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
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.
The cloud competition for database hosts is fierce. How do you evaluate a cloud provider for your database platform? In his session at 18th Cloud Expo, Chris Presley, a Solutions Architect at Pythian, gave users a checklist of considerations when choosing a provider. Chris Presley is a Solutions Architect at Pythian. He loves order – making him a premier Microsoft SQL Server expert. Not only has he programmed and administered SQL Server, but he has also shared his expertise and passion with b...
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, contrasted how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He showed how the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He also demoed building immutable pipelines in the cloud ...
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
In IT, we sometimes coin terms for things before we know exactly what they are and how they’ll be used. The resulting terms may capture a common set of aspirations and goals – as “cloud” did broadly for on-demand, self-service, and flexible computing. But such a term can also lump together diverse and even competing practices, technologies, and priorities to the point where important distinctions are glossed over and lost.
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, discussed using predictive analytics to mon...
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service. In his session at 19th Cloud Exp...
Fact: storage performance problems have only gotten more complicated, as applications not only have become largely virtualized, but also have moved to cloud-based infrastructures. Storage performance in virtualized environments isn’t just about IOPS anymore. Instead, you need to guarantee performance for individual VMs, helping applications maintain performance as the number of VMs continues to go up in real time. In his session at Cloud Expo, Dhiraj Sehgal, Product and Marketing at Tintri, sha...
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...