Making Money From Propery With £400k.
Discussion
Hi all,
Posting here as I'm going round in circles a bit and am hoping the vast experience of you guys might help focus me into a particular direction!
Short story - I'm 30, have about £400k of cash to invest in property and am looking for ideas of how best to use it to provide an income and/or capital growth.
Background - I've bought and sold 5 flats over the past 8 years or so, tending to buy repos, do them up and live in them for a bit before moving onto the next one. I haven't done one over the past 18 months though and am struggling to find anything similar with a solid margin. I'm not able to get a mortgage as I don't have a normal job or enough provable income (I work part time and invoice through my own company, with about £10k/year provable income). I seem to be going around in circles a bit between looking further afield (I live in Windsor where property is very expensive and repos etc hard to find) to find a decent project that would have a margin for re-sale, or investing in a number of BTLs in cheaper areas with better yields and trying to build a portfolio which provides a decent yearly income...though I'd have to use all of my cash and am unable to borrow at the moment (maybe I could if I bought them with the cash and could prove the income from them?).
Hoping that some of you might be able to provide some inspiration or strategies that i haven't thought of!
Cheers,
Dom
Posting here as I'm going round in circles a bit and am hoping the vast experience of you guys might help focus me into a particular direction!
Short story - I'm 30, have about £400k of cash to invest in property and am looking for ideas of how best to use it to provide an income and/or capital growth.
Background - I've bought and sold 5 flats over the past 8 years or so, tending to buy repos, do them up and live in them for a bit before moving onto the next one. I haven't done one over the past 18 months though and am struggling to find anything similar with a solid margin. I'm not able to get a mortgage as I don't have a normal job or enough provable income (I work part time and invoice through my own company, with about £10k/year provable income). I seem to be going around in circles a bit between looking further afield (I live in Windsor where property is very expensive and repos etc hard to find) to find a decent project that would have a margin for re-sale, or investing in a number of BTLs in cheaper areas with better yields and trying to build a portfolio which provides a decent yearly income...though I'd have to use all of my cash and am unable to borrow at the moment (maybe I could if I bought them with the cash and could prove the income from them?).
Hoping that some of you might be able to provide some inspiration or strategies that i haven't thought of!
Cheers,
Dom
I know you say you can't get a mortgage, but I have a guy I use for my clients who has managed to get clients mortgages with similar provable income
that said all I can suggest is to look further afield.
a lot of our clients are making money by buying vacant/distressed offices and converting them to flats under permitted development. there are easy ways to raise money for that.
that said all I can suggest is to look further afield.
a lot of our clients are making money by buying vacant/distressed offices and converting them to flats under permitted development. there are easy ways to raise money for that.
Not far from us in Cheshire you can get a 3 bedroom house in rentable condition for 65k. Decent deposit and the mortgage is £270 a month and returns £520 a month. Not a bad return. Always a few available and they sell to btl easily.
I think that as they’re mostly flat roofed it puts some off but direct line do landlord insurance that covers the roof as long as it’s inspected every 3 years.
I think that as they’re mostly flat roofed it puts some off but direct line do landlord insurance that covers the roof as long as it’s inspected every 3 years.
The number of UK BTL mortgages has crashed something like -70% in the past 2 years. With bigger taxes and tighter regulation, the golden era for renting is well and truly over.
You'd be much better served to invest the £400k in shares, like a Dow or FTSE tracker, leave it there for 30 years, and you are pretty much guaranteed to retire a millionaire.
Shares almost always beat property in every mid or long period for the past 150 years.
Get a day job at Tesco, etc.
You'd be much better served to invest the £400k in shares, like a Dow or FTSE tracker, leave it there for 30 years, and you are pretty much guaranteed to retire a millionaire.
Shares almost always beat property in every mid or long period for the past 150 years.
Get a day job at Tesco, etc.
Faz50 said:
Not far from us in Cheshire you can get a 3 bedroom house in rentable condition for 65k. Decent deposit and the mortgage is £270 a month and returns £520 a month. Not a bad return. Always a few available and they sell to btl easily.
I think that as they’re mostly flat roofed it puts some off but direct line do landlord insurance that covers the roof as long as it’s inspected every 3 years.
Do have a link for any of those?I think that as they’re mostly flat roofed it puts some off but direct line do landlord insurance that covers the roof as long as it’s inspected every 3 years.
227bhp said:
Do have a link for any of those?
Caesars Close, Castlefields, Runcornhttp://www.rightmove.co.uk/property-for-sale/prope...
Handforth Lane, Halton Lodge, Runcorn
http://www.rightmove.co.uk/property-for-sale/prope...
Apologies, linked from the Rightmove app but there’s always plenty of these about and no end of people who want to rent them.
No wonder your going round in circles the possibilities are endless. I think you have to go out of the area though.
As is the case with any investment the bigger the risk the higher the profits I’ve let at both ends of the market HMO’s to students who when they paid I made a lot of money circa £1000 a month off less than £100k property but they didn’t always pay and they trashed the house massive ballache.
Currently I let a nice 3 bed semi in a decent area with no hassle very easy to let and instead of the students wrecking the place the tenants tend to spend their own money improving their / my house I also get a few percent capital gain.
You could do HMO, appartments, slumlording, commercial property any combination of the above and in most major towns or cities bought outright. However you have probably considered these options yourself.
Personally I’d stick with the agent I currently have who take all the hassle out of letting get a nice family house bought outright returning say 600 a month I’d take a bit of a gamble on a HMO bought outright earning double that and keep £50-£100k in investments outside of property.
Oh and of course you can get a mortgage on the rental income how do you think people build up huge portfolios.
As is the case with any investment the bigger the risk the higher the profits I’ve let at both ends of the market HMO’s to students who when they paid I made a lot of money circa £1000 a month off less than £100k property but they didn’t always pay and they trashed the house massive ballache.
Currently I let a nice 3 bed semi in a decent area with no hassle very easy to let and instead of the students wrecking the place the tenants tend to spend their own money improving their / my house I also get a few percent capital gain.
You could do HMO, appartments, slumlording, commercial property any combination of the above and in most major towns or cities bought outright. However you have probably considered these options yourself.
Personally I’d stick with the agent I currently have who take all the hassle out of letting get a nice family house bought outright returning say 600 a month I’d take a bit of a gamble on a HMO bought outright earning double that and keep £50-£100k in investments outside of property.
Oh and of course you can get a mortgage on the rental income how do you think people build up huge portfolios.
Faz50 said:
227bhp said:
Do have a link for any of those?
Caesars Close, Castlefields, Runcornhttp://www.rightmove.co.uk/property-for-sale/prope...
Handforth Lane, Halton Lodge, Runcorn
http://www.rightmove.co.uk/property-for-sale/prope...
Apologies, linked from the Rightmove app but there’s always plenty of these about and no end of people who want to rent them.
caziques said:
Buy 600 acres of land in New Zealand, plant 175,000 pine trees, wait a few years, and then have an income of £45,000 a year from carbon credits.
Eventually harvest trees, for £2,500,000, and then sell the land for the equivalent of £250,000.
Trees take about 30 years to grow.
How much is the land and how much does it cost to buy/plant 175,000 trees out of interest?Eventually harvest trees, for £2,500,000, and then sell the land for the equivalent of £250,000.
Trees take about 30 years to grow.
Faz50 said:
Not far from us in Cheshire you can get a 3 bedroom house in rentable condition for 65k. Decent deposit and the mortgage is £270 a month and returns £520 a month. Not a bad return. Always a few available and they sell to btl easily.
I think that as they’re mostly flat roofed it puts some off but direct line do landlord insurance that covers the roof as long as it’s inspected every 3 years.
not quite correct. they will cover the house if the roof is inspected every 5 years...they don't offer a warranty on itI think that as they’re mostly flat roofed it puts some off but direct line do landlord insurance that covers the roof as long as it’s inspected every 3 years.
The problem is with places like Runcorn; the value of the property is unlikely to go up in any significant way over the short term. I think it’s good to stick to repossessions in desirable areas and city centres, if possible.
Regarding the French Alps; I luckily bought a place over there at the right time; when the exchange rate was the best it had been for a long time; as it happens I’ve not rented it out and just use it as a second home - but I do agree that with 400,000 you could buy a mega place, even considering the exchange rate - but buying abroad is a different kettle of fish and so you’ll have to be prepared. You’ll get massive rental income and with it being seasonal (ish) you’ll be able to go out and enjoy yourself. Avoid the already established ‘names’ like Chamonix - think outside the box and look at places like Samoëns. Or go for somewhere in the middle; Morzine or Les Gets, as examples; established names but still growing and properties going up in value. Just outside Morzine are places like Saint Jean D’Aulps; worth looking at.
I’d probably buy two 2 bed apartments in Manchester City centre; both with long leases / share of freehold and parking if possible. Rent them / sit on them for a couple years. You’ll get a decent return as Manchester is moving up nicely whilst the entry is still affordable. Apartments I’ve looked at have increased in value in the last year alone. Two years ago, I bought a place in Manchester City centre for £250,000 and it’s worth £340,000 now, just two years later.
The other option; buy a studio / 1 bed in a decent area of London. Can’t really go wrong, long term, with London. My fiancé bought a run down 3 bed many years back, in north London, for £330,000; did it up and it’s now worth three times what she paid for it.
£400,000 cash is a lovely budget to have to play with; that’s for sure!
Regarding the French Alps; I luckily bought a place over there at the right time; when the exchange rate was the best it had been for a long time; as it happens I’ve not rented it out and just use it as a second home - but I do agree that with 400,000 you could buy a mega place, even considering the exchange rate - but buying abroad is a different kettle of fish and so you’ll have to be prepared. You’ll get massive rental income and with it being seasonal (ish) you’ll be able to go out and enjoy yourself. Avoid the already established ‘names’ like Chamonix - think outside the box and look at places like Samoëns. Or go for somewhere in the middle; Morzine or Les Gets, as examples; established names but still growing and properties going up in value. Just outside Morzine are places like Saint Jean D’Aulps; worth looking at.
I’d probably buy two 2 bed apartments in Manchester City centre; both with long leases / share of freehold and parking if possible. Rent them / sit on them for a couple years. You’ll get a decent return as Manchester is moving up nicely whilst the entry is still affordable. Apartments I’ve looked at have increased in value in the last year alone. Two years ago, I bought a place in Manchester City centre for £250,000 and it’s worth £340,000 now, just two years later.
The other option; buy a studio / 1 bed in a decent area of London. Can’t really go wrong, long term, with London. My fiancé bought a run down 3 bed many years back, in north London, for £330,000; did it up and it’s now worth three times what she paid for it.
£400,000 cash is a lovely budget to have to play with; that’s for sure!
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