New investor - £35-£40k advice please!

Mr.Brown_4

aliharris wrote: »

When you put it like that, it does sound ludicrous actually.. Are you suggesting that elsewhere in the UK you can rent a £250k property for more than £1000/month?

Thanks for input so far people :-)

No I'm suggesting that house prices and rental returns are out of step with each other. I'm suggesting that house prices are overvalued, and that 'investing' in the housing market at this point in time would be brave or foolish. I'm suggesting that you take some time to try to be an impartial observer of the housing market, the UK economy and what the likely direction is for say the next five years.

Doshwaster

Mr.Brown wrote: »

No I'm suggesting that house prices and rental returns are out of step with each other. I'm suggesting that house prices are overvalued, and that 'investing' in the housing market at this point in time would be brave or foolish. I'm suggesting that you take some time to try to be an impartial observer of the housing market, the UK economy and what the likely direction is for say the next five years.

That sounds sensible.

It seems to me that rents are very low at the moment so it's probably not the time to be investing in rented property. I recently saw a one-bed flat that I rented 10 years ago in the local paper - it has been totally redecorated with a new kitchen and bathroom but was only going for £50/month more than I paid 10 years ago.

The OP is in the extremely fortunate position to be young and with a good amount of cash available - but who knows what will happen in the next few years. Your early 20s are often the most eventful (for good and bad) of your life.

Fire_Fox

aliharris wrote: »

Another point.. how would it work if a parent applied for and got the mortgage using my money, would this mean I need less of a deposit/a parent will be a less risky mortgagee..?

Any thoughts much appreciated

You are far from the first person to have thought of this: some have even gone ahead and then come on here for advice when it all goes pear shaped. Run a search as already suggested - if you are going to be a BTL landlord there is a lot of research and reading to do.

jonewer

aliharris wrote: »

2. Buy to let flat/small house near home - 2 bed, approx. £250,000 - £900/month rent

You'd be lucky to cover the interest on the mortgage, let alone repayments, voids, license, safety checks, marketing, maintainance, insurance etc etc etc....

Stop watching location location, property ladder, homes under the hammer and all that other ludicrous daytime tv drivel.

Get yourself a job, find yourself a home.

Then look at how you can plan for your future.

theartfullodger

I’ve got very limited knowledge on mortgages, tax and HMO regs, so any info on that would be great!

.
Depends: What will interest rates do?? (No, I don't either...) but if they increase to levels seen last time shortly (within 7 months) of the Conservatives gaining power - 17% (seventeen per-cent) ....stayed above or around 10% for about 12 years ... so that 5-year fixed rate deal could be painful....

ONLY rent any property out if you can cope with the financial & emotional agrro of the "Tenant from hell" who you can't get out for 9 months whilst you keep paying the mortgage etc./ etc... and legal fees (to get him out) and then he 'phones you Saturday 10:22 pm "Toilet's bust wodja gonna do..." "Sorry to hear that dear sir, when did this start" "Wodja goona do... wodja gonna do - dunno 3-4 weeks maybe,.,.. wossat gorra do 'wiv it??" "OK, I'll get my man to call you Monday 1st thing..." "Nah, you gorra fix it nah..>""""


(PS Yes, you have a legal requirement to fix the gentleman's toilet, notwithstanding his not having paid you for 7 months,.....")

If you are not sure you can cope, find another business to go into...


& there are many other costs incurred when renting: And do your numbers only assuming you can rent for 10 or each 12 months.... (voids, tenants who don't pay/disappear... your needing the property for major repairs...). You will need a "buffer" of, say £10k for a rainy day (bad tenant, new roof, other major repair...)

As you appear to have limited knowledge in some areas, unless you know it all (I don't, been a LL for 10 years) on being a Landlord get booked on a "how to be a landlord" course with either NLA or RLA: Might save you thousands....e.g.

RLA Courses
Lettings for Landlords

Objectives

The aim of this course is to explain to Landlords their obligations in relation to their tenants and any agents they use, and vice-versa.

Course Content

Lettings is a minefield and legal understanding of the main issues is important. This course deals with the main areas that affect Landlords. The main topics covered are –

1. Tenancy types – important if you are buying a property with a tenant in place.
2. The condition of your property. If it is not up to scratch you can be sued and /or prosecuted.
3. Inventories. This is the evidence you rely on if you need to deduct from the tenants deposit. Fail to carry out an adequate Inventory and you will lose your case.
4. Periodic and Final check out Inspections. Practical advice about what you can and should do.
5. Getting and vetting tenants.
6. Possession proceedings, Notices and completing court forms.
7. The Law on harassment and Unlawful Eviction. This is a minefield for Landlords. The law is weighted against you. Do not let the tenant lure you into an expensive trap.

Cheers!

Lodger

(Apologies to other readers for posting this advice yet again...)