looking to buy to let for 1st time ; advice appreciated

bororooney

I've decided to invest my savings into property. I'm in my early 40's and have 35k+ in savings at my disposal . Never had any experience in buying property to rent out so I'm finding it very daunting. Everyone I speak to says its a buyers market (2011) and since I have no pension provisions I feel now might be the time to act. However there seems to be so many landlords out there is there room for another? Not sure what type of price range to aim for, tempted by a 40k terraced house aimed at students. Any advice, do & dont's would be greatly appreciated. Or should I invest elsewhere?

dopester

University students who now have to pay up to £9,000 a year uni fees. Fewer students? Less money for landlords from overstretched students/parents.

2011 a buyers market?

2012/13 the monsters come out to feed on your BTL buyers imo.
http://www.youtube.com/watch?v=8BRUzKFEG_0

Monsters like myself will show no mercy if you put your own home at risk through BTL debt.

SouthCoast

since I have no pension provisions

Putting all your eggs in one basket is not advised.

Marvel1

Before renting out, do some background research on the law and your responsibilities:
http://www.direct.gov.uk/en/HomeAndCommunity/Privaterenting/RentingOutYourProperty/index.htm

bororooney

Thanks. Getting more daunting by the second! I forgot to mention I am mortgage free and earn in excess of 50k+ after tax a year if that makes a difference to any advice gladly accepted.

Doozergirl

Little cheap terrace will give a good yield and they provide nice, flexible accommodation. Students will give an even better yield but as surprising as it might sound, you've probably already missed the boat for next year and if you miss it, you end up with an empty house for a whole year. No one else wants to live in Studentville.

But there are additional risks, costs and responsibilities involved in multi-room lets so I'd stick simple and just have a terrace that you could rent to a family, hopefully for the longer term. But still you need to understand your responsibilities and letting law so you treat people fairly and don't open yourself up to law suits.

Look at it for the long term, not something to be sold on, appreciate that it will be a job in itself and a PITA a lot of the time and keep it properly maintained to keep yourself with decent quality tenants. And make sure you can afford for it to be empty sometimes.

HAMISH_MCTAVISH

I'd suggest before investing, you read the "debate house prices" board for 6 months or so to learn about the wider issues likely to impact your investment over the next decade or two.

But beyond that, BTL can be a very good investment, or a total nightmare. The main thing to look at is the population and employment prospects in your local area. I wouldn't touch a cheap terrace in many towns in the North of England with a bargepole at the moment. But I'd quite happily buy a 2 bed flat near a good Uni in some parts of Scotland or the South East, or even a terrace or family house in areas with a good outlook.

In general terms, we do have a massive housing shortage, it's going to worsen over the next couple of decades, we have little to no chance of building enough new houses, and the biggest generation in history (bigger even than the boomers) is about to start reaching FTB age. The leading edge of this demographic bulge will start in 2012/13 and peak around 2020. It'll be 2028 before the number of FTB age buyers is as few as they are today again.

Compounding this issue, we are currently building less houses than at any time since 1923, and new starts are still falling, down 41% year on year. The supply and demand imbalance will get critical at some point, and prices will inevitably boom again. So as a long term investment, housing is likely to outperform most other things again in the next 25 years.

Now having said all that, house prices and rents in some areas will massively outperform other areas, and some areas will still do poorly as local population declines or employment moves elsewhere. And being a professional landlord is not something to be taken lightly, so it's important to do some pretty comprehensive research for 6-12 months to get as much information as possible.

ruggedtoast

HAMISH_MCTAVISH wrote: »

I'd suggest before investing, you read the "debate house prices" board for 6 months or so to learn about the wider issues likely to impact your investment over the next decade or two.

What? Not hunkering down with the FT or the Economist for a couple of days, or talking to a few IFA's or letting agents.

The Debate House Prices Board.

Really?

The last semi coherent debate there ended up with Julieq speculating insultingly about my wedding tackle and Graham ranting about horses.

Most of the rest of the threads there are articles you have copied and pasted from the Express.

HAMISH_MCTAVISH

ruggedtoast wrote: »

The last semi coherent debate there ended up with Julieq speculating insultingly about my wedding tackle and Graham ranting about horses.

No point getting the hump with the whole board just because you were spectacularly wrong about house prices.

Sure, there's a lot of nutty threads on a slow news day, but I guarantee if a newbie reads that board for 6 months they'll get a pretty comprehensive awareness of the big issues.

Population growth, housebuilding levels, bank funding levels, employment, regional variations, the history of house prices, rental yields, property cycles, etc.

Most of the rest of the threads there are articles you have copied and pasted from the Express.

Really? Then link to a single Express article I've posted in the last month. Just one will do.

Running_Horse

bororooney wrote: »

since I have no pension provisions I feel now might be the time to act.

If you have £35,000 in savings and earn over £50,000 a year, why don't you just set up a pension?

molit

my advice would be to talk to as many people in the face as possible...have a chat to lettng agents, and universities, basially its like any business transaction, work out who your market is, what risk you are willing to accept, how much work you are willing to do etc. Oh and accept you will make mistakes.

Couple of things to say - some peole think BTL landlords are the scourge of the world - ignore them. Secondly, keep receipts

I've now got two rental properties, as the signiture says by aciednt, so can let you know some of the pitfalls, and some of the tricks that you can pull legally. pm me if you want

Final thing, I'd say keep away from the debate house prices board - no offence to people who post on there, but th threads on there to my mind have no place on MSE, a lot of posters use it as an excuse to shout and insult other people, adding fact at the end of statements, as they think that is what debating is...