Buying a second property to lease out.

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    Buying a second property to lease out.

    Thank you for reading this.

    My goal is to purchase another property to let.

    Current situation is I have one property already let out in Scotland, and this has been managed by a letting agency for 12 years, on a capital and repayment mortgage, and will finish in 3 years( approx). I am not a UK resident, so I currently do pay any tax.but I am a UK national.

    The current value is approximately 120,000 pounds, with approximately 35,000 left on the mortgage
    I have approximately 60,000 pounds in cash funds.




    My goal is to purchase another property, to let.
    This is long term 15 years
    To pay this off in 10 years.
    Either income for retirement, pass these onto the kids.( I am considering purchasing the house as part of a trust too)

    I am looking to buy a second property as a buy to let. Sadly, it’ll come with a higher interest rate, plus the buy to rent fee.

    I’d like to once again, buy this on a capital and repayment mortgage.

    a) to prevent short fall on any final mortgage repayments )

    b) with a deposit and reduction in the loan, this will reduce any risk if there is any price correction.

    I wish to put a 25 percent deposit.25,000,-30,000 pounds.

    The rent from this property will be used to reduce the capital and interest and he rent from the 1st property, would be used to repay the second mortgage with a goal of repaying the loan in approximately 10 years.

    With the other 30,000 pounds I would like to keep this to ensure that there is financial buffer, incase there are any problems with the property, or sudden mortgage rate increases, or times when there is no tenant.

    However if things continued ok, I would like to buy a 3rd property, on an interest only mortgage with the rental income being used to either supplement income or pay off the second home, but this would depend on how fast I could reduce the debt on the second property.


    On top of that, I’m considering letting the property out, as I do now, withy current letting agency or to a housing agency, which would guarantee a monthly income, although it might be slightly less rent, but I wouldn’t have to pay for the letting agency.


    So I am not sure how to proceed and any advice from the more experienced would be welcome.




    #2
    If I was you my first port of call would be a good mortgage broker who will let you know the criteria in terms of expected rent etc. to allow you to purchase a suitable property.

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      #3
      Unless Scotland is different, the tenant or agent should be taking off UK tax. Double taxation agreements may mean that you only pay the tax in one of the UK and your country of domicile.

      https://www.gov.uk/tax-uk-income-live-abroad/rent

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