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  • Buy-to-Let

    Hello - ideas for getting started with £50K?

    > The £6K refurb is indeed a cosmetic upgrade (new kitchen, new bathroom, new floors, new boiler etc.)

    £6k seems very tight for all that even if the cost of labour was zero. Don't forget you'll have to decorate as well, it all adds up.

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    Lenders are not keen on BTL products being used for refurbishment, plus you have omitted costs of taking out two mortgages (arrangement fees) and the associated broker fees.

    Lender A won't be too happy about you re-mortgaging away after a short period, and Lender B will probably value the property close to what you purchased it for, unless you can evidence that you have added significant value.

    The best way would be to buy for cash and then take out a BTL mortgage, or buy with a BTL mortgage and then ask the incumbent lender for what is known as a "further advance".

    Either way, its important to understand that, just because you purchased at a discount and spent £6K, it is not guaranteed that you will be able to get a new higher valuation - especially one sufficient to re-cycle your cash.

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    The advice above is great.

    I just popped on to say welcome, I also grew up in Essex. It will be good to have you back Smile
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    Financial Consultant working with Property Tribes Financial Services.

    BTL Specialists.

    Always cover your debts, don't leave them for your loved ones to pick up. Ask me how - austyn@ptfs.co.uk     07500 871209

    Awesome, I have just got back from a meeting at Colchester United football ground!

    Email me when you have got back to the UK and I'll see if I can help you out, I'm sure we can find a good arrangement.  I'll even treat you to a coffee/beverage Wink

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    Financial Consultant working with Property Tribes Financial Services.

    BTL Specialists.

    Always cover your debts, don't leave them for your loved ones to pick up. Ask me how - austyn@ptfs.co.uk     07500 871209

    My advice in your situation is to buy the biggest house you can afford with a personal mortgage and live in it yourself, and rent out rooms to lodgers.

    That way you will get a cheaper mortgage, a home that you can keep an eye on, fewer rules and regulations, greater control over your tenants and no tax to pay on the first £7,500 per annum. 

    Then after a few years you can remortgage to release equity or use the rent or other money saved and you will be an experienced landlord with your own home. Lenders like those.

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    A freind of mine has just done this in Newcastle and Guess what from 6 April 2020 he will need a Full Licence from the council to have more than two lodgers

    Fire doors wired in smoke detectors ect ect  even a CRB check to rent his on rooms in his own house

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Yes, more than two lodgers makes it an HMO,  unless the third one is let part time such as weekdays only.  So yes, fire alarms and safety doors need to go in but these are not difficult or prohibitively expensive and the OP is looking to build up experience. It's an easy way to start. Licencing and associated additional requirements depend on the council. 
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