I want to invest in buy to let properties so that these become my income stream when I retire. However, in order to own the properties outright at that time, the mortgage payments I need to make now will not be covered by rent - so I can't get a btl mortgage against them. Payments for an interest-only mortgage will low enough to be covered by rent, but then I will still have to deal with the principle loan amount, and so never get an income stream. Is there a solution ? Is it a sound strategy to buy to let now in order to sell in a few years time, and the surplus becomes the income ?
2006-11-20 01:30:03 · 5 answers · asked by Gidob 1 in Business & Finance ➔ Renting & Real Estate
Buying properties to rent them out for a profit is a really bad idea. You have to factor in costs like loan interest, maintenance costs, conservancy charges, utility bills, licenses etc. There are so many costs to upkeep a property even if you can pay for the house in cash straight away. And what's more, you have to consider things like, what if nobody rents my property? What if property prices go down? Am I prepared to sit on hundreds of thousands that I can't liqidate in emergencies?
To learn the best strategy for retirement income, there is no other way than to sit down with a Financial Planner, who will work out your budget, financial situation, years to retirement and plan out the best strategies using available tools.
2006-11-20 01:37:34 · answer #1 · answered by floozy_niki 6 · 0⤊ 1⤋
If you have to borrow money to buy the rentals..That sounds about right..That is about what I make on mine..I have three rentals right now..i make about $400.00 per month (right now)..I put them on 15 year notes (profit would be higher had I gotten longer notes) so.....The idea is that when I turn 50 instead of having $400.00 a month coming in I will have $1400.00...And if rent keeps going up and up and up the way it has been that number should be even higher..My goal has been to buy one home a year..Well on track..Good Luck..
You might also talk to your accountant about doing "Owner carries" or "Rent to own" on your properties..I have a few of those too..The problem is IF they actually pay them off..lol..I have them put at least 10%-20% down (which I use to buy another home) and they will usually pay a bit more because they are "buying it" and then I sit back and hope they don't make the payments!..Not very nice but it can work to your advantage..If they don't pay you evict them and do it all over again with the 10-20% down from another.....And so on...
2006-11-20 01:45:55 · answer #2 · answered by Anonymous · 0⤊ 0⤋
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2016-02-16 13:53:45 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Buy a run down property
know the area well
buy in an area expected to improve
Buy a cheap house perfect for young couples/proffesionals
find out if anything is planned in the area good or bad
make sure rental income is greater than 7% of the value of the house.
save 10% of rental income for maintainance payments
rent your property for free on sites like
http://www.livesimply.co.uk
2006-11-21 09:33:40 · answer #4 · answered by The_sky_is_blue 2 · 0⤊ 0⤋
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2016-11-25 21:06:05 · answer #5 · answered by ? 4 · 0⤊ 0⤋