making money from property!!

rizla01

Elliot. It's simple.

Would you buy a wreck now, for 150k with the chance that you could re-furb it at cost of 25k taking 10 weeks for it to then be worth 150k.

THAT is a very likely scenario.

Oh, and ALSO, nobody can get a mortgage for that 150k so you are stuck with it, losing the interest that 150k could be giving you month on month.

Wait till you know what the market is doing unless you are prepared to gamble with that 70k, in which case the bookies would offer better odds on a daily basis.

teabelly

Right now the only sensible way to make money in property is over the long term. Use half of the 70k for deposits on 2 properties in strong rental areas that you know and have a connection with. Buy as cheaply as you can (25%+ below *current* market value) so look at auctions and repossessions. Find ones that don't need much work so you can basically clean them and push them straight out to rent. Out of area auctions are the best place to get bargains eg auction in London and loads of property in Manchester. Leave the other 35k in the bank. Put some in high interest isas and leave the rest to cover costs eg voids, repairs, insurance, purchase costs etc. Find a good agent to look after them. Sit back and wait. In 10-15 years prices will have risen. Contrary to what many say, properties are still selling. Talking to an EA this week and none sold last week but they shifted 7 this week. If they are priced that rents stack then they sell. You can get a mortgage if you have a decent credit history and a reasonable deposit. Generally rental purchases should be under 100k to work with current rents. Affordability in most areas stops around 600 pcm. Most people look in the 300-500 bracket.

First mortgage you take out you should probably fix for 5 years on a decent rate as you don't want to have to remortgage in the short term as prices could dip below even the discounted price you will pay if you are unlucky.

rizla01

Hi Teabelly.

Agree with those comments but in reallity what price prop are you going to get with £17.5k down X 2?

2 beds are usually the best investment and they dont come up for a lot less than 90k in the south.

Ian_Griffiths_Halifax

elliotskeeper, I'd keep hold of the money until people are able to get mortgages again. Give it 9 to 12 months and you could be in a good position to buy some decent priced houses and people will be able to buy them.

teabelly

If you get a deep enough discount then you won't get a price drop as what you have bought will always be worth more than what you paid. If it isn't you just hang on and wait until it is again. Negative equity is only a problem if you have to sell or remortgage. If you don't do either it doesn't really matter what prices are doing which is why you don't sink all your capital into deposits. All drops are notional until you sell or refinance. You can always live in house, you can't live in an ISA.

With first direct dropping their rates it is a sign that the banks are out to make money again as their shareholders won't let them sit in this sulk for much longer.

Leighthal

teabelly wrote: »

If you get a deep enough discount then you won't get a price drop as what you have bought will always be worth more than what you paid. If it isn't you just hang on and wait until it is again. Negative equity is only a problem if you have to sell or remortgage. If you don't do either it doesn't really matter what prices are doing which is why you don't sink all your capital into deposits. All drops are notional until you sell or refinance. You can always live in house, you can't live in an ISA.

With first direct dropping their rates it is a sign that the banks are out to make money again as their shareholders won't let them sit in this sulk for much longer.

Loved that.:T

Bf109

teabelly wrote: »

With first direct dropping their rates it is a sign that the banks are out to make money again as their shareholders won't let them sit in this sulk for much longer.

:rolleyes:

My god, a genuine victim of the in house drive-by.

Sure, its a low rate. Go look at the fees then come and tell me how low it really is.



Just victims of the in-house drive-by
They say jump, you say how high

lisaloo1977

Elliot,

My opinion for what it is worth. Properties are out there to be had, but most will need to be held on to for a unknown period of time to see any worthwhile return on your money. As others have said, if you do it up and rent it whilst waiting for the upturn, you run the risk of all your hard work being undone by one bad person. You also have to consider your ability to meet mortgage payments during void periods, and then all the other things that can go wrong to budget for, and in the best of worlds things never run totally hassle free.

People are still buying houses, i know from personal experience it is a very good time to buy, if as someone else said you can and you dare. We have completed on several properties within the last week and have a notice of intent in a newspaper on another. All of them have been repo's, all of them from people who wanted to play at being a landlord or property developer because the Tv made it look easy.

Its hard as i firmly believe that money can be made, i just do not know if i am seeing it from my point of view only. Its almost a case of the ship came in, it sailed away and you missed the boat, but a big hole in the side is requiring it to return to shore and if you want to risk it you can hop on.

I am on, but i was on before it sailed the first time. Would i tell you to jump on? I honestly can't answer that question, only you know how brave or how long you are able to ride things out if that boat ends up stuck in dry dock for a while!!


For the record, i do not do up properties and sell them on, nor have i ever.

BettiePage

At the moment I don't think it's worth the risk of losing your childrens inheritance. Wait at least 6 months and do plenty of research in the meantime. It could be as long as 5-10 years before it becomes financially worth it.

GDB2222

dys wrote: »

I fear that you have watched too many property !!!!!! TV shows.... "Renovations" (I use that term loosely) generally over the last decade have not added value, what has added value is house price inflation.

I think this is exactly right. Whenever I watch the property pron shows, and they end up saying 'over 38 weeks of renovations the price has gone up 17%' (or whatever), I mentally subtract the effect of house price inflation from that, and there's usually not a lot left for all the work and expenditure.

Buying a house at the moment, you are swimming against the current of falling house prices. In fact, it's more like trying to swim up a waterfall at the moment.

I think it must be possible to make some money out of renovation, but I suspect that once you strip out the effect of house price inflation you are just getting a reward for the many hours of work you are putting in. You might get the same reward from being a decorator or builder without anything like the same risk.