Advice on 2nd Property Purchase - is it still a good investment ?

Jorgan_2

Mike, to give you an idea, some lenders will no longer lend on new build apartments because they feel the market is saturated & they feel the proeprties will not provide suitable security against loans.

You won't find a bargain sitting on the sidelines. If you do your research it is possible to find the right property for you.

itsakidsworld

Mike,

don't give up just because you have had some negative feedback!! You are beaten before you have started so come one, keep looking.

As posted apartments are not a good investment as when the tide turns, these are the last to sell.

A good two bedroom terrace in a good location will always work in your favour so do your research on transport, schools, shops, etc.

The property market has gone crazy and always will so it is a case of how comfortable do you feel when you want to invest?

Porperty investing is simply a way of saving for your future pension. It is hoped that in 20-25 years you have made enough equity to have a nice nest egg. Nothing wrong with that and it works like that the world over. So ask yourself, how much a month would you or are you investing in a current pension plan? Add this amount to your monthly budget and if it stacks up then go for it. Over the years you will invest less in your pension fund by buying a house that you would if you had a private pension.

Calcualte the cost over say fifteen years and you will see that property always has and always will be a good sound investment.

ginger_nuts

if you go for BTL you must register with the TAX office within 3 months .
I waited 12 months because
1 i didnt have any profit,
2 I didnt no I had to register within 3 months .
I an now liable for a fine up to £100 .But I still didnt have any tax to pay .

stphnstevey

Ginger - could you elaborate on these rules please.

mystic_trev

mikeyw wrote:

In terms of paying off the mortgage sooner wouldn't an appreciating property give me more benefit than saving a couple of years interest on the mortgage ?

What about a depreciating property? I've been in the BTL market for 10 years and am now selling up. Yields are too low and there are (other) better investment opportunities. The upside looks small, the downside big. A load of people sucked in by the hope of BTL riches are going to be stuffed in the next few years. All IMVHO

ginger_nuts

stphnstevey wrote:

Ginger - could you elaborate on these rules please.

ok I bought a BTL in May 2005 .
I went to an accountant in May 2006 to sort out any tax .
I had to register as self employed for tax office .

Because of set up cost and mortgage interest I didnt have to pay tax .But because I didnt register with the tax office within 3 months off becoming self employed I am liable for a fine off up to £100 .My accountant is trying to get this sum reduced . I already pay tax for my employment under PAYE .

stphnstevey

Hi Ginger

So you got fined for not registering being self employed, not for not registering a BTL?

mikeyw

mystic_trev wrote:

What about a depreciating property? I've been in the BTL market for 10 years and am now selling up. Yields are too low and there are (other) better investment opportunities. The upside looks small, the downside big. A load of people sucked in by the hope of BTL riches are going to be stuffed in the next few years. All IMVHO

Trev - what do you feel offers better value at the moment for an investment ?

If the Market is about to pop I can't believe the Express are been allowed to run Weekly front page articles on the boom continuing with prices doubling again in the next 5 years !!....what is it with The Express and property prices ?....have they a huge portfolio of property ?

UK007BullDog

I am currently doing the same thing.

I have released some equity in my house and also cashed in some funds and other investments and I am just buying in places that were just advised of public spending increases to develop the areas.

I have a few Estate agents who will let me know when something suitable comes up.

I have also spent about £200 on books (not magazines) to read up on being a BTL landlord, the buying process, how to make a profit or at least not a loss, tax solutions etc. I am going in with eyes wide open.

Why am I doing it?

1. Expecially here in London there is not enough housing. In the last few years (cannot remember the exact number of years) here in London the population has increased by 1 million plus people. They have to live somewhere! Some are foreigners and cannot buy due to various reasons, the councils do not have enough stock either.

2. Its to help my kids have a roof over their heads and I expect them to pay the mortgage.

3. I will try to do it repayment wise and not interest only, so to cut down the loan and profit from the property value going up.

4. It will be an additional income when I am a pensioner.

Went round pretending wanting to rent in the more upmarket areas and there is not enough properties available. That is where I will buy.

If you are in it for the long run you just cannot fail. There are cycles of up and down but it has always recovered. Also people have learned from the last housing crash. I know a guy who bought anything and every thing at that time, speculating and he is now a property owner of so many properties that he is actually a lettings company himself and he has created a maintenance company. He is employing over 20 staff full and part time. So it can be done. But you must make sure you do not jeopardise your main home when releasing the equity.

Also remember you have costs coming your way theat need to be covered like building insurances or leases, ground rent, management fees if you dont want to manage the property yourself, etc. Also when you buy it you might have to renovate or redecorate in the first month so no rent coming in.

Research your areas well, start off where you live, pretend to be a tennant and ask for the going rentals in the area for all types of properties. Then find a good mortgage broker who can help you do the sums and find the best deal for you. I personally would also put more money down than the standard 15%, just to give you more breathing room with the rental calculations.

Good Luck!

F_T_Buyer

PoorDave wrote:

Why do i still bother to read these things?!

I know how people feel about it.

But why would people warn about the dangers of playing on the train track, they never listen after all.