any buy to let landlords in
Discussion
louthepimp said:
basically i want to become a landlord with a few propertys under my belt so i can give up work by the time im 35
how much do i need to get started and say owning two properties by this time next year and another two each year after that
thanks
Build a time machine, go back to circa 2002.how much do i need to get started and say owning two properties by this time next year and another two each year after that
thanks
louthepimp said:
basically i want to become a landlord with a few propertys under my belt so i can give up work by the time im 35
how much do i need to get started and say owning two properties by this time next year and another two each year after that
thanks
Did you really just ask that?!?! how much do i need to get started and say owning two properties by this time next year and another two each year after that
thanks
I think what everyone is trying to say is yu need to have a little more info around this query.
How much do I need for 2 properties = How long is a piece of string.
Assuming you'll be looking for leverage then bear in mind that the likely max you'l get for a BTL is about 80% (yes, maybe 85% but don;t count n it) and realistically you get the better deals at 75%. Therefore, you'll need 25% of the asking price of the houses you are looking at.
My tip would be to buy bigger properties if possible. Te trouble with small flats is as soon as something, even small, goes wrong a modest extra expenditure really hits your yield. For example, if you have an £100k flat earning £600 p.m thats a yield of 7.2% gross which is ok (ish). If, however, the tenant says they need a new fridge, alarm or whatever and it costs, say £400 then your yield drops to 6.8%. God forbid you actually have some vacancy time as this would mean your yield gets shot to pieces.
With a bigger property, e.g. earning £2,000 per month, the cost of such expenditures makes a relatively smaller hit on your yield (but arguably you have more concentration risk..blah blah).
It's not the game it used to be though and in my opinion property prices will not rise and most likely fall over the next 3-5 years so I wouldn;t be planning tha retirement party for your 35th just yet...
How much do I need for 2 properties = How long is a piece of string.
Assuming you'll be looking for leverage then bear in mind that the likely max you'l get for a BTL is about 80% (yes, maybe 85% but don;t count n it) and realistically you get the better deals at 75%. Therefore, you'll need 25% of the asking price of the houses you are looking at.
My tip would be to buy bigger properties if possible. Te trouble with small flats is as soon as something, even small, goes wrong a modest extra expenditure really hits your yield. For example, if you have an £100k flat earning £600 p.m thats a yield of 7.2% gross which is ok (ish). If, however, the tenant says they need a new fridge, alarm or whatever and it costs, say £400 then your yield drops to 6.8%. God forbid you actually have some vacancy time as this would mean your yield gets shot to pieces.
With a bigger property, e.g. earning £2,000 per month, the cost of such expenditures makes a relatively smaller hit on your yield (but arguably you have more concentration risk..blah blah).
It's not the game it used to be though and in my opinion property prices will not rise and most likely fall over the next 3-5 years so I wouldn;t be planning tha retirement party for your 35th just yet...
groak said:
In my town the 'average' £100k flat would rent for about £550pcm. The average £20k flat would rent for about £350pcm.
If I was spending £100k on property, I'd buy 5 x £20k flats because I prefer grossing £1750pcm than £550pcm for my £100k.
Not everyone would agree.
Where the hell (less general than West Scotland) are you buying flats for £20k?!?! If I was spending £100k on property, I'd buy 5 x £20k flats because I prefer grossing £1750pcm than £550pcm for my £100k.
Not everyone would agree.
Cheers
The Moose
The Moose said:
Where the hell (less general than West Scotland) are you buying flats for £20k?!?!
Cheers
The Moose
How specific do you want?Cheers
The Moose
Most recently - last couple of months:
642 Balmore Rd 1/1 Lambhill G22....£5k
642 Balmore Rd 2/2 Lambhill G22....£10k
642 Balmore Rd 2/1 Lambhill G22....£15k
7 Dunphail Drive 0/2 Easterhouse G34......£17k
Went to look at one in Greenrigg Rd Cumbernauld on Monday at £17k but the close is such a sheetthole that I don't think I'll bother. Loads of them, to be honest. Small commercials too. Best one this year so far is a small shop in Springburn for £4k. Rented at £200pcm. Best in last couple of years is small shop in Aitken St Dennistoun (£2.5k). Currently rented at £300pcm. Got another small shop in my sights but I think the owner will try to get £7.5k out of me, and another absolute beauty in Dennistoun which'll rent for £100pw but will cost £20k. O and another largish (90sqm) one in Springfield Rd G31 but that one is £30k, though it'll easily do £150pw when it's cleaned up. Can't get enough of them tbh.
Edited by groak on Wednesday 6th July 00:11
hidetheelephants said:
A hellhole of scummers and druggies; nowhere even vaguely nice will have flats going for 20k. That's not to say you can't make money on such flats, but it'll be hard-earned.
Yeah yeah yeah. You're right. The reason I prefer these is that it's much more hassle and less profitable than spending the same money on nicer ones, albeit fewer of them. The Moose said:
Where the hell (less general than West Scotland) are you buying flats for £20k?!?!
Cheers
The Moose
Cheers
The Moose
groak said:
How specific do you want?
Most recently - last couple of months:
642 Balmore Rd 1/1 Lambhill G22....£5k
642 Balmore Rd 2/2 Lambhill G22....£10k
642 Balmore Rd 2/1 Lambhill G22....£15k
7 Dunphail Drive 0/2 Easterhouse G34......£17k
Seems to answer that one!Most recently - last couple of months:
642 Balmore Rd 1/1 Lambhill G22....£5k
642 Balmore Rd 2/2 Lambhill G22....£10k
642 Balmore Rd 2/1 Lambhill G22....£15k
7 Dunphail Drive 0/2 Easterhouse G34......£17k
groak said:
How specific do you want?
Most recently - last couple of months:
642 Balmore Rd 1/1 Lambhill G22....£5k
642 Balmore Rd 2/2 Lambhill G22....£10k
642 Balmore Rd 2/1 Lambhill G22....£15k
7 Dunphail Drive 0/2 Easterhouse G34......£17k
Went to look at one in Greenrigg Rd Cumbernauld on Monday at £17k but the close is such a sheetthole that I don't think I'll bother. Loads of them, to be honest. Small commercials too. Best one this year so far is a small shop in Springburn for £4k. Rented at £200pcm. Best in last couple of years is small shop in Aitken St Dennistoun (£2.5k). Currently rented at £300pcm. Got another small shop in my sights but I think the owner will try to get £7.5k out of me, and another absolute beauty in Dennistoun which'll rent for £100pw but will cost £20k. O and another largish (90sqm) one in Springfield Rd G31 but that one is £30k, though it'll easily do £150pw when it's cleaned up. Can't get enough of them tbh.
groak, your focus seems to be on monthly rental income.Most recently - last couple of months:
642 Balmore Rd 1/1 Lambhill G22....£5k
642 Balmore Rd 2/2 Lambhill G22....£10k
642 Balmore Rd 2/1 Lambhill G22....£15k
7 Dunphail Drive 0/2 Easterhouse G34......£17k
Went to look at one in Greenrigg Rd Cumbernauld on Monday at £17k but the close is such a sheetthole that I don't think I'll bother. Loads of them, to be honest. Small commercials too. Best one this year so far is a small shop in Springburn for £4k. Rented at £200pcm. Best in last couple of years is small shop in Aitken St Dennistoun (£2.5k). Currently rented at £300pcm. Got another small shop in my sights but I think the owner will try to get £7.5k out of me, and another absolute beauty in Dennistoun which'll rent for £100pw but will cost £20k. O and another largish (90sqm) one in Springfield Rd G31 but that one is £30k, though it'll easily do £150pw when it's cleaned up. Can't get enough of them tbh.
what about ongoing maintenance and large bills, those properties at that end of the market are likely to be needing a re-roof/new heating system or similar, most entering into the buy to let market for the first time want property that isn't going to hit them with a 4 figure bill any time soon, or that wipes out any potential profit for the forseeable future.
what is your exit strategy, a £5k property isn't likely to become a £50k property any day soon!
The cheap flats will probably be a good investment. The council will, more than likley, rent them off you for the local herion addicts/general scum bag chavs. People like that never change and will live in them for the rest of their lifes. Sorted 
Who said people like this are useless in the world?......
Who said people like this are useless in the world?......yellowbentines said:
groak, your focus seems to be on monthly rental income.
what about ongoing maintenance and large bills, those properties at that end of the market are likely to be needing a re-roof/new heating system or similar, most entering into the buy to let market for the first time want property that isn't going to hit them with a 4 figure bill any time soon, or that wipes out any potential profit for the forseeable future.
what is your exit strategy, a £5k property isn't likely to become a £50k property any day soon!
YB: Apartments are mostly in blocks with shared responsibility for common repairs. Most ultra cheap stock needs money spent on it. The £5k one above needed £10k. The £10k one needed nothing. And the £15k one needed about £250. The latter two were bought occupied by settled tenants. The one needing £10k is today tenanted, and shouldn't need any serious internal attention for some years. It is in very good order now, having been fully renovated. The building the 3 are in is not clever. I'm minded to spend a grand refreshing the common close. The building itself has had a structural problem. I've owned a couple of other properties in the building for around 20 years, and this problem has had no affect at all on tenancies there. Should this continue, it's possible my grandchildren will be letting it as I am today. Should the problem become serious enough to require the building evacuated, then it will be bought under compulsory purchase conditions by the local authority, and I would expect +/- 40k per unit. It is unlikely I'll effect the required structural repair as no-one is any the worse for the problem. what about ongoing maintenance and large bills, those properties at that end of the market are likely to be needing a re-roof/new heating system or similar, most entering into the buy to let market for the first time want property that isn't going to hit them with a 4 figure bill any time soon, or that wipes out any potential profit for the forseeable future.
what is your exit strategy, a £5k property isn't likely to become a £50k property any day soon!
These 3 flats net +/- £350pcm per unit from gross rent of £400pcm.
The Easterhouse property was severely flooded last winter with all the consequent damage that causes. I'd guess the owner wasn't insured, and the flood mess broke their heart and they couldn't face sorting it, so dumped it cheap. £4k will return it to very good condition, with few serious maintenance bills anticipated. The building is also in decent order, and we anticipate about £450pcm net from it.
The cheap shops have very low outgoings. Their gross is their net given that FRI tenancies remove most cost obligations from the landlord.
There is no exit strategy. These are bought to let. Mind you I am often offered decent profit to sell, but the super cheapos are almost always keepers.
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