First time Buy to Let Investor advice

[merlin34]

Would the seasoned members think it is still viable to buy property to rent? I am considering buying a flat or terraced house with equity from our house to use as an investment for my children. I am finding though as property prices have increased the interest only mortgage repayments together with additional costs such as insurance and maintenance costs mean that you are having to subsidise the monthly repayments. As an example on a £100k flat with 85% interest only mortgage and 125% uplift we would be paying £487 pcm plus paying for leasehold and insurance costs. We would need a rental income just to break even. Is it a case of so be it until you can re-mortgage and release equity in your new property in 6 months time?
Any advice would be welcome.
Great site!
Cheers,

[jai]

I would say try to find a better deal. On the whole I dont go for leasehold flats because of the extra service charges and ground rent. Much better to go for the terraced house. Also try and negotiate it to below market value. If it's been on the market for a long time or you have a motivated seller you could get a bigger discount and then you figures would stack up.

Also work out what your strategy is. Do you want +ve cash flow from day 1 or are you looking for capital growth? If it's capital growth and you buy in the right area then it's ok to supplement the rent.

I know a lot of people who are even buying outside their own area to make sure they have positive cash flow from day 1. It's all about your own circumstances.

Regards