bianca w

Hi there! + "Interesting" questiom

6 posts in this topic

Hi everyone - I'm Bianca from London. To be honest I haven't really done anything yet in the way of investing, just getting life back on track after having a little cutie (first and last)!

 

But I've always wanted to own a portfolio, and have just about enough for a deposit on a very small property, somewhere more North, like Leeds or Liverpool. 

 

So now the nerves come in: I guess reading and thinking and planning don't really prepare you for this! My aim in joining is to get some of the more practical advice and skills, so that hopefully I can be of some use to a future me! 

 

Anyone who has experience of the Leeds or Liverpool markets, I would love a chat as well. 

 

A slightly more specific question, if anyone has any experience they can share... what is it like investing with family? My sister-in-law and her husband have moved to Leeds and I was thinking it might serve both our purposes if we (hubby and I) bought the house for them to live in and potentially tenant one room. That way they could save up for a deposit on their own place, and we would have them basically pay the mortgage leaving us cash-neutral until they move out or get a tenant. 

 

I was thinking that we could get an ordinary first time buyer mortgage because we haven't owned any property before, so could take advantage of attractive rates and higher LTVs. Then hubby and I keep it flexible by either making overpayments with our own cash, to be used to remortgage and get a second property in a year or two; or simply saving the cash for another down payment.

 

The key questions I'm considering are:

 

1. Is it likely that we could get a normal mortgage if we're so far away from the house location? Do lenders look at that when lending? 

 

To put it another way: even though it's family, will lenders still see this as buy to let?

 

2. Investing with family: clearly were not aiming to make money from family, so it is not going to be a money spinner. Has anyone had experience (good or bad) where the help of family was needed to invest? 

 

3. Is now a good time to be investing up North? Should we wait and see what happens with Brexit? 

 

Any other help or advice would be much appreciated: is there anything else I should consider?

 

Thanks very much in advance! Looking forward to getting stuck into the community!

 

B x

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7 hours ago, bianca w said:

Hi everyone - I'm Bianca from London. To be honest I haven't really done anything yet in the way of investing, just getting life back on track after having a little cutie (first and last)!

 

But I've always wanted to own a portfolio, and have just about enough for a deposit on a very small property, somewhere more North, like Leeds or Liverpool. 

 

So now the nerves come in: I guess reading and thinking and planning don't really prepare you for this! My aim in joining is to get some of the more practical advice and skills, so that hopefully I can be of some use to a future me! 

 

Anyone who has experience of the Leeds or Liverpool markets, I would love a chat as well. 

 

A slightly more specific question, if anyone has any experience they can share... what is it like investing with family? My sister-in-law and her husband have moved to Leeds and I was thinking it might serve both our purposes if we (hubby and I) bought the house for them to live in and potentially tenant one room. That way they could save up for a deposit on their own place, and we would have them basically pay the mortgage leaving us cash-neutral until they move out or get a tenant. 

 

I was thinking that we could get an ordinary first time buyer mortgage because we haven't owned any property before, so could take advantage of attractive rates and higher LTVs. Then hubby and I keep it flexible by either making overpayments with our own cash, to be used to remortgage and get a second property in a year or two; or simply saving the cash for another down payment.

 

The key questions I'm considering are:

 

1. Is it likely that we could get a normal mortgage if we're so far away from the house location? Do lenders look at that when lending? 

 

To put it another way: even though it's family, will lenders still see this as buy to let?

 

2. Investing with family: clearly were not aiming to make money from family, so it is not going to be a money spinner. Has anyone had experience (good or bad) where the help of family was needed to invest? 

 

3. Is now a good time to be investing up North? Should we wait and see what happens with Brexit? 

 

Any other help or advice would be much appreciated: is there anything else I should consider?

 

Thanks very much in advance! Looking forward to getting stuck into the community!

 

B x

Hi Bianca, welcome to the forum and some very interesting questions that I know our community will delve into further. 

 

Congratulations on your new arrival, and good luck with your investment journey! 

 

@rob bence May have something to add with regard to question three! 

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Hi Bianca,

 

Welcome to the forum!

 

Thanks for laying out your questions so clearly - makes it a lot easier to answer.

 

Q 1 - You would struggle to get a normal mortgage being so far away from the property; however, it sounds as though you don't intend on living in the property, so be aware that you actually could be committing mortgage fraud. The advantage of getting a buy to let mortgage is that it will be interest only, so your repayments will be lower - best of all, you won't be getting into any trouble with mortgage companies.

 

Q 2 - I've not invested with family members other than my wife, and I think the subject could warrant a podcast episode in its own right! However, my advice would be to make sure you're all very clear from the start about your goals and expectations. It's better to have the more difficult conversations before money has been invested!

 

Q 3 - Rob and I are big fans of the north - that's where we both currently invest. We have talked about the north loads of times on the podcast - I would recommend listening to Where To Invest In 2017. Also have a listen to our podcasts on the 18 year property cycle:

 

The 18 Year Property Cycle

Where Are We In The 18 Year Property Cycle?

 

Good luck with your journey!


Rob

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Hi Bianca,

 

 In my limited experience mortgage companies wont allow you to rent to family. I looked into this a few years ago as my sister in law and other half are renters so we thought we could buy a place for them to rent off us but it was not possible. (limited research in our early years)

 

1. With a personal mortgage questions are certainly asked if you are buying away from your home address as they want to see proof of continued income. We moved from Bedfordshire to Devon and had to get my boss to confirm that I was still going to keep my job even though I was moving away. I've not tried to get buy to let finance for remote properties yet but imagine it is much more straight forward.

 

2. Investing with family very much depends on the individuals involved, just make sure they have a 'business head' on them. I have experience with both sides of my family and one is a complete silent partner who trusts us to develop our portfolio and repay them if they need it and the other wants their money back before we buy our next property.

 

3. I believe it is always a good time to invest. If you wait for Brexit you will then find yourself waiting for the next concern, then the next..... If you do your research you will avoid big upsets. 

 

Good luck

 

Andy P

 

 

 

 

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Hi @rob bence and @andy plumb  - thanks a lot for considering my questions!

 

And huge thanks for pointing out the potential for fraud! I've never owned a home before so had no idea that you couldn't just get a normal mortgage for a place for a family member, with the assumption that you could stay there too, but without that being your primary residence! 

 

So I went and took a look at the eligibility criteria for BTL, and we won't be eligible for the majority of BTL mortgages, as at least one buyer needs to have owned their own home for a minimum of 6 months, it seems. We're both first time buyers.

 

But then I came across the relatively new concept of a "consumer buy to let" mortgage, which is aimed at the "accidental landlord", which at first seemed like it might suit us, but then again because it's so new, many banks don't seem to offer it (i think only 18 lenders in the country do). And those that do only seem to offer remortgages or stick to the same lending criteria as BTL or stricter. Nothing seems to be standard, even the definition of a consumer buy to let or the range of circumstances under which you can get one.

 

Question for Rob: have you covered these consumer BTL mortgages in a podcast before? I haven't had a chance to check them all... if not, they might be an interesting topic.

 

But indeed: it seems like our plans for investing up North are scuppered for now, and we may just have to continue to save up for a property in London (good luck to us on that...).

 

... unless anyone here has some creative ideas for how to get around this?

 

Or maybe my midnight Googlings are just not thorough enough. I will dig a bit deeper and share any insights: there must be some way!

 

Thanks everyone in advance,

 

B

 

P.S. On the subject of investing with family: I think it's going to be extra tricky for me because they're in-laws as well! But from an idealistic economic history/philosophical standpoint, they should be the first people you can turn to, to build together with. The reason why we have banks and other market infrastructure is because people can't tap into family and social networks for support and funding (e.g. nurseries instead of grandparents, etc). 

 

But being practical, is true that it's often wiser not to complicate matters by mixing family with business. Some families seem to have that cohesion and others don't. 

 

... But I guess the point is moot unless I can figure out how to make the numbers/eligibility criteria work on a property up North!

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