Welcome!

Blog Feed Post

Let to let – a guide

If you are reading this, then in all likelihood, you’re a landlord. It shouldn’t entail a massive leap of imagination to picture a tenant paying you to live in your property, seeing as this is what the investment is all about. What might be a bit harder to imagine is taking that money and using it to pay rent… to your own landlord. This, ladies and gentlemen, is the ‘let to let’ phenomenon.

Do you mean that property sub-letting strategy?

What, rent to rent? The latest get-rich-quick scheme to do the rounds, rent to rent entails renting a property from a usually distressed landlord, doing the place up and sub-letting it for a profit. The legal set up can be a bit of a nightmare and the many claims that it can create a large ‘passive’ income are often treated with more than a little suspicion. (And then there’s the fact that, in October 2013, one of its biggest names nicked off with £60,000 worth of tenants’ deposits!)

No, I’m talking about let to let (sometimes referred to as ‘rent to let’, which might be where the confusion arises) that entails being the landlord of a buy to let property that you own, whilst simultaneously paying rent to live in a property that you don’t.

On the face of it, it seems counter-intuitive. To an investor, ‘dead money’ is a nightmare, and ‘paying someone else’s mortgage’ (the oft-held pejorative view of renting) is about as dead as money can get. But for some landlords, particularly younger investors who haven’t yet found their ideal home, or whose careers are still mobile, it’s the perfect setup.

A foot in the door

For renters, owning a rental property of their own can be a good way to get on the property ladder without having to sacrifice living standards or choice of location. A lot of let to let-ers live in fairly expensive areas, and would find it difficult to finance a starter home in the same area without downsizing. Their budgets might not allow for a deposit on a comparable place, but might just cover a buy to let property in a less expensive area.

Furthermore, with our cultural emphasis on homeownership and constant reports of the difficulties faced by first time buyers, it can be easy to forget than some folks simply prefer the renting lifestyle. Moving every six to twelve months can be rotten, but the flipside is the freedom that renting affords. Some people might be making big changes – like moving in with a partner, for instance – and want to ‘test the water’ before committing. Others enjoy being able to relocate at short notice without the hassle and stress of a property chain.

Suitable buy to let products for let to let

The strength of the buy to let mortgage market has improved the range and flexibility of products on offer, and there are now a fair few let to let mortgage options available.

As with any buy to let mortgage, your lender will require the rental income to cover the mortgage interest repayments by a certain amount, usually 120–130%. In addition, the most favourable interest rates and product features can be found at LTVs of 60% or lower, meaning that you’ll need at least a 40% deposit to put down.

Bear in mind that a number of buy to let mortgage lenders require that you already own your own home, meaning that your options as a renter are more limited than that of other investors. There’s also the impending Mortgage Market Review to consider – with the tightening of criteria in the residential mortgage market, it’s feasible that more people will attempt to fraudulently obtain buy to let finance in order to get a mortgage. To stop this, more lenders might start closing their doors to those without a residential property in the future.

Let to let property management

Managing a single let to let property is really no different to managing a single buy to let property – the only difference is that you’re more likely to have to up sticks at some point, and this could present a problem if you rely on being in close proximity to your tenants.

Otherwise, the choices are much the same. Do I self-manage, or do I use an agent? Do I invest for income, capital growth, or something in between? What sort of tenants do I want? How involved do I want to be in the day-to-day running of the property?

If you are completely new to the landlord lark, a good place to start is our step by step guide to becoming a landlord.

Some other bits and bobs that you might find interesting:

  • Capital growth vs. income
  • Self-managing your buy to let property
  • Choosing a letting agent

And of course, for the all-important matter of financing your let to let property, call us on the number above or request a quote to see how we can help you to find the most suitable buy to let mortgage.

Read the original blog entry...

More Stories By TurnKey Landlords

Amelia Vargo is an online marketing executive for CT Capital. Amelia writes for Turnkey Mortgages, Turnkey Landlords, TurnKey Bridging, TurnKey Life and Commercial Trust.

Latest Stories
Today most companies are adopting or evaluating container technology - Docker in particular - to speed up application deployment, drive down cost, ease management and make application delivery more flexible overall. As with most new architectures, this dream takes significant work to become a reality. Even when you do get your application componentized enough and packaged properly, there are still challenges for DevOps teams to making the shift to continuous delivery and achieving that reducti...
SYS-CON Events announced today that Daiya Industry will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Daiya Industry specializes in orthotic support systems and assistive devices with pneumatic artificial muscles in order to contribute to an extended healthy life expectancy. For more information, please visit https://www.daiyak...
SYS-CON Events announced today that Nihon Micron will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Nihon Micron Co., Ltd. strives for technological innovation to establish high-density, high-precision processing technology for providing printed circuit board and metal mount RFID tags used for communication devices. For more inf...
SYS-CON Events announced today that Massive Networks, that helps your business operate seamlessly with fast, reliable, and secure internet and network solutions, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. As a premier telecommunications provider, Massive Networks is headquartered out of Louisville, Colorado. With years of experience under their belt, their team of...
SYS-CON Events announced today that Suzuki Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Suzuki Inc. is a semiconductor-related business, including sales of consuming parts, parts repair, and maintenance for semiconductor manufacturing machines, etc. It is also a health care business providing experimental research for...
"Our strategy is to focus on the hyperscale providers - AWS, Azure, and Google. Over the last year we saw that a lot of developers need to learn how to do their job in the cloud and we see this DevOps movement that we are catering to with our content," stated Alessandro Fasan, Head of Global Sales at Cloud Academy, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Enterprises are moving to the cloud faster than most of us in security expected. CIOs are going from 0 to 100 in cloud adoption and leaving security teams in the dust. Once cloud is part of an enterprise stack, it’s unclear who has responsibility for the protection of applications, services, and data. When cloud breaches occur, whether active compromise or a publicly accessible database, the blame must fall on both service providers and users. In his session at 21st Cloud Expo, Ben Johnson, C...
21st International Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Me...
Many organizations adopt DevOps to reduce cycle times and deliver software faster; some take on DevOps to drive higher quality and better end-user experience; others look to DevOps for a clearer line-of-sight to customers to drive better business impacts. In truth, these three foundations go together. In this power panel at @DevOpsSummit 21st Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, industry experts will discuss how leading organizations build application success from all...
SYS-CON Events announced today that mruby Forum will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. mruby is the lightweight implementation of the Ruby language. We introduce mruby and the mruby IoT framework that enhances development productivity. For more information, visit http://forum.mruby.org/.
Cloud-based disaster recovery is critical to any production environment and is a high priority for many enterprise organizations today. Nearly 40% of organizations have had to execute their BCDR plan due to a service disruption in the past two years. Zerto on IBM Cloud offer VMware and Microsoft customers simple, automated recovery of on-premise VMware and Microsoft workloads to IBM Cloud data centers.
Why Federal cloud? What is in Federal Clouds and integrations? This session will identify the process and the FedRAMP initiative. But is it sufficient? What is the remedy for keeping abreast of cutting-edge technology? In his session at 21st Cloud Expo, Rasananda Behera will examine the proposed solutions: Private or public or hybrid cloud Responsible governing bodies How can we accomplish?
Today traditional IT approaches leverage well-architected compute/networking domains to control what applications can access what data, and how. DevOps includes rapid application development/deployment leveraging concepts like containerization, third-party sourced applications and databases. Such applications need access to production data for its test and iteration cycles. Data Security? That sounds like a roadblock to DevOps vs. protecting the crown jewels to those in IT.
SYS-CON Events announced today that Cedexis will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Cedexis is the leader in data-driven enterprise global traffic management. Whether optimizing traffic through datacenters, clouds, CDNs, or any combination, Cedexis solutions drive quality and cost-effectiveness.
Elon Musk is among the notable industry figures who worries about the power of AI to destroy rather than help society. Mark Zuckerberg, on the other hand, embraces all that is going on. AI is most powerful when deployed across the vast networks being built for Internets of Things in the manufacturing, transportation and logistics, retail, healthcare, government and other sectors. Is AI transforming IoT for the good or the bad? Do we need to worry about its potential destructive power? Or will we...