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Case Study In Buy To Let [renting Off The Bank]

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House goes to Land Reg July 2004. 275K + ST 8.25K + .75K solicitor= 284K ball park.

100% IO mortgage [ just to be able to draw a straight comparison regards cost of buying to renting] @5.5% = £15,620 per annum to rent it from the Bank.

Currently let out at £600 per month = £7200.... after 1 month void [actual] buildings insurance, boiler safety checks, bit of maintenance, and agents 10% management charges, I reckon there's £5,500 nett left.

I know the person who is renting it, only in there because the landlord did not mind a 5 year old child, a dog, a cat , two rabbits [outside in hut] and the gold fish :D Otherwise the renter would not have even considered it . As a building surveyor friend of mine said, its a two bed bungalow in need of flattening and a house building in it's place, but at 284K for the plot the sums don't add up, even if he landlord decided to go down that route.

15,620- 5,500= 10,120 a year to subsidise the tenant........but theres always HPI ...........unless he bought at what I suspect is market peak or their abouts.

Edited by Catch22

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