Sell my propery - rent - but buy to let with proceeds.

Thrugelmir

1957999 wrote: »

But I would be paying cash for the properties.

Thanks

My oversight.

getmore4less

1957999 wrote: »

Give or takea little either way, I would probably take about £100.000 from selling this place once I had paid all the expenses etc.

Where I would be looking to buy I could get two 3 bedroomed terraces for about £30.000 each, plus fees - that is a rough guide, but two properties are certainly obtainable for about £75.000.

What would be the rental income be from these £30-£40k properties?

1957999

getmore4less wrote: »

What would be the rental income be from these £30-£40k properties?

The weekly rent in the area I am looking to purchase is £75 a week (they cover all other costs) so if I had 2 properties with 3 bedrooms each that would be £21600 a year - there is a high demand for student rental properties.

I know that there will be times a room becomes vacant, or someone skips paying the rent, so if I say £19000 a year that should give me a cushion.

That would more than cover my rent, allow money in the pot for repairs and all other expenses, what was left over could be left (my family do this) and maybe go towards another property x amount of years down the line.

I would not be looking to take my living costs from the rental properties - only cover my rental.

Thanks

getmore4less

£75pw is gross yield of over 10% and upto 13% on £30k which is relatively high these days.

I would look very closely at why these places are not getting snapped up by the pro landlords they must have their reasons.

Thrugelmir

getmore4less wrote: »

£75pw is gross yield of over 10% and upto 13% on £30k which is relatively high these days.

I would look very closely at why these places are not getting snapped up by the pro landlords they must have their reasons.

The gross income suggested per house is £9,500. On a purchase price of £37,500 thats still a gross yield of 25%.

To good to be true......?

Jenniefour

Have you considered other alternatives for taking care of the money from your sale? I think you are taking an awful lot of risk in todays property market, especially as you would be first timer landlord.

Conrad

Jenniefour wrote: »

Have you considered other alternatives for taking care of the money from your sale? I think you are taking an awful lot of risk in todays property market, especially as you would be first timer landlord.

The time to buy is when there is uncertainty and economic strife - not when things are rosy and prices higher.

B2L is perfectly safe if done correctly.

OP, I'd consider HMO's as the rent is higher. If you do it properly and make the property suitable fo high quality tenants that only want a room (plenty of these people - money savers), your'e return can be substantially higher.

I know people who do this. They fully renovate the property to a high modern neutral standard and install wifi and other conveiniences to attract the right room only tenants. No voids and no arrears if you do it professionaly. Don't use lace curtains, brass, frilly things or patterns - keep it modern, clean and plain but comfortable. 'Echo' themes all through. So for example if the door is nice plain wood (not oranage stained - ronseal style), then the windows frames and ledges and fence etc shoudl all match exactly. If the window handles are brushed (not shiney of course - very 90's) steel, then the sockets, door handles, locks and carpet thresholds should exactly match. It's deatils like this that lend to a professional well thought out presenation.

1957999

What else is there that would give me those kind of figures to invest in?

There is nothing wrong with the properties, this is the price that houses liked I outlined, go for in this area - there is just a lot of them, so the prices remain low. it has always been so, for the last 15 years anyway.

The down side is, they will not rise in value much.

The only thing I would be a novice at, would the being a 'landlord', I have contacts with most the trades people if and when needed, my family are all ready in property rental - so it is not new to me in that aspect.

I have lived on my own for x amount of years, so I am not unfamilair with repairs and costs etc etc.
I know what to look for........plus I would take someone with me, a local builder (who has holiday rentals) when viewing, so there is no way I would buy a heap of falling down rubbish.

Thanks

Conrad

I myself am trying to get another B2L right now - it's a great time to buy, rents are high and demand increasing in the current economic landscape.

The other area I'm investing in right now is Bank shares as they were valued far higher before the crunch. Again classic investing theroy is to buy when there's blood on the streets as long as the business is sound. IMO no further UK Banks will fail - they would have failed already if they were going to, and there are too many vested interests. Furthermore Bank spreads have never been higher - that is, lending has never been so profitable. I also expect good dividend income from them. Banks are pilling on cash to thier bottom lines.

If you do buy Bank shares, spread the investment between say 3 or 4 Banks. I went for Barclays and RBS so far.

Many people who say don't invest now, do not examine the landscape properly - they simply work off of headlines such as 'spending cuts = bad' - but in this example ALL we are doing is cutting Govt expenditure to 2007 level - was is sooo bad then with those levels of spending - no!

Also the Govt sector redundacies are spread over years and furthermore, private sector employment is growing.

IGNORE NOISE, examine landscapes.

1957999

Conrad wrote: »

The time to buy is when there is uncertainty and economic strife - not when things are rosy and prices higher.

B2L is perfectly safe if done correctly.

OP, I'd consider HMO's as the rent is higher. If you do it properly and make the property suitable fo high quality tenants that only want a room (plenty of these people - money savers), your'e return can be substantially higher.

I know people who do this. They fully renovate the property to a high modern neutral standard and install wifi and other conveiniences to attract the right room only tenants. No voids and no arrears if you do it professionaly. Don't use lace curtains, brass, frilly things or patterns - keep it modern, clean and plain but comfortable. 'Echo' themes all through. So for example if the door is nice plain wood (not oranage stained - ronseal style), then the windows frames and ledges and fence etc shoudl all match exactly. If the window handles are brushed (not shiney of course - very 90's) steel, then the sockets, door handles, locks and carpet thresholds should exactly match. It's deatils like this that lend to a professional well thought out presenation.

My intention is not to go into the high end of the rental market, simply because I cannot afford it, and there is nothing worse than attempting this, and ending up cutting corners - no one ends up winning.....

I have been around what you outline and they are stunning, and command high returns, (as they should).

For want of a better phrase I am going for the bargain basement design, clean, safe but if the students mess it up, then its cheap to put right - plus there is also a buoyant market for this type of let in this area - which seems a safer bet to me, and less total rental revenue to loose, if a few hick ups happen along the way.

Thanks

Maybe one day I can do the designer pad.......I would love to, as I like taking old furniture and redesigning it, being able to be creative is fantastic.