Thursday, June 22, 2017

What Would It Cost To Become a Buy To Let Investor?

It's one thing to recommend potential investments to people looking to get into the buy to let market but what are the real costs of becoming a landlord? 

I spotted a two bed terrace on the market with Moores Estate Agents for £94,950; this property is just around the corner from us on Regent Street.  It is a busy road but this property would let for £525 pcm.

It looks like a great potential return on your investment of 6.6% but what are the actual costs to get into property investment?

I spoke to Tom James at Thomas Nicholas Financial Services in Melton and he had a look at what buy to let mortgages are available this week.

There is a provider currently offering an 80% loan to value buy to let mortgage which would mean a deposit of £19,000.  On a repayment basis over 25 years the cost would be £372 per month.  With an income of £525 pcm this would leave room for covering the cost of repairs and any tax due.  This is at a 3 year fixed rate of 3.29%.

This is a fee free mortgage but there will be stamp duty to pay (£2850) at the point of purchase along with solicitor fees.

You would expect rents to rise over the period of the 25 years so the margins will only improve and you will have the capital value to help with the pension pot at the end of the term.

If you are considering investing in property give me a call to discuss the costs involved and follow for potential investment properties.

Charlotte Baker 01664 569700

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