corradoboy

I've seen a property for sale in Country Life magazine which has a 4 bed, two 3 bed and a 2 bed holiday let for IRO £1m. I have equity in my current property IRO £100k. Is it ridiculous for me to think the banks might support me buying this with the possibility that the rentals will cover the repayments, along with my potential income as a self-employed driving instructor and my partner as a hairdresser ? The lets are self-catering so apart from weekly freshening between clients they would (maybe) look after themselves. I aren't scared of hard work and long hours, but is this far-fetched for a humble soul like me to realise my dream of moving to Cornwall for a more peaceful and relaxed life in a stunning home overlooking the sea, away from towns and cities ?

fatherpierre

A £900k morgage..........

Ouch.

Have you got a projected and the past income from the said properties?

corradoboy

Not yet, just sowed the seed in my head this evening so no time to acquire any facts. I can't help but think of all those people on 'No going back', Grand Designs' and 'A new life...' who chance it and come good in the face of extreme odds. Can I do it

Has anyone any idea what the rental could possibly bring in ?

fatherpierre

Depends on the exact location really. If it's a sea view then £££££££££££££

Go online and see what similar properties achieve in high/med/low seasons in the same area.

Odds on

Watch out that the CNLA don't get wind of you venture.

corradoboy

A very quick look and 4 beds can net up to £2.5k per week. Estimating the interest on the loan at maybe £4k pcm there is some light visible

fatherpierre

Good luck if you can pull it off.

A risk with property prices as they are now, not to mention the interest rates.

£2.5k a week!!! Kin ell, you go somewhere nice where the food's good and beer's cheap for a fraction of that!

corradoboy

Amongst the many doubts I have that it is more than likely unachieveable is the state of the economy. Property prices are at a peak and interest rates are rising making the timing pretty dangerous, but I'm gonna make enquiries. Even if I don't do it now, it will lay the groundwork for the future. I have a dream of doing this in 5 years or so when I've hopefully decimated my current mortgage, but the idea was to move down there owing very little just to be relaxed, whereas this will be the opposite, but could potentially mint me or break me for life.

fatherpierre

Indeed.

Now's a dangerous time to be sinking your *** into something like this.

I'm sure the property as a whole is priced at its peak, leaving potential profit set at the economy's current market level - which is forecast to drop a bit.

Worth keeping an eye out though for when the dip if/when it comes.

I am in a similar position as I have a house that I want, but it's currently priced to high and I know it'll drop 50k over the xmas period, or be withdrawn. The Mrs wants to pay the asking price - silly girl.

warrenm2

90% BTL mortgage is doable - but as has been said, fewer lenders are actually likely to lend to you now - so you'll probably find unavailability of finance the biggest problem

jods

I have a villa in one of the most visited places on the planet and if I get 30 weeks a year booked I consider that a great year.

We cover the mortgage, gas, elec, phone, Council tax, pool cleaning, gardening etc etc etc EVERY month - regardless of income

You would have too also.

900K seems madness to me - Looks like rates might be going up soon.
Don't go into this without getting some proper grown up advice.

corradoboy

I wouldn't dream of not taking advice, and am fully aware that this is almost certainly a pipe dream. I just had a look at a mortgage quote which would be IRO £5k/m minimum, with £40k of stamp duty at purchase If we could realise 50% capacity with an estimate of £4k/wk rentals that would bring in £104k/yr to offset £60k interest payments. Obviously there will be other expenses such as council tax, insurances, running costs etc which could see it breaking even, with the only profit being in equity. Of course, if/when we sold the taxman would be waiting for his slice of that too I suppose it's for sale for a reason, and that reason might be that it's already failed for the current owner to some degree !

jods

Give it 12 months

I reckon you could see a £150k drop in price on a £1000k price today

Whatever you do - Keep reaching for the stars but keep your feet on the ground.

Snazy

If you have money to invest, maybe something like a Florida villa.

The place we rent annually is roughly $300,000 (£150-160k UK)
When we book it up, its usually touch and go, so I do it a year in advance.
As they rent it BELOW the going rate, they manage to book all 52 weeks of the year up (inc their own time there)

With rent at £375 a week, thats a monthly of £1500.
Many others charge £450-650 a week depending on season.

A lot of people do this from the UK by getting local residents to look after their properties for them for a small sum.

Just a thought and all that. Certainly what I am looking to do, in the hope of one day managing to flee the shores of the UK lol

corradoboy

I don't just want an investment/income that I never see. I want to live there, enjoying the views and tranquil setting daily, as well as having it paid for by the visitors. I agree with the dreams of fleeing the UK, but for now this is where I'm at until NZ becomes acceptable to the missuse.

fast bloke

Getting the loan should be easy enough, but on a commercial mortgage basis you might be loking at BOE + 3% for 90% LTV. The would make interest payment around 6k a year. It is also difficult to convince banks to do interest only commercial deals..... they usually prefer 10 or 15 year repayment.

fast bloke

Do you know something that no-one else does?

Luminous

iTrader: (3)

I would think the most important thing to do is to look into the past history of the property in terms of its rental potential. The current owners must have being running something that size as a business. There should be some signed accounts for you to look at.

Have a good look at several years worth. See what sort of income they are getting, and what they are doing to get that income. For example, how well advertised is the property? What condition are things in?

They will obviously want to overstate income, so be careful to not have the wool pulled over your eyes. They will be also be selling for a reason, so it would be good to find out what that is.

The major worry would be if it was a well run business, with everything in good condition, well advertised etc, and yet still did not have a lot of spare income to cover costs.

I'd also suggest being cheeky and go and talk to other business owners in the area and tell them what you are trying to do. You may be surprised as to how much they are prepared to help you. Talk to agents, tourist information etc etc. You want to find out as much as possible about the area, and what sort of markets you can target. Tourism being an obvious one, but contractors etc may be an option depending where it is.

Fuzz

Cornwall... Summer holiday village,
You'd be lucky to fill the house year round Maybe July, August and September, but what about the rest of the year. Who you going to rent it out to?


Andy