A safe property investment in East London??

lynzpower

http://www.thisismottingham.co.uk/

lynzpower

jonny_rat wrote:

Thanks again Lynz! Again, more food for thought. I plan on talking to a mortgage dude this weekend (as well as an IFA in the near future) to sort out my budget, then I think I'll start looking at some places on a sort-of casual basis.. I really need to get some hands-on research in the areas you mentioned I think.

One other question though. All questions of whether the East is 'worth it' aside, what do you reckon to future prospects? I'm scared of prices dropping, and landing myself and my parents in it. I know a decision like this is always going to be a gamble, but still..?

this is the risk of property mate innit. I have my own personal opinions.
Dont waste your money on an IFA is my opinion what you need is an all of market broker.

What I will say is will you be able to afford the place witohut a lodger- only you know this. I fell into the trap of it, and when lodgers leave, it can leave you up the proverbial creek.

RHemmings

lynzpower wrote:

this is the risk of property mate innit. I have my own personal opinions.
Dont waste your money on an IFA is my opinion what you need is an all of market broker.

What I will say is will you be able to afford the place witohut a lodger- only you know this. I fell into the trap of it, and when lodgers leave, it can leave you up the proverbial creek.

Would it be intrusive to ask for more details of your experience? Was it hard to find a lodger?

jonny_rat

lynzpower wrote:

this is the risk of property mate innit. I have my own personal opinions.
Dont waste your money on an IFA is my opinion what you need is an all of market broker.

What I will say is will you be able to afford the place witohut a lodger- only you know this. I fell into the trap of it, and when lodgers leave, it can leave you up the proverbial creek.

Good point. I'd be assuming that I'd have someone in to stay for, what, 95% of the time? That's what I'd budget for anyway. As the poster above asked, if you'd be willing to share..

Before I entered a plan like this, I'd also want to do a comprehensive review of ads for rent in a given area. If the price is competitive, can't be too hard getting someone in? Gulp..
Another positive is that I've got student exemption from ctax for 3 years; if I'm the sole owner, I'd plan to pass that saving on as a bonus to potential lodgers..

Edit: aren't IFAs free? (or as good as free, receiving a commission off.. the mortgage lender, is it?)

Bargain_Rzl

If you had another adult living with you (i.e. a lodger) who was not council tax exempt, the property would only be liable for a 25% reduction in council tax, not full exemption. Council tax is based on the occupancy of the property, not the owenership, and your personal exemption does not exempt your property completely.

Edit: of course if you took in another student as a lodger, you'd still be exempt.

jonny_rat

Bargain_Rzl wrote:

If you had another adult living with you (i.e. a lodger) who was not council tax exempt, the property would only be liable for a 25% reduction in council tax, not full exemption. Council tax is based on the occupancy of the property, not the owenership, and your personal exemption does not exempt your property completely.

Edit: of course if you took in another student as a lodger, you'd still be exempt.

Balls. I didn't know that. I always thought it was based on the status of the person(s) with the 'legal' connection to the property (I've had that issue come up in student houses before). Ta!

dunstonh

Dont waste your money on an IFA is my opinion what you need is an all of market broker.

??? An IFA transacting in mortgages is whole of market.

Edit: aren't IFAs free? (or as good as free, receiving a commission off.. the mortgage lender, is it?)

You can choose from fee based or commission. Some IFAs are fee only but they wouldnt be targetting you as a client.

It should be noted that there is no such thing as a safe mortgaged property investment. Borrowing to invest is a higher risk transaction and you should take note of the risks you are taking as well as the potential benefits. Look at the pros and cons and the consequences of these. Go into it with your eyes open and not blinkered like most amateur mortgage buy to lets.

lynzpower

Sorry, just away for a bit

I had friends lodge with me. ther first was fine, one of my best mates, moved in with BF, the second came back from travelling same week and moved in immieidatley, so fine. She was always considering a move back to her home town which she did straight after Xmas, leaving me without a lodger for a few months. Saying that I was pretty picky, most of the people I spoke to over the phone were weirdos, and plenty of people never claled back to arrange appointments or what have you. Its just hard work finding a lodger. We did get someone else i a new freind of mine, who turned out to be an absoute NIGHTMARE she left after 8 weeks, which was way too long

I can cope as my partner lives with me, but alone, NO chance.

jonny_rat

dunstonh wrote:

??? An IFA transacting in mortgages is whole of market.

You can choose from fee based or commission. Some IFAs are fee only but they wouldnt be targetting you as a client.

It should be noted that there is no such thing as a safe mortgaged property investment. Borrowing to invest is a higher risk transaction and you should take note of the risks you are taking as well as the potential benefits. Look at the pros and cons and the consequences of these. Go into it with your eyes open and not blinkered like most amateur mortgage buy to lets.

I'm doing my best.
Key thing at this stage seems to not rush in, and do the research; examine the area, examine the prospects, get a right thorough valuation done.. sounds obvious enough, but all the nightmare stories I've heard in the past sound like they could have been avoided with a bit of time. Still a scary (and overwhelming) business though; I'm not discounting the possibility that an IFA might not just tell me that's a bad idea all round for me at the moment. Just wondering whether this area was generally seen a 'dangerous' place to invest in, I suppose.

lynzpower

I think its always risk isnt it.

As long as you dont by something thats chronically overpriced, and you can afford to live in it if negative equity does hit home( especially if this neg equity might affect your lodger, and thus your ability to stay) you should be OK