Buy to let, any experience?
Discussion
I'm considering investing in residential properties, having jacked in my private pension scheme bacause its performance was abysmal. I have some experience with letting out commercial property but naff-all in terms of residential. Does anyone have any experience in this? Things like:
Where's the best location (close to the center of town or away from town, for example)?
How many bedrooms will gve me the optimum return (I'm thinking two or three)?
Is it best to use an agency or let direct? (Pros and cons of both).
Which is most "lettable", house, maisonette, flat, etc..?
Furnished or unfurnished?
Who pays the local rates? I'm guessing the tennant?
What are the hidden pitfalls?
Etc.. etc..
Where's the best location (close to the center of town or away from town, for example)?
How many bedrooms will gve me the optimum return (I'm thinking two or three)?
Is it best to use an agency or let direct? (Pros and cons of both).
Which is most "lettable", house, maisonette, flat, etc..?
Furnished or unfurnished?
Who pays the local rates? I'm guessing the tennant?
What are the hidden pitfalls?
Etc.. etc..
No direct experience but student houses seemed to be a lucrative market. You can get away with turning living room and upstair bathroom into bedrooms and sticking on a crappy lean-to bathroom in the back garden. Then don't do anything to the house except for emergency repairs for the entire time you've got it. Bonus points availilbe for 30 year old furniture that smells of dog.
Meanwhile you can extract £200pcm each from the students. Nice one.
Meanwhile you can extract £200pcm each from the students. Nice one.
You'll find that it is very different from commercial letting.
My limited experience of commercial is that the tenant pays for near enough everything - maintenance, insurance, services, rates, legal fees, etc.
In residential lettings you're responsible for far more, with maintenance being the biggest pain in the arse (tenants ringing you at all hours saying there is water coming through the ceiling in the kitchen because some dozy bint has showered with the shower curtain hanging outside of the bath, as a real example).
In short, there is far more effort on your part involved in residential.
My limited experience of commercial is that the tenant pays for near enough everything - maintenance, insurance, services, rates, legal fees, etc.
In residential lettings you're responsible for far more, with maintenance being the biggest pain in the arse (tenants ringing you at all hours saying there is water coming through the ceiling in the kitchen because some dozy bint has showered with the shower curtain hanging outside of the bath, as a real example).
In short, there is far more effort on your part involved in residential.
dieseljohn said:Downside is that they often trash the place and you have to redecorate and recarpet annually (or biennially if you're lucky)
No direct experience but student houses seemed to be a lucrative market. You can get away with turning living room and upstair bathroom into bedrooms and sticking on a crappy lean-to bathroom in the back garden. Then don't do anything to the house except for emergency repairs for the entire time you've got it. Bonus points availilbe for 30 year old furniture that smells of dog.
Buy To Let is returning very low yields at the moment because of the housing market. Most advisers are saying to give it a few years.
Re the pensions thing: This refers to a Self Invested Personal Pension (SIPP) in property. Next year "A-Day" is happening. It's allegedly the biggest pensions reform ever. I would recommed you get down to your IFA to talk about property SIPPs.
Look at www.i-sipp.co.uk
Cheers
James
Re the pensions thing: This refers to a Self Invested Personal Pension (SIPP) in property. Next year "A-Day" is happening. It's allegedly the biggest pensions reform ever. I would recommed you get down to your IFA to talk about property SIPPs.
Look at www.i-sipp.co.uk
Cheers
James
JonRB said:
No direct experience but student houses seemed to be a lucrative market. You can get away with turning living room and upstair bathroom into bedrooms and sticking on a crappy lean-to bathroom in the back garden. Then don't do anything to the house except for emergency repairs for the entire time you've got it. Bonus points availilbe for 30 year old furniture that smells of dog.
Downside is that they often trash the place and you have to redecorate and recarpet annually (or biennially if you're lucky)
We must have been very well behaved then because I lived in many houses where the carpet was older than I was. I take your point though.
JonRB said:
dieseljohn said:
No direct experience but student houses seemed to be a lucrative market. You can get away with turning living room and upstair bathroom into bedrooms and sticking on a crappy lean-to bathroom in the back garden. Then don't do anything to the house except for emergency repairs for the entire time you've got it. Bonus points availilbe for 30 year old furniture that smells of dog.
Downside is that they often trash the place and you have to redecorate and recarpet annually (or biennially if you're lucky)
>> Edited by princeperch on Tuesday 26th July 11:53
B17NNS said:
are you looking for capital growth (long term) or rental yield (short term)?
Both! With commercial, I get dcent returns (8%+) but mnimal capital gain in terms of the value of the property.
The ideal scenario is to buy commercial property, milk the rent for a few years and hope that one day the land can be sold as residential, with the Government's brown-field site policy.
You will need to research your area thoroughly - geographical differences abound.
Im in Staffordshire and I live in an area called Stone. Property prices are high for the region.
For instance a 2 bed terrace will sell for around £120k but will only return around £400 per month in rent.
Drive 8 miles north to Stoke however and in some areas a 2 bed terrace can be bought for £50k. Monthly rents are still about £300 PCM.
Yields in Stoke are still quite good however the capital growth there is minimal.
Yields in Stone are poor but we have seen about an 80% rise in house prices over the last 4 years.
Im in Staffordshire and I live in an area called Stone. Property prices are high for the region.
For instance a 2 bed terrace will sell for around £120k but will only return around £400 per month in rent.
Drive 8 miles north to Stoke however and in some areas a 2 bed terrace can be bought for £50k. Monthly rents are still about £300 PCM.
Yields in Stoke are still quite good however the capital growth there is minimal.
Yields in Stone are poor but we have seen about an 80% rise in house prices over the last 4 years.
Private sector buy-to-let no thank you hassle, hassle & more hassle.
How about a 'Private Landlord' Scheme with your local council
Thanks to Thatcher (god bless her) selling off all the local housing stock, local councils are very nearly always looking for short-term emergency letting.
Most councils even sub-out the letting to housing associations.
Whack the place in a SIPP (next year as mentioned)if you want the long term punt, Guarenteed rentals from 2-5 years (no empty periods), building is the HA's problem for the period of contract and they have to hand it back to you, in exactly the same state it was lent (obv. subject to wear and tear items)
no-brainer / no-risk
obv. when contr. period is up you have to re-submit the contract, but from experience, local councils cant get enough
(just be sure to check what 'type' of housing they need 1st, before you buy).
>> Edited by cinque on Tuesday 26th July 12:06
How about a 'Private Landlord' Scheme with your local council
Thanks to Thatcher (god bless her) selling off all the local housing stock, local councils are very nearly always looking for short-term emergency letting.
Most councils even sub-out the letting to housing associations.
Whack the place in a SIPP (next year as mentioned)if you want the long term punt, Guarenteed rentals from 2-5 years (no empty periods), building is the HA's problem for the period of contract and they have to hand it back to you, in exactly the same state it was lent (obv. subject to wear and tear items)
no-brainer / no-risk
obv. when contr. period is up you have to re-submit the contract, but from experience, local councils cant get enough
(just be sure to check what 'type' of housing they need 1st, before you buy).
>> Edited by cinque on Tuesday 26th July 12:06
cinque said:
Private sector buy-to-let no thank you hassle, hassle & more hassle.
How about a 'Private Landlord' Scheme with your local council
Thanks to Thatcher (god bless her) selling off all the local housing stock, local councils are very nearly always looking for short-term emergency letting.
Most councils even sub-out the letting to housing associations.
Whack the place in a SIPP (next year as mentioned)if you want the long term punt, Guarenteed rentals from 2-5 years (no empty periods), building is the HA's problem for the period of contract and they have to hand it back to you, in exactly the same state it was lent (obv. subject to wear and tear items)
no-brainer / no-risk
obv. when contr. period is up you have to re-submit the contract, but from experience, local councils cant get enough
(just be sure to check what 'type' of housing they need 1st, before you buy).
>> Edited by cinque on Tuesday 26th July 12:06
Yes, I like the sound of that! Emotionally it engages me, because all those pathetic Government hand-outs given to lazy Chavs - some of it (indirectly) will go back into my back pocket!!
princeperch said:
200 quid a month? I wish, think closer to 300 quid a month per person, in a shitty terrace house worth sub 200k in the ghetto of Reading, which is falling apart...(and this doesnt include any of the bills)
In Basingstoke your going to pay £300ish for a room and around 650-750 a month on a 2 bedroom house,i have a 2 bedroom with garage in a top position and i pay 750 pcm.
srebbe64 said:
Private sector buy-to-let no thank you hassle, hassle & more hassle.
How about a 'Private Landlord' Scheme with your local council
Thanks to Thatcher (god bless her) selling off all the local housing stock, local councils are very nearly always looking for short-term emergency letting.
Most councils even sub-out the letting to housing associations.
Whack the place in a SIPP (next year as mentioned)if you want the long term punt, Guarenteed rentals from 2-5 years (no empty periods), building is the HA's problem for the period of contract and they have to hand it back to you, in exactly the same state it was lent (obv. subject to wear and tear items)
no-brainer / no-risk
obv. when contr. period is up you have to re-submit the contract, but from experience, local councils cant get enough
(just be sure to check what 'type' of housing they need 1st, before you buy).
>> Edited by cinque on Tuesday 26th July 12:06
Yes, I like the sound of that! Emotionally it engages me, because all those pathetic Government hand-outs given to lazy Chavs - some of it (indirectly) will go back into my back pocket!!
Exactly why i did it
gives you a lovely warm feeling Most important point is to check what stock they are looking for 1st. This really is a no-brainer, the HA will often send out someone to 'evalutate' the rent for you, even if you havent actually purchased the place!!! If youre really friendly with the HA
they even give you the heads up early as to what they will and wont be considering over the next 5-10 years (if, like me, you have to consider every single detail before committing) good luck it really feels like one in the eye. ZR1cliff said:
princeperch said:
200 quid a month? I wish, think closer to 300 quid a month per person, in a shitty terrace house worth sub 200k in the ghetto of Reading, which is falling apart...(and this doesnt include any of the bills)
In Basingstoke your going to pay £300ish for a room and around 650-750 a month on a 2 bedroom house,i have a 2 bedroom with garage in a top position and i pay 750 pcm.
the rent is £1500/moth divided between 5 students ( the house was originally a 3 bed terrace but had some rooms converted on bottom floor...
why are you renting at that kind of money - surely a mortgage would be a better financial proposition?
>> Edited by princeperch on Tuesday 26th July 12:41
princeperch said:
princeperch said:
200 quid a month? I wish, think closer to 300 quid a month per person, in a shitty terrace house worth sub 200k in the ghetto of Reading, which is falling apart...(and this doesnt include any of the bills)
In Basingstoke your going to pay £300ish for a room and around 650-750 a month on a 2 bedroom house,i have a 2 bedroom with garage in a top position and i pay 750 pcm.
the rent is £1500/moth divided between 5 students ( the house was originally a 3 bed terrace but had some rooms converted on bottom floor...
why are you renting at that kind of money - surely a mortgage would be a better financial proposition?
>> Edited by princeperch on Tuesday 26th July 12:41
It was the 1st place to settle since divorce plus i just got to finish getting my engine back together,then i want to buy although it might be difficult at 47 starting again,but ile try all avenues,i rent thru an estate agent so hopefully when i come to looking for a mortgage my track record with them will help or maybe it will be wise to wait and see how the market goes??
in fact whilst theres some financially minded folk on this thread...
my mates and I have been thinking (maybe a pipe dream),would it be possible for students to buy a house together and rent it out?
Say:
£150,000 shit boggo standard student house.
3 of us put 5k in each, 15k total for deposit.
the few hundred quid rent from student tenants services the mortgage (even if this has to be guarenteed by the old man),
pipe dream or do-able?
my mates and I have been thinking (maybe a pipe dream),would it be possible for students to buy a house together and rent it out?
Say:
£150,000 shit boggo standard student house.
3 of us put 5k in each, 15k total for deposit.
the few hundred quid rent from student tenants services the mortgage (even if this has to be guarenteed by the old man),
pipe dream or do-able?
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