in what kind of area? i mean anywhere just not london? or around 50mile radius london?
Fair to work out property yield based on multiple sources?
- Thread starter Sacred
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in what kind of area? i mean anywhere just not london? or around 50mile radius london?
Also, any recommendations on property sourcing companies. I've been in contact with a few but not particularly impressed with their attitudes. For background, I have some previous investment experience, but nothing related to residential property ( some commercial stuff I did a long time back - which I've treated more as a learning experience, than a real investment - it just about managed to match the returns a high street bank would have given me at the time 
)
)next to a flourishing uni.
Lets face it, people are going to lap up being a student for the rest of eternity, if we went into a recession and people were being layed off I know i wouldnt bother being a doley and trying to find a job, id go to uni and rack up some debt in the hope that by the time i finished we'd be moving out a recession and into a boom!
http://www.realtor.com/search/searc...86&typ=7&sid=fa9b40116b4346c39401291ed957aa5c
^ whats this about, so i can buy a house for $500 in detroit?? ROCK CITY?!?!
depending on what kind of property you are looking for will obviously effect your rental income.
an easy investment is a flat, however there are now so many flats that selling it again will be very difficult. i would saying your best bet would be a property with 3 beds, i mean me have one on at the moment that is 3 bed detached, rural location, large garden for a shade under £200,000 rental value on that is £675 PCM bit of quick maths i think that works out at 4.1% return
another property we have on is link detached 3 bed, split leval, £180,000, again £675 a month, 4.5% return.
its all about find a property that is cheap enough to see a return of around 5% a year. although, a lot of banks offer saving accounts at 6% +
around devon, as you can see above there isnt a huge return, but you get something in a city - bristol, 3 bed mid terrace - £200,000 rental £1000PCM return = 6%
thats just from a quick rightmove search.
if i was looking to invest i would aim at something in a city, ideally what you want a 6+ bedroom place in a student area.
theres one on rightmove that is 7bed terrace, Offers over £230,000, rental that would fetch £2500 a month, your then looking at £30,000 a year income which is a 13% return on your investment.
i stongly belive that the best idea is to get a large place rent it to uni students who share (100% there will always be people wanting to rent it) with a huge return.
my thoughts
could look to buy in plymouth, with the navy planning to move all ship operations to there(subs still at scotland) there will be a price hike near the shipyards due to more service personel being there, think a few areas are also under redevelopment there too at the mo, so things can be had for cheap.
Soldato
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We should also factor in the end of the 125% mortgage. The withdrawal of most 100% mortgages. Many lenders now insisting on at least 10%.
BTL mortgages on flats require at least a 25% deposit am I right?
you tend to need 15% for a BTL
You might be able to buy a house there for $500 but good luck actually getting to it without being murdered
Soldato
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Which is often paid using equity from a previous property. Hence good value portfolios are devalued by chasing the market up to its peak. As soon as prices stop rising, the whole portfolio is left unstable.
Of course if people are in it for the very long term, and have no trouble getting good, reliable tenants, that's fine. But with housing activity levelling off (at best!) and potential for a widespread Polish exodus as the bust part of 'boom & bust' catches up with us, BTL could turn from dream to nightmare very quickly. Especially for those who've bought inner city/town flats recently recently and aren't professional landlords... who have usually been around long enough to know when to buy in a property cycle.
I suppose people could always sign up for an Inside Track seminar to find out how they work miracles for their clients. Oh, hang on... no they can't.
http://www.guardian.co.uk/money/2008/mar/08/property.moneyinvestments
Andrew McP
The rental market will always been stable. unless house prices crash a monumentious amount its will be cheaper to rent than buy for a long time to come.
polish tenents around here seem to be dream tenents, they are all pretty dam good, working lots so never around, always seems tidy and rent always on time
polish tenents around here seem to be dream tenents, they are all pretty dam good, working lots so never around, always seems tidy and rent always on time
Sorry for the lack of response, but this thread seems to have taken on a whole new life since I last posted (!)
Thanks for the info.
Based on this I work out a yield of ~9%.
I'lll put it like this.
I can't pay the mortgage of the £375k flat with its rent alone. Rent simply isn't enough to do so.
But when I combine all the rental income to pay fo the total mortgage amount I will still have around about £1200 after each months deductions (service charge, etc).
As I said originally, I plan on living independantly of this income for a year or so, which is the reason for me thinking about it.
All tenancies will be locked into a guaranteed rent scheme also. To avoid any unpleasantries. I don't have a problem losing money to an agent as long as I have peace of mind, the remaining figure above also includes the letting agents fees.
In the mean time, as I mentioned, I plan to save so that the void period, between the exchange of contract and beginning of tenancy will be covered in terms of mortgage payments.
I know mad rapper and a few others are 100% against the idea, but as I say its not set in stone, I haven't bought anything yet. I'm going away to save a little and will be watching the prices very closely in the mean time.
Its my money and my future at the end of the day, I wouldn't take sucha big step without calculating the risks.
very wise.
and a return of 9% is very good effort lol.
the only reservation i would have on this one is that it is a flat, and there are lots of them now, lol. but as a long term investment i still think you have hit it on the nose.
whatever you end up doing, good luck
My point exactly, is that I wouldn't fall into this category.
I wouldn't work something like this if all the combined (net) income only JUST paid off the total monthly mortgage payments. I always calculate based on there being a buffer.
I plan on getting a fixed-rate mortgage when my mortgage is up in August and AFAIK I WILL be safe for 2 years.
I have to transfer my mortgage regardless, which is the reason for this whole thread as I was thinking of my options.
very wise.
and a return of 9% is very good effort lol.
the only reservation i would have on this one is that it is a flat, and there are lots of them now, lol. but as a long term investment i still think you have hit it on the nose.
whatever you end up doing, good luck
Thanks mate
Just a little background too.
I'm not looking to this as a buy one year sell the next kind of get rich quick scheme. I want to let both properties generate some rent to mantain themselves while gathering value, maybe live in either of them when I am in proper employment and done with Uni, and sell them on at some point.
This will be either when I see that they have made a good amount of money on top of what I paid for them.
Or I simply want to move onto something else and free up the capital.
I'm really not one of those people that looks at things as how much money I can make within a given time. I KNOW I will make money from these flats, and I can be patient enough to wait out such a profit.
My reason for the post is simply to get some feedback on my plan to set the flats up to maintain themselves.
Thanks mate
Just a little background too.
I'm not looking to this as a buy one year sell the next kind of get rich quick scheme. I want to let both properties generate some rent to mantain themselves while gathering value, maybe live in either of them when I am in proper employment and done with Uni, and sell them on at some point.
This will be either when I see that they have made a good amount of money on top of what I paid for them.
Or I simply want to move onto something else and free up the capital.
I'm really not one of those people that looks at things as how much money I can make within a given time. I KNOW I will make money from these flats, and I can be patient enough to wait out such a profit.
My reason for the post is simply to get some feedback on my plan to set the flats up to maintain themselves.
i think you've defo got your head screwed on right.
like you have said, over a small amount of time theres not going (with the view of what current prices are) to be a huge increase like there has been over the last 30 years.
sorry that your thread has been filled with such strong views, people obviously have stong views on the topic.
your very wise not expecting to be able to sell them within a year and like a tidy packet, it does take time, even if prices do go down, they will always come back up again.
Just to clear things up, i current still live at come, being an estate agent is obvious that some popele on here think im just touting and talk crap, trying to keep the market alive myself, but i also think / hope a lot of people can see where i am coming from.
as quoted above, i hope there is a big crash, i will then be able to afford to move out and buy property, but there is no hints at this at all at the moment, the media are just pushing everyone into that. if everyone thinks to same thing we will eventually make that happen!!
if there is a big crash, my job gets a bit rocky lol and obviously i earn less than now (is that possible
) but end of the day, houses could do with being more affordable for me lol