I am seeking some advice from the vast pool of experience on this forum please. We have seen an opportunity to buy a shop with flat above in a nice town and having crunched some numbers, there appears to be a surplus of £900/month (we would extend the mortgage on our house to raise a good deposit, borrow the rest of the purchase on a BTL and with interest rates where they are currently, it would not increase our domestic mortgage repayments) from the rental income (shop already let and the figures for the flat are based on previously achieved market figures). This surplus could presumably be used to build up a buffer to mitigate any void periods. All of the financing figures are based on fixing for 5 years to give us stability - we have one full time salary coming in and I run a small business with a modest income.
The question is - am I missing any major factor that makes this not as attractive a proposition as it first seems? It is a nice town with reasonable local trade. The building is very old which could throw up some repair issues I guess but it looks fairly well looked after. The company currently letting the shop could develop financial problems and disappear but I would want to find out more about the lease that they have and what their commitments are (although if they went bust I guess generally that any debt would be a loss). There is another larger vacant shop just down the road that has recently been put on the market but generally the town seems good without too many vacant shopfronts - it also has a good tourist season. Maybe mortgage companies don't like do BTL on a mixed type of property?
Any thoughts would be much appreciated.
The question is - am I missing any major factor that makes this not as attractive a proposition as it first seems? It is a nice town with reasonable local trade. The building is very old which could throw up some repair issues I guess but it looks fairly well looked after. The company currently letting the shop could develop financial problems and disappear but I would want to find out more about the lease that they have and what their commitments are (although if they went bust I guess generally that any debt would be a loss). There is another larger vacant shop just down the road that has recently been put on the market but generally the town seems good without too many vacant shopfronts - it also has a good tourist season. Maybe mortgage companies don't like do BTL on a mixed type of property?
Any thoughts would be much appreciated.
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