Should you buy your own home or a buy-to-let first? (Tips for first time buyers and investors 2020)

[@OliviaFenion]

Are you a first time buyer? Which do you plan to do first? If you are already investing, which way round did you do it? Let us know below! :)

[@wilfriedgnahoui8799]

Very informative !

[@rachelclinch385]

It's like you have made a video just for me! Really interesting and helpful.

[@OliviaFenion]

Nah that was just the Thumbnail! 😂 Thanks lovely, glad you found it useful! 😊

[@kathyhu7149]

Hi Olivia : thanks sooo much for weekend training..Already made some arrangements of viewing .. and sorted out mortgage in principle🥳

[@RawrrShadd]

Very insightful, Olivia! 👏 would definitely like to see more on BTL, i.e. location spotting, ROI & yields etc.

[@joewagner393]

Thank you! You are such an inspiration.

[@TheWellnessAbbey]

This is a great video and perspective!!! I've recently filmed a video discussing this topic too, just need to edit and upload it! I've decided getting my investment property second because of where I am in my life but totally understand every point in this video!

[@OliviaFenion]

Thanks lovely! Glad you liked it and good luck with your house purchase! :)

[@jaksmapson7]

Hi Olivia, I am living at home with parents and looking to start building my portfolio. I originally planned to set out and buy a 2 bedroom property, so I could live within it and have a another person living renting from me thus contributing to monthly payments. From watching a few of your videos, I am starting to think that getting a buy to let first (On a interest repayment) and staying at home maybe the better first step.

[@OliviaFenion]

Thanks for your comment! Absolutely that might be the right thing for you - definitely weigh it up. We are pretty much told from the get-go that we should buy a house to live in before thinking about anything else, but if you are happy living with your parents for the time being (and they with you!) then that can in a way be even better - you can have your buy-to-let bringing you an income, and hopefully going up in value, whilst staying at home and saving more. Never underestimate the amount you can save whilst living at home. My 30-year-old sisters still live at home with my Mum and the amount they save each month, even after contributing to food and bills, is staggering! Set a goal to get the deposit together for both properties while you are still living at home and you can't go far wrong! :)

[@samantharidings823]

If you buy BTL first and then second home to live in which is more expensive you have to pay more in stamp duty on that residential home. If you cannot find a suitable residential home first would you suggest getting BTL first anyway? Currently renting and money going down the drain !

[@ak33lsolid91]

I have always been scared to do start my property journey and you have really opened my eyes, thank you very much

[@lochanapeiris2483]

Thanks for the video. Very helpful information. I do not own any property but interest to invest in buy to let property as a first time buyer To buy buy to let property as a first time buyer do I need to own a residential property in uk??

[@kansum3326]

Great video! Answered my question, thank you

[@tajchana1]

Great content, easily explained 😀

[@bondingwithbryan8269]

Just what I was looking for ! Started putting my youtube income into savings for some investments and thinking about buy to lets but not sure if i wanted to live in the uk forever. So was looking at buy to lets without owning my own home . This helped alot ! subscribed and will be looking for more knowledge ! .

[@OliviaFenion]

Oh that's great, I am so pleased you found this useful! I've done another video on Buy-to-let mortgages which you might want to check out if you enjoyed this. I hope it goes well! 😊

[@hassankhan384]

Good information, just teached me from nothing to buy a house, as me and my family live in rental property, so in a way I would love to have buy to let property and earn some sort of income but also will need to buy first time property as well, but its so hard these days one that property prices have sky rocketed over the years, but also the rules have changed so much that some one like me can't even afford a house also too much to handle, it was easier back in the days lucky people who invented back in late 90s and early 2000s when things were much easier then today, I never get buy time I'll be 30 everything will be impossible to do richer will get rich and poorer will get poorer and even pushed into the ground because working at a job isn't really a well earning job and this makes it harder for us people to keep up with our current expenses let alone putting new burdens on head.

[@nb9797]

I've already got right to buy my parents are in and I'm renting elsewhere. So my second property is either my home (for now) or I continue renting and get BTL. Think for me getting a home plus tenant is best then going again straight after with a BTL by taking equity out of my right to buy property (the 5 years are up now). Continuing to rent will put a drag on income anyway if you factor in tax on rent income, and now I've got all this deposit money tied up in a 25 percent BTL mortgage. Residential surely best bet?

[@yinkajpsp]

Great video

[@4RANDOMS]

Hi Olivia, in the situation where someone would purchase there first BTL property through a limited company, if the same person were to then purchase a second property (a home) personally and not through the limited company , would they still hold there first time buyer benefits for the home purchase on the basis that this is the first property they are personally purchasing ?

[@OliviaFenion]

Hi Bradley, great question! And I am happy to say that the answer is yes they would. You can buy as many investment properties as you want via a company and your first time buyer status will be protected for buying your home as an individual, so normal amounts of stamp duty etc would apply to your main home when you bought it in your personal name. 😊

[@lolam3988]

Thank you for the video. If you have a few BTL properties under a SPV (LTD company). Will the amount they borrow you when you get a personal residential mortgage be less as you already have commitments or does it total not matter as they are owned by the company?

[@Mars-op9km]

Inspiring thank you

[@jackieofalltrades2561]

Straight talking, love it!

[@rahulricardo4941]

Thank you you are the best

[@waynethompson4453]

Enjoyed the video thankyou I bought my own house first then a rental 4 months ago. Where abouts in the UK are you?

[@GoldoMania.]

1: wow 2: you beautiful 3: wise 4: informative 5: Thank you

[@shvlogs2261]

Nice house!

[@yukki9593]

Hi Olivia, thanks for the video! I am looking to invest in property, I have a 65k budget for a down payment, and with a 31k annual income, I am wondering if I should buy a Help To Buy property or a BTL property, or a Residential property first, I am currently renting but would like to invest in a property and live in my own house instead, however, I am not 100% sure that I will live in the UK for long term and that I might be quit my job and study a master next year, so I am pretty lost atm, really appreciate if you could give me some advice, thanks!

[@salvatoredefrancesco3139]

Hello. I think i will go for my residential first, let's say a 3 beds, so, i'm gonna rent out the 2 spare rooms who will pay my mortgage and bills too hopefully..... That means i will save my bills and rent expenses, that it cost me around £700/800 monthly, since i don't live with my parents unfortunately.... After that, let's say 6/8 months later, i'll start searching for my BTL..... This is my plan... How that sounds to you????

[@OliviaFenion]

Sounds like a really sensible plan Salvatore! 😊

[@simongurung7715]

Can you rent your residential home without doing nothing or do you have to change it to BLT before your put it out for rent , thanks.

[@OliviaFenion]

Hi Simon, Many thanks for this question - funnily enough it's one that comes up a lot so I made a video answering exactly that just this week! Do have a look as it goes in depth to answer your question! :) Renting Out a House for the First Time (Is renting out my house a good idea?): kzbin.info/www/bejne/oHSne3mhZ6ibpNk Best wishes, Olivia

[@simongurung7715]

@@OliviaFenion amazing , thank you 🙌💪

[@CHeRKeSSS00]

With all due respect to all other content creators that watched, why did I trust you the most after watching this? 🤔

[@stephen7144]

Hi Olivia, How do you make the rental income cover ALL the expenses of BTL including the mortgage interest payment? Mortgage interest Voids Maintenance Management fees Income tax etc Just doesn't add up to generate a monthly income?

[@OliviaFenion]

Hi there, thanks for the question! This is the main difference between professional investors and those just having a "punt" at property. A professional investor will only invest for income if they know they can get the return, so much depends on the area and the type of property you are buying. It may well also depend on how much work you are doing to the property as well. For me, I usually buy, renovate, refinance and rent out, so you need to work all of that out beforehand. How much rent will you get? How much is your letting agent going to cost? I'm personally not bothered about voids because all my properties are in desireable areas and will rent very easily, which was part of my research before I bought them...if I knew there was no demand I wouldn't have bought them in the first place. Management fees tend to go down the more properties you have, as you can negotiate with your agent. You need a good mortgage broker as well to make sure you get good mortgage rates and I would say have a 10% contingency for maintenance (mainly because I've gutted the properties already so in the first few years at least there is minimal maintenance). I'll give you an example of one of mine (a 1-bed house): Rent £695/month Letting agent £75.06/month (9%+VAT) Mortgage £167.15/month 10% maintenence contingency: £69.50/month Total monthly income: £383.29/month before tax Thinking about tax: £695 rent/month x 12 = £8,340 total income/year BUT I can offset my letting fees of £900.72/year and 20% of my mortgage costs* (£167.15 x 12 x 20% = 401.16 plus anything I have spent on maintenance/annual checks etc let's say £69.50/month x 12 = £834) *property is owned as an individual, not via a company (see below) £8,340 less £900.72 less £401.16 less £834 = £6,204.12 total income on which tax is due. Let's say I pay 40% tax, £6,204 x 40% = £2,481.64 tax to pay. Total real income = £383.29/month = £4,599.48/year less £2,481.64 = £2,117.84 Divide that by 12 and it's still £176.48 per month despite everything including tax. And that's just for one property. The more properties you have the easier it gets, and the more you have the less you worry about voids, as if one is empty the others will pay for it until it's let again. If you just have one or two BTLs and one is empty you have more of a problem. This is why it's important to grow your portfolio and get multiple properties. I will say as well that if you own your properties in a company you can offset the whole of the mortgage income. The example I have given here is of one I own as an individual and not through a company (I bought this one in 2005 before companies were as important as they are today, and I've used it as an example as so many people are accidental landlords and own their property as an individual), but if I were starting from scratch today it would be company all the way. I hope that helps! I'm sure you've had a look at some of my other videos but ones you may find useful are: Renting out a house for the first time: kzbin.info/www/bejne/oHSne3mhZ6ibpNk and Buy-to-let mortgages explained: kzbin.info/www/bejne/nIiYnIWcpJZ_qJo plus I have a whole playlist about property and mortgages if you want to check it out: kzbin.info/aero/PLd52iCAXiacBmhp_XiPlgj32sC-DFrGIB Best wishes, Olivia

[@richard4973]

Hi. Would your rates apply to buying land?

[@OliviaFenion]

Hi Richard, no, land (if it's not part of an existing residential property) is classed as "Non-residential and mixed use" which has it's own separate stamp duty rates. For 2021-22 the rates on these would be Up to £150K - 0% £150K-250K - 2% Over £250K - 5% Hope that helps!

[@chrisgkhawkinsart4974]

Great video. My wife and I are looking to move to tenerife would you advise to buy to let in uk? We are first time buyers

[@OliviaFenion]

Thanks for your comment Chris! I can't give *advice* per say, but I would recommend doing your research and due diligence before buying anything here and living abroad - although people do make it work, I find it's always good to be around, and you will *definitely* need a good and trustworthy letting agent... I have seen some serious mick being taken by both letting agents and tenants when they know the owner lives abroad. I say this not to scare you but to make you aware that it's not just about buying somewhere and leaving it - it does require a level of management. If you buy your buy-to-let(s) through a company though, you can protect your first time buyer status so you don't get hit with the extra stamp duty if you do decide to move back and buy a main residence here eventually. I hope that all makes sense. :)

[@chrisgkhawkinsart4974]

@@OliviaFenion thank you so much. Very helpful.

[@kena96]

How much was your down payment for your first BTL?

[@OliviaFenion]

Thanks for your question! :) The purchase price was £96K and I got an 85% loan-to-value mortgage, so deposit was £14,400 plus stamp duty and solictors fees. Nowadays you would be looking at minimum 75% loan to value, so on a purchase of £100,000 it would be deposit of £25K. I hope that helps! :)

[@charifjock8179]

Hi can you help me to understand , why go pravet renting and paying for someone eles property. Is it becouse its not coming out of your pocket paying for your own rent because the other property you get in rental income covers it ( your rent) and still live rent free and still make money on them. Wouldn't it be better to get you're other properties income you make on them to pay your own residential mortgage so live rent free and getting your own home you live in mortgage payed for n still make profits?? Thank you

[@OliviaFenion]

Hi Charif, thanks for this great question! For me, I moved out of my main residence and into rented because at the time we had a lot of mounting debts and I needed to plug the holes. Renting my main residence meant I could get an income from that (in addition to my other rental properties) but it also meant that my cash flow was much more per month, because my mortgage had been about £800/month and the new rental was £650, so not only were we saving £150 by renting, we were also getting extra rental income on our former home. That helped us no end when it came to paying the debt down and was definitely a contributing factor to paying our debt off in 4 years. Fast forward to now, and having sold that one we are living in our own home again and we have enough income on the investment properties to pay our monthly mortgage on a repayment basis, plus all the properties are slowly going up in value. Sometimes it might feel like you have to take a step backwards (which moving back into rented definitely felt like to us!) but actually long term it's the much better thing to do. So it was a step backwards then for a leap forwards now! And that's okay! I hope that makes sense. 😊

[@charifjock8179]

@@OliviaFenion thanks for getting back to me and great info and really great videos am leaning loads of stuff thanks for all your info Olivia

[@BigJoe4189]

I just bought my new house, I am looking to buy another one end of next year. How long will it take for me to buy another, is it depend on to the lender ?

[@OliviaFenion]

Hi Joe, no not at all. If you have the deposit together there's nothing to stop you buying a buy-to-let property straight away. 😊 The lender may want to see 3 years' address history for you, but providing your credit score is good and you have calculated a good rental income and have your deposit you are good to go! Speak to a mortgage broker first though so you have an idea of interest rates. Congratulations on your house purchase! 😊🏠

[@BigJoe4189]

@@OliviaFenion Thanks a lot , trying to get more in the future.

[@nauman121]

Wonderful content so thank you! We only have 20k deposit so cant good house on residential mortgage so we thought to go for BTL as FTB in derby for 100k new flat with 7% yield, is that a good decision?my salary is around 70k so will i easily get BTL as FTB?is there any other expense i should keep in mind when buying 100k flat on leasehold?your advise will be a great help. Thank you. Plz do respond 😊😊

[@nauman121]

And could you suggest good cities for BTL properties between 80 -90k please?liverpool, derby etc. How does that sound?

[@OliviaFenion]

Hi there, thanks for your comment. When you say "new flat", do you mean new build? I personally would never ever buy a new build (or offplan) as an investment, especially "up north" where property prices are generally cheaper. Check out my video on "Should I buy New Build" here: kzbin.info/www/bejne/lYu9nKNqoJqcoa8 Salary is not so much of an issue with buy-to-lets (check out today's video on rental cover calculations, which is much more important for the lender than salary: kzbin.info/www/bejne/rWSwmmtmrKipjKs ) but you might want to get some tax advice on whether it would be better to start your property portfolio in a company, especially if you are a higher rate tax payer. When buying flats also look out for ground rent and maintenance charges which can be quite high depending on what it is an where it is. Also how long is the lease - mortgage lenders don't like it if a lease is 75 years or less. I also highly recommend you get yourself educated properly before going down the property investment route as there is just so much landlords need to know these days. I speak and train at Fielding Financial ( www.fieldingfinancial.com/ ) and highly recommend booking on to a training near you so that you can start your investment journey on the right foot with the big picture. Best wishes, Olivia

[@Faizal_Khan]

Hi, Thank you for this informative video. I live in a housing property so what would the impact be if I start doing BRRR/BTL before buying the property I currently live in? Will I not be able to buy my housing property or would I still have the option to buy it because BRRR/BTL is going to be my investment property.

[@OliviaFenion]

Hi Faizal, thanks for this question. There is not much info out there on this but it is a question I get a lot! I am pretty sure Right to Buy is means tested, so if you have any other investments in the background etc that gets taken into account. Where people have asked me this in the past I normally say secure your Right to Buy first before looking at any further investments, just in case it impacts your Right to Buy.

[@Faizal_Khan]

@@OliviaFenion Thank You for your reply. Can I have two mortgages at the same time? One residential for owning my housing property and one Interest only on the BRRR property?

[@OliviaFenion]

Yes you can have 2 mortgages at the same time (I have way more than that lol!). You can only have one residential mortgage though so all the others would have to be buy-to-let/commercial/holiday etc.

[@Faizal_Khan]

@@OliviaFenion so will I need BTL mortgage for buy, refurb, refinance and sell?

[@OliviaFenion]

@Faizal Khan It depends how you want to do it - some people buy for cash in which case no mortgage required. Others use bridging finance or angel finance (these tend to cost more), others use a buy-to-let mortgage, but if you did that you would need to a. Make sure it has no ERCs if you're going to refinance/sell and b. Bear in mind that most mortgage lenders won't let you refinance a property within 6 months of purchase, regardless of whether you buy it cash or mortgaged. Also, not sure where buy, refurbish refinance and sell has come from - should be refinance OR sell as you're not going to do both! You either refinance & keep it for income OR sell and take the profit. 😊

[@Senile_Yeti]

Did you outright buy your first buy to let or did you take out a mortgage?

[@OliviaFenion]

Hi there, thanks for your question! All my investment properties are mortgaged. It is a. more tax efficient that way and b. If, for example, you have £100k to invest, it is much better to invest in 4 properties with £25k deposit each than buy one outright at £100k. That way you get capital growth from all 4 houses and make more money per month on rental income. Plus, you are not then putting all your eggs in one basket... for example, if your tenant moves out and you only have one property, that is going to cause you a problem until you can find your next tenant. If your tenant moves out and you have 4 properties, no dramas as the other three take care of the mortgage on the 4th until you find a new tenant.

[@Senile_Yeti]

@@OliviaFenion Wow thank you that is very helpful. Lets say i invest in 1 BTL property. Should I aim to pay off the mortgage soon (ten years) or should I take longer to do so (25 years) so the monthly payments will be lower and the rent will cover the costs and possibly make a small profit?

[@OliviaFenion]

Hmm, great question! Hand on heart, I'm not paying off any of my investment mortgages as it's not tax efficient for me to do so. Also, if you are buying a buy-to-let and not making a profit from the get-go, why on earth are you buying it?! I don't mean that in a horrible way - it's a rhetorical question I always ask my students, because the last thing you want is to be burdening yourself with a liability. You always want to be investing for income first and foremost, and capital growth as secondary. I recommend having a watch of this video that I made on buy-to-let mortgages, where I compare and contrast the differences between residential and buy-to-let from a financial perspective. I think it may help. kzbin.info/www/bejne/nIiYnIWcpJZ_qJo Your residential mortgage is the one you want to pay down, not necessarily your investments! :)

[@Nic-tg2ei]

This video makes me both really angry and really excited, don't really know if I can make it through til the end, all I know for certain is that I've totally wasted my life.

[@Nic-tg2ei]

Watched it all. More positive now.

[@OliviaFenion]

Well done Nic for watching it all! Yes sometimes it can be hard thinking that you've missed out on things, but don't worry, there is still plenty of time and remember that life is not a race! I think they say "Comparison is the thief of joy", so try not to think about what you haven't done, and see it as starting where you are now - I am sure there are many things that you have achieved that some of us can only dream of! The way I see it is that maybe then wasn't the right time - the fact that you are seeing this now and realising may mean that now is your time! :) You are never too old to buy a property - I have known many people not buy anything until their 50's or 60's. Now you need to start taking some positive action towards your goal! Good luck with it all! :D Best wishes, Olivia

[@Nic-tg2ei]

@@OliviaFenion Thanks Olivia, you're very kind. Now is the time!

[@Rangskool]

Look stunning Stay in touch 😊

[@OliviaFenion]

Thanks Rangika! 😊

[@888888886690]

My plan is to become a priest and get a rectory. For free. That is seriously good value. Then, after some time, I will remove my clerical clothing and reveal I am a property investor. And declare I shall convert the rectory into a 4 bed rental property with a south facing garden. I will acquire low income tenants and proclaim I am providing shelter for the poor - at a tidy profit. All in the name of God’s work. I may go to hell for this but at least thats rent free :)