Having an existing portfolio makes it easier to buy additional property
News Category: Industry News
Published: 28-Feb-2008
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Buy-to-let landlords with a greater number of properties find it easier to make further purchases, it has been claimed.
According to Peter O'Donovan, mortgage manager for Bestinvest, having an existing portfolio can prove an advantage when buying property.
He said that investors could use properties with a smaller mortgage to borrow additional funds for new purchases.
Mr O'Donovan explained: "[People] utilise properties that have got a smaller mortgage and aggregate the rental calculation over the whole portfolio rather than over one property.
"So the properties with less mortgage left to pay can maybe be used to borrow more than the normal 85 per cent to make a new purchase. In that way, people with portfolios are usually able to utilise that portfolio to help them with further purchases."
He added that landlords would have difficulty meeting their mortgage needs if they only had a single property, particularly if it was located in an area that was not profitable.
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