage would I need for this? Is it true you have to own the property for 6 months before you sell?

Thanks in advance

I personally think doing a renovation is a good idea as you’re effectively adding value and thus adding to your pot of available capital when you sell or refinance... if you want to be a hands off investor then you’ll struggle to buy more as you’ll tie up all your available cash into the first couple of deals.

To progress past that you need to be more hands on and/or raise more equity finance... this can be sought from JVs, private investors or potentially across Funding platforms... all come at different costs...

Before anything obviously get your knowledge and education more advanced. We have lots of free ebooks on the site which will help... check the main menu above!

Also feel free to post questions on here of course!




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[nmb]

Hi @Nicholas Wallwork

Is there a ballpark figure that you use when redeveloping. For example, if you invested £50k in redeveloping a property what kind of uplift would you expect on the property valuation?