Could I have done better.

Could I have done better.

Author
Discussion

drainbrain

5,637 posts

110 months

Thursday 26th January 2017
quotequote all
Hugo a Gogo said:
My granny lived a couple of hundred yards from there
I'm told Haghill was posh about 50 years ago. It's currently making a comeback too. Worth investing in imho.

Croutons

9,807 posts

165 months

Thursday 26th January 2017
quotequote all
For some perspective OP:

- Purchased ubiquitous 2-bed flat "off plan" in 2006 in up-and-coming-guaranteed-to-amaze-with LE16 for a shade under £120k.
- Empty for first 18 months while I tried to flip it at 140k (others were genuinely achieving this and more) subbing at maybe £350pcm for the mortgage (assume £4200/ year so £6300 lost).
- Paid standing charges for electricity/ water/ council tax after 6 months, at least another £80 PCM over that time.
- Also ground and management charges (new block so no sinking fund) came to circa £100 pcm

- Tenanted from 18 months point onwards gained circa £120 pcm over the costs (ie rent less agent charges), enough to cover the ground/ management charges but not a lot more.

- Sold at £110k to get rid of it 8 years later.

Total down the swanny probably £17k all in, plus infequently time (had it taken more time I would have taken more notice/ interest, and acted sooner).

So it's not a one-way street.

lewisf182

2,084 posts

187 months

Thursday 26th January 2017
quotequote all
Bought my first BTL in August 2013 for £80k, deposit of £20k. Latest valuation is a round £140k, it rents for £650pcm and have only had 1 void period during that time. Don't see where else I could have got £20k to do that for me tbh?

Plan is to sell up this year and get into development to try build up a bigger warchest to expand my portfolio.

Bought one last year in April for £80k, rents for £550 PCM, probably could have got more had people queuing up for it. Value probably around £85k so capitol gains much smaller which we knew before hand

Shnozz

27,422 posts

270 months

Thursday 26th January 2017
quotequote all
lewisf182 said:
Bought my first BTL in August 2013 for £80k, deposit of £20k. Latest valuation is a round £140k, it rents for £650pcm and have only had 1 void period during that time. Don't see where else I could have got £20k to do that for me tbh?
Where the chuff is that? From £80k to £140k since 08/13? Amazing

lewisf182

2,084 posts

187 months

Thursday 26th January 2017
quotequote all
Shnozz said:
lewisf182 said:
Bought my first BTL in August 2013 for £80k, deposit of £20k. Latest valuation is a round £140k, it rents for £650pcm and have only had 1 void period during that time. Don't see where else I could have got £20k to do that for me tbh?
Where the chuff is that? From £80k to £140k since 08/13? Amazing
A flat in Kelham Island, sheffield (massively being touted at the moment as one of the coolest up and coming places), Somebody was offloading around 4/5 flats a time in the same block meaning prices were kept low at around £80k. I was shouting at my parents to buy a couple but they wouldn't have it....their loss! Could only afford one at the time but I'd have bought every single one If I could have.

They were brand new in 2007 costing £170k... somebody made a big big loss there, I suspect they were repossessions! I'd never buy a new build.

Even at £140k they make a solid investment though renting for £700 now.

Flats at around £80k I think are the best property for rental income, capital gains perhaps no but if you buy right it just might work on both fronts.

Shnozz

27,422 posts

270 months

Thursday 26th January 2017
quotequote all
lewisf182 said:
A flat in Kelham Island, sheffield (massively being touted at the moment as one of the coolest up and coming places), Somebody was offloading around 4/5 flats a time in the same block meaning prices were kept low at around £80k. I was shouting at my parents to buy a couple but they wouldn't have it....their loss! Could only afford one at the time but I'd have bought every single one If I could have.

They were brand new in 2007 costing £170k... somebody made a big big loss there, I suspect they were repossessions! I'd never buy a new build.

Even at £140k they make a solid investment though renting for £700 now.

Flats at around £80k I think are the best property for rental income, capital gains perhaps no but if you buy right it just might work on both fronts.
Please message me if you stumble across anything similar that you aren't hoovering up! That is a cracking return (I am Leeds based also..)

drainbrain

5,637 posts

110 months

Thursday 26th January 2017
quotequote all
Shnozz said:
Please message me if you stumble across anything similar that you aren't hoovering up! That is a cracking return (I am Leeds based also..)
I stumbled across a mob called Hunter Jones who're selling investments in projects in your area by a company called Empire Property Holdings. Their website's www.hjinvest.com

Looked quite interesting.

I'm bored rigid with btl and might well get involved with their Dolphin Trust investment in Germany rather than just buying another UK renter because there's nothing else worth investing in.

Storer

5,024 posts

214 months

Thursday 26th January 2017
quotequote all
There was a massive flat building push by the University in the mid 2000's. I suspect it was to alleviate some of the dire student rental houses.
It has killed house price inflation in the traditional student areas. Glad we sold when we did as it would have been a very poor investment since. I may not have made anything but I did save £16k in accommodation costs for my son at Uni (5 year course).

oldnbold

Original Poster:

1,280 posts

145 months

Thursday 26th January 2017
quotequote all
Croutons said:
For some perspective OP:

- Purchased ubiquitous 2-bed flat "off plan" in 2006 in up-and-coming-guaranteed-to-amaze-with LE16 for a shade under £120k.
- Empty for first 18 months while I tried to flip it at 140k (others were genuinely achieving this and more) subbing at maybe £350pcm for the mortgage (assume £4200/ year so £6300 lost).
- Paid standing charges for electricity/ water/ council tax after 6 months, at least another £80 PCM over that time.
- Also ground and management charges (new block so no sinking fund) came to circa £100 pcm

- Tenanted from 18 months point onwards gained circa £120 pcm over the costs (ie rent less agent charges), enough to cover the ground/ management charges but not a lot more.

- Sold at £110k to get rid of it 8 years later.

Total down the swanny probably £17k all in, plus infequently time (had it taken more time I would have taken more notice/ interest, and acted sooner).

So it's not a one-way street.
Funnily enough I was offered a simular deal in that area, before I purchased the property I've just sold. The brother of a friend was involved with a company that were selling flats by the bucket load with a very small deposit needed. I'm not keen on flats anyway and the guys I know that did go ahead found themselves in the same situation as you.

Glad I gave them a body swerve. But yes things don't always go well, my house is not far from your flat, so prices have been fairly flat until 18 months ago.

Jerry Can

4,424 posts

222 months

Thursday 26th January 2017
quotequote all
drainbrain said:
I stumbled across a mob called Hunter Jones who're selling investments in projects in your area by a company called Empire Property Holdings. Their website's www.hjinvest.com

Looked quite interesting.

I'm bored rigid with btl and might well get involved with their Dolphin Trust investment in Germany rather than just buying another UK renter because there's nothing else worth investing in.
fk me! really? it's unregulated

drainbrain

5,637 posts

110 months

Thursday 26th January 2017
quotequote all
Jerry Can said:
fk me! Really? It's unregulated
Regulation doesn't inspire me with confidence and is of no interest to me at all.

But I like their project (very much) and because of it's high likelihood of being carried through successfully I'd invest in it, and will.

Perhaps naively, my 'assessment of risk' centres entirely on profitability. Simply put, will the project succeed or fail financially?

I'd give it a >95% chance of success.

By that yardstick, whether or not it's regulated matters not a toot.

nct001

733 posts

132 months

Friday 27th January 2017
quotequote all
Shnozz said:
lewisf182 said:
Bought my first BTL in August 2013 for £80k, deposit of £20k. Latest valuation is a round £140k, it rents for £650pcm and have only had 1 void period during that time. Don't see where else I could have got £20k to do that for me tbh?
Where the chuff is that? From £80k to £140k since 08/13? Amazing
My ex business partner bought a two bed ex council house in Aylesbury for £141k as a buy to let in 2009


It's £250k plus now


(Wish I'd gone in on that one) plus a tidy rental income as well.

twoblacklines

1,575 posts

160 months

Saturday 28th January 2017
quotequote all
caziques said:
Bought 168 acres of forestry around 2002 (in NZ), £70,000.

Just having the trees harvested, which should (fingers crossed) provide a net return (after roading and replanting etc) of over £150,000.

Had to pay rates each year, £3000? total.

Land is probably worth £150,000, and it won't be too many years before we have a few thousand pounds of carbon credits each year. I'll let the children do the next tree harvest.

Exchange rate fluctuations have meant the returns in NZ dollars are not as great.
Not considered solar energy instead?

£1250-2000 per acre per year so you could be sitting on £250k per year of revenue there.

sugerbear

3,961 posts

157 months

Monday 30th January 2017
quotequote all
oldnbold said:
I have a small BTL portfolio. I have just sold the first property that I bought 10 years ago when I knew nothing about BTL. It has been the worst performing property that I've had both in terms of income, capital gain and problem tenants, by a long way.

Now it's sold I've got actual real world figures on my investment over that 10 year period. I originally put down a £13k deposit to buy, and over the 10 years of ownership I've had £32k of net rental income, actual income less agent costs, mortgage costs, repairs, legal and selling costs etc. The sale has generated a £28.5k profit.

So my £13K invested 10 years ago has produced just over £60K pre tax profit.
Once you have taken into account capital gains tax and the tax you have paid on the rental income what did you actually make?

Are you running this through a limited company as the concept of pre-tax profit for an individual doesn't make much sense.

Prohibiting

1,734 posts

117 months

Monday 30th January 2017
quotequote all
Hold out buying for now, we're in for a big property crash this year so get ready to buy for when that happens laugh

(I hope)

oldnbold

Original Poster:

1,280 posts

145 months

Monday 30th January 2017
quotequote all
sugerbear said:
oldnbold said:
I have a small BTL portfolio. I have just sold the first property that I bought 10 years ago when I knew nothing about BTL. It has been the worst performing property that I've had both in terms of income, capital gain and problem tenants, by a long way.

Now it's sold I've got actual real world figures on my investment over that 10 year period. I originally put down a £13k deposit to buy, and over the 10 years of ownership I've had £32k of net rental income, actual income less agent costs, mortgage costs, repairs, legal and selling costs etc. The sale has generated a £28.5k profit.

So my £13K invested 10 years ago has produced just over £60K pre tax profit.
Once you have taken into account capital gains tax and the tax you have paid on the rental income what did you actually make?

Are you running this through a limited company as the concept of pre-tax profit for an individual doesn't make much sense.
Not not through a limited company. As different individuals pay different rates of tax in this country I thought stating pre tax profit was entirely sensible.

trowelhead

1,867 posts

120 months

Thursday 2nd February 2017
quotequote all
lewisf182 said:
Flats at around £80k I think are the best property for rental income, capital gains perhaps no but if you buy right it just might work on both fronts.
I think i would have to agree with you there.

I'd add - Flats at around 80k, under 1 mile from major city centre (Mcr, Lpool, Bham, Leeds etc)

Rents around £500-600 pcm. Get something relatively modern with good management company, and reasonable service charges. Pretty hassle free and decent yields. Ex LHA can work well as on the whole they do not overcharge and manage them well.

Even better if you can buy something that looks a bit tatty and can be lightly refurbed to add a bit of value.

2 of mine were revalued significantly higher after very light refurbs (paint, new carpet, new tiles etc), this enabled me to refinance and move that cash into other projects.

trowelhead

1,867 posts

120 months

Thursday 2nd February 2017
quotequote all
drainbrain said:
Jerry Can said:
fk me! Really? It's unregulated
Regulation doesn't inspire me with confidence and is of no interest to me at all.

But I like their project (very much) and because of it's high likelihood of being carried through successfully I'd invest in it, and will.

Perhaps naively, my 'assessment of risk' centres entirely on profitability. Simply put, will the project succeed or fail financially?

I'd give it a >95% chance of success.

By that yardstick, whether or not it's regulated matters not a toot.
DB - have you looked at P2P such as saving stream etc?

drainbrain

5,637 posts

110 months

Thursday 2nd February 2017
quotequote all
trowelhead said:
DB - have you looked at P2P such as saving stream etc?
I've recently started looking at these things a bit more seriously but not with any insight or expertise. Just as a general net caster in the search for income producing investments. What I'm currently thinking about is buying into a bridging firm as a cash-only interest. But nothing set in stone. Perhaps in a while (2018?) I'll put a bit here and a bit there into a few different things including p2p.

I like Dolphin for a few reasons. One is that I've got a Berlin involvement, including a current on the table project to develop 2 1xbed flats in a large attic space there.Over the last 10 years the capital gain in Berlin has been huge. But so is their CGT at 40%!!! But I'm due a 'turn' - a big one - probably towards the end of this year or beginning of next at which point I'll be looking for a non-property investment.

Sadly, there's a chance it'll end up in commercial property tho. But that's just the sad bd in me talking.

Mark Benson

7,498 posts

268 months

Friday 3rd February 2017
quotequote all
trowelhead said:
lewisf182 said:
Flats at around £80k I think are the best property for rental income, capital gains perhaps no but if you buy right it just might work on both fronts.
I think i would have to agree with you there.

I'd add - Flats at around 80k, under 1 mile from major city centre (Mcr, Lpool, Bham, Leeds etc)

Rents around £500-600 pcm. Get something relatively modern with good management company, and reasonable service charges. Pretty hassle free and decent yields. Ex LHA can work well as on the whole they do not overcharge and manage them well.

Even better if you can buy something that looks a bit tatty and can be lightly refurbed to add a bit of value.

2 of mine were revalued significantly higher after very light refurbs (paint, new carpet, new tiles etc), this enabled me to refinance and move that cash into other projects.
For us it's been 1 bed 'quarterhouses', they were popular in the 80a and early 90s, 4 houses built in a single block.

They cost little more than a flat (ours were £80-£100k in West Swindon in the mid-2000s, comparable 'off-plan' 1 bed flats were being sold for around the same) but they rent for around £100pcm more as tenants get a front door and a bit of garden as well as a parking space outside their house.

Currently selling for £140k or thereabouts if in decent nick, the flats that were being sold at the same time still hanging about at £110k.