Buy-To-Let Help

Hey hey Monzo crew,

So unfortunately in the past few weeks my Nan has passed away but as a result in this I have been left £50,000 and I’m looking to buy a house with this as the deposit.

So basically I’m 21 and currently live with my parents, I have no need to move out anytime soon and currently my girlfriend is in Uni and lives with us (to therefore put the extra money in savings, instead of paying their high rent fees!)

So in respect of this I thought it would be good to go down the buy-to-let route and rent out the property for 2 (maybe 3 years) before moving into the house in order to get even more money and in the hope of saving during this time as well.

It would be nice to then remortgage after the 3 years and buy another property and so on, but that will need to be thought about.

Is there anyone here who has experience with HMO’s that I can pick their brains with for a minute?


Sorry to hear about that. I hope you’re ok.

Buy to let is a funny business. Whereabouts do you live? You often need to put quite a large amount of the equity down as a deposit, much more then a traditional mortgage, so in some parts of the UK, unbelievably, 50k might not hit the spot.

The remortgaging is a good idea in principle, however it will mean you have two mortgages and two exposures - you’ll have to prove that you could afford both mortgages and your expenses/living expenses for up to three months without tenants.

What’s the end goal? To set up a property business or just to make a passive income? There may be better, less risky ways.

Hey! Thanks for your reply

I live the in the south, near Portsmouth. From looking at houses for £190-220k I can get a 3/4 bed house which is close to the Uni & has lots of public transport. So that would be 25% as a down payment.

Obviously I’m new to this so there’s so much more I need to learn, which might work out well as it gives me some extra time to save.


You might be ok, generally a lender will ask for 25% but some will want as high as 50% so you might need to shop around.

Things to be wary of and factor into your decision

*APR - as you’re at the low end of the equity scale APR might be higher then normal. If you’re planning to move in eventually don’t fix for longer then is necessary.

*Repairs - You’ll need money to get the property up to a liveable standard and to be able to carry out repairs, over the next couple for years.

*Chance of bad tenants - People can be awful and damage can be expensive, make sure you’re insured.

It might be worth having a look at Habito - see what they can recommend. I’d have a good read up on BuytoLets generally too just to familiarise yourself with the process.

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So sorry for your loss

I’d say this is definitely one to speak to a financial advisor or mortgage broker about. The ongoing expenses are an important consideration as Codf says

Fly to Vegas and put it all on red? :yum:

Really don’t do that

There’s so much uncertainty with Brexit and the like. Red may be a safer bet.


HMO is a great way to make a lot of money. However, it has headaches alongside it. There are huge legal requirements that you as a landlord must adhere to (vs standard rental).

The best option (if you’re adament about property) is either Buy to Let with AirBNB if it’s a good location. Or buy to let & get a management company to take care of it for you, and forget about it and concentrate on everything else.


May also be worth pointing out or considering that if your girlfriend graduates university, is there a possibility that her job may involve her needing to move to another city? If the property is in negative equity, or has dipped in value, could this put a strain on the move?

Definitely get some financial advice as @Rat_au_van states, it’s a lot of money.

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APR is something I will need to get advise about, but looking for a shorter fixed term might be good, although brexit haha.

Repairs, most (if not all) the properties i’m looking at have either just been done up, or are priced low enough that they’re worth buying and then fix up.

Bad tenanats, for sure bad tenants - these will be students so i’m expecting the worse, BUT a good thing is the house doesn’t need to be AMAZING to begin with with the city i’m buying the house in there’s not a huge amount of options for students so rent for most friends I have is £450 / month plus their bills. So already ill be more than doubling my mortage payment.

Ill take a look at Habito


Yeah for sure, got to get that sorted ASAP. Love casino, love red! Don’t tempt me!


That’s one thing that scares me, I might hold off and just continue to save money for 10-12months or so.


Yeah, I think ill be going down the 'Pay the esate agent 10/15% to look after the contracts, all contact and any extras - they can also act as an adviser when i’m having a problem with something.


In terms of her moving away that won’t really be in the picture, she doesn’t want to move away and we have already spoke of this - although if she were I would still keep the house and would just rent a room elsewhere (Or continue to live with me, my town has direct links to most big cities)

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Sorry to here about your nan,

I had a sillilar inheritance in 2011, and considered buying a property at the time, but in the end i used it as a one of opertunity to go travelling with my gf (now wife) round india, asia, NZ and Oz for two years which was absolutely amazing. We only ended up being able to buy a house last year after starting saving from scratch after the travelling.

trying to save over the last few has been hard and occasionally i’ve thought ‘what if’ or ‘if only’ I had used that money for property when younger. But really if I went back in time and had the opportunity do do things differently I wouldn’t change a thing, if anything I’d probably squeeze my belt a bit more whilst traveling and load the credit card up to fit South America in.

So I guess my point is your young and if your so inclined there are other things you can do with that money now whilst young that you can’t necessarily do when your old and retired which would likely be the next time you have such amounts of cash available.

But buying a house at 21 is still sweet so best of luck.


Thanks for your reply man! Thankfully my job offers quite a lot of travel to Poland, India & Canada so I get to experience the world a little. I do love travelling so much but I wouldn’t want to ‘waste’ the money (It wouldn’t be a waste, but it’s similar to spending it on food haha)

I think right now I might save for a further year while Bexit is happening, ill also speak to a financial adviser and see what he suggests - I suppose ill be able to save another 25-30k (If i’m strict! - strict being the keyword here, I love food too much!)

Thanks to everyone so far that has provided help! :slight_smile:

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Loads of things to consider then in terms of buying. Hope you like spread sheets!

Definitely speak to a morgage broker as they will advise what deposit you need for buy to let and what rate you can expect on the morgage.

One thing to consider and account for in your calcs is if you buy to let then you wont get the stamp duty relief for first time buyers, so for a £200k property i think you will have to pay £7.5k in stamp duty so your £50k deposit will turn into a £42.5k deposit, 21.25% not 25%. You may be able to get around this in a HMO if you live there in a room, and thus get a normal morgage but i’m not certain.

Haha! I spend my entire life on spreadsheets, all my closest friends are spreadsheets haha!

Yeah, i’m in contact with a few currently so seeing what they can offer ‘for free’ then will actually pick one based on that.

Oh god don’t get my started on this, I noticed this last night so it might be worth me living in the house for a few months and then moving to a buy-to-let mortage, but again not sure if this is even allowed so will be a good question to ask Mr broker because 7.5k is hella money and i’m not going to loose that or less I really have too!

Keep in mind all the extra expenses that will come up when deciding on how much to spend on a property,

You have stamp duty, repairs, making the property generally suitable for HMO , the extra regulations of HMOs over regular lettings and the usual gas safety certificates etc

Not trying to put you off, I think property is the way to go , but don’t overspend on the actual property .

Also when budgeting keep in mind management agency fees.

Highly recommend you visit r/UKPersonalFinance over on Reddit - this question comes up a lot and they have some great advice. Definitely check out their flowchart too which can help you sort out your priorities.

Maybe putting the money into some REITs might be a more preferable option if you’re also a first-time buyer?

It might be worth speaking to a financial advisor depending on your goals?