First time Buyer + BTL Property

[Kevin Reid]

Dear All,

The situation is this;

Mum gifts a flat to me (which I live in) once the mortgage is paid. Current Val circa £270k.
With my income I can remortgage this property for circa £150k on an interest only, 5yr fixed plan.
Monty repayments circa £300.

I then use £100k of this to repay my mum (the amount she paid off the mortgage) and use the remaining £50k as a 25% deposit on a BTL flat in Manchester, value £200k.
Mortgage plan is similar to the above, thus total outgoings will be roughly (£300+£300 mortgage per month + £400 for service charges/other bills on both places).

I would expect a rent on the BTL of circa £800pcm, thus meaning I will be around £200 worse off per month than I am currently.

I am looking to ideally do this all in my company name.

Does this seem quite sensible?
How would I go about acquiring a third property after these two deals are complete? Would it be through raising another £50k deposit?
My long term plan is to grow this portfolio over the next decade considerably.

Thank you all.

 

[Longterminvestor]

I would check the tax situation regarding your mum's property transfer to you - but if there is some kind of IOU involved then this may be ok as you are effectively paying for it further down the line.

I agree with buying these properties in your company as, from my knowledge, you can still offset loan interest against your profits which is something the government is tapering out if your held the properties in your own name. There is of course extra costs associated with running your company but this should be irrelevant in the longer term. As far as raising funds for further properties I would build up enough equity so you can remortgage and then take as much as possible in finance (assuming rent will cover your mortgage costs) as the interest would be offset against profits.