Stunning Water Chalets in the extremely desirable area of Port Dickson, Malaysia. Each unique water home has its own private swimming pool and open air garden and sits four metres above sea-level in the Malacca Straits. The development is a great investment proposition aimed at the growing tourist market from Hong Kong, China, the Philippines and Singapore.
Buy to Let mortgages are a reasonably new phenomenon used to purchase investment property, which is used as collateral on the loan. Before this system was introduced property investors had to take out a bank loan at a commercial rate, often at a significantly higher rate than standard mortgages.
Buy To Let mortgage rates tend to be much more competitive, so pretty much all property investment finance (at under £1m in any case) has become known as Buy to Let.
Most Buy to Let mortgages are 80-85% loan to value (LTV), where you put in at least 15-20% of the purchase price yourself and the rest is covered by the mortgage. You may also have to cover additional costs such as Stamp Duty, solicitor’s fees, refurbishment and renovation work.
Once your property is on the market you’ll also be faced with potential void periods and other maintenance costs. Prevention is always better than cure, so to avoid having to take out a costly loan to cover these costs savvy investors pre-empt these costs and ensure that their rental income more than covers their mortgage repayments.
Buy To Let mortgage providers want evidence of 125% coverage of the monthly rental income before they will grant the loan, to convince them that their money will be safe. To ensure this happens investors often buy Below Market Value (read our free report to find out more). So, if your mortgage repayments are £500 a month you will need to charge £625 (125%) for the rent in order to meet the lender’s requirements. Most savvy investors will actually ask for £650 instead and put the extra £150 away each month into a separate contingency account.
Example upfront costs:
Property purchased at £100,000
Buy To Let loan granted for £85,000
Plus personal investment of £15,000
In reality you could have to pay another £15,000 to purchase and ‘do up’ the property so that it’s in a fit state to be let out. Plus you might also need to put aside £5,000 to cover the maintenance, bringing the total amount you need to borrow to £40,000.
Additional Buy To Let property costs (as a percentage of the property price):
Deposit - 20%
Refurbishment - 15%
Maintenance - 5% (This will vary with interest rate levels and rent you achieve)
You could borrow the additional £15,000 to get a property ready to let, but this would be a bank loan with a higher rate of interest. Instead, most people decide to borrow against their existing property, because the loan is cheaper. This means that the extra costs you pay are at your existing Buy to Let mortgage rate and not the bank rate, which is invariably higher. Plus these payments do not affect the mortgage on your home, which is a huge bonus!
Stunning Water Chalets in the extremely desirable area of Port Dickson, Malaysia. Each unique water home has its own private swimming pool and open air garden and sits four metres above sea-level in the Malacca Straits.
The development is a great investment proposition aimed at the growing tourist market from Hong Kong, China, the Philippines and Singapore.
"Since my intitial contact with BTLI I've never looked back and now buying my second Caribbean property. I've had calls and emails from many other companies, but have never entertained them. BTLI are always willing and helpful, their service is fantastic and my confidence building in time. Not only this, BTLI offer excellent property deals and I wish I could purchase them all! I will no doubt continue my relationship with BTLI on a long term basis and would recommend them to anyone."
"I wish I’d had access to the Below Market Value Profits report twelve months ago when I first started investing, if I did, I’d own three times as many properties as I do now!" Richard B, Hayling Island.
"A most professional company providing excellent service with all the help and assistance you need. Having now purchased several units through Buy To Let Investors including units in the Caribbean I am more than happy to recommend their services to others." Stephen F. Southampton
"It has become increasingly difficult over the past couple of years to source the right deals, Buy To Let Investors fill that gap by coming up with great deals time and time again. As well as investments in the UK I have now followed them abroad in some of the best deals I have come across anywhere. The last three properties I have purchased have all come from the team." Martyn H. Leicester
"Having already purchased through Buy To let Investors and personally experiencing their bridging system first hand has given me the confidence to go out and source my own BMV deals. I have already negotiated two deals which are now proceeding to completion and I hope to purchase many more over the coming months."
