Buy to let - some beginner questions and advice needed

ognum

Darren
Maybe in other peoples eyes I am cautious buyer but I would not consider buying a rental property in a place that I do not know well I like to know the good areas and the bad areas Sometimes there can be subtle differences so a house two roads away can be a worse purchase than one on another road

I also will not buy a house in an area I would not ask my family to live in! That doesnt mean it has to be the best area in town but if its not safe enough for my family to walk the streets then I dont want a house there

I think your search should be centred on areas you know and can get to easily How do you plan to maintain a property which is moles away? I believe you either need to do the mainainance yourself or manage it yourself otherwise costs will spirral

So look in areas you know or areas you want to live if you are going to persue this dream personally I would not do it with the funds you have but maybe it will work if you have lots of luck!

Alias_Omega

DarrenRS wrote: »

So tell me where is the best location to do BTL on a budget of 100k - 120k?

My area, £120k buys you an ex-council house, on a council estate.


Sounds good, though your competing with council rent. So no more than £400 p/m (£95 p/w) if the house is tidy.


For your returns in your earlier posts, I would need a house of £180-200k.

real1314

DarrenRS wrote: »

So tell me where is the best location to do BTL on a budget of 100k - 120k?

BTL can be successul if :-

You know the qualities of the area you are buying in.
You know how to assess / judge potential tenants
You know how to pre-assess a property.

Without the above, you need to spend far too much on professionals to do this sort of checking for you.

Your attraction to burnley is based on nothing but the house price.
Have you ever been? Have you seen how many empty properties there are in burnley? Do you know how many "To Let" signs there are? How many boarded up properties there are?

4/5 years ago a friend from down south asked me if Openshaw was a good place to buy an investment in, as it was, at the time, the hottest property price rise area; 40% pa.
I took him for a drive round the place. He decided against.

What I had was knowledge of the area he was thinking of buying in.

If you go for the cheap hell-hole type places, you can make a good profit IF you get it let; IF you get the rent paid; IF you don't get a nightmare tenant; IF the property is still in one piece after the tenant leaves. IF it's worth more in 5 years than it is now. In burnley, what's £30k now could be £25k in 3 years, or even £20k, or £10k.
There are so many risks, you really sound totally unprepared for it.

Get something nearer to home, that you have some idea of the worth of if you really must go for BTL. Or just invest it somewhere safe?
You could go to a few decent sized auctions - that might put you off. If you're not intimidated, you aren't using your senses! :cool:

Werdnal

I think you would be far wiser using your cash to buy yourself a property, then taking in a lodger to share the costs.

You would have a foot on the property ladder and secure your own future accommodation - you say you rent at the moment, but LLs are often wary of unemployed tenants and as you are likely to need to apply for LHA if you are not earning enough to cover your rent, then you could find yourself receiving notice to leave anyway. Then, faced with having to declare your LHA status to any future landlord, you would find securing another rental property even more difficult, so you could infact become homeless. Why worry about getting a rental property when the roof over your head could be in serious jeopardy?

If you take a lodger, you would qualify for the "rent a room" scheme, allowing you benefit from lower tax on the rent you receive.

Lodgers have very little security of tenure, so you could give mimimum notice if you wanted someone to leave, and therefore not be saddled with difficult tenants, who don't pay, trash your property and refuse to leave. You also wouldn't have to worry about agency fees, maintenance, landlord insurance etc, so would cut the legislation and associated costs considerably - more money in your pocket and a lot less hassle!

I think this would be a lot better option for your own future security and generate a little income along the way.

DarrenRS

That is an option I have also thought about, though downside I guess is having to share home with 1 or more strange persons, though that is something I am well used to by now.

I need to find out if it is possible to rent a room out under the governments 'rent a room' scheme and still be able to claim unemployment benefit + council tax benefit (in a situation where I was unemployed)

Opinion

How long can a tenant stop paying rent before the whole court process to evict them has completed? It's a good few months, I think, and that'd mean zero income for you. Next thing you know you're posting here asking for advice on a quick-sale company offering you 60% of what you paid.

DarrenRS

Does anyone actually have anything GOOD to say about buy-to-let, because so far I have heard only negative views about it from people here.

It does make me wonder why I even bothered to post up questions about it in the first place.

poppysarah

Gleeful wrote: »

No need to be sarcastic. All I was saying was that someone looking for an 'easy' BTL should avoid places like that.

Wasn't being sarcastic.

The OP needs to look at what standards local councils want landlords to meet - and in deprived areas the rules might be stricter (which might be why large numbers of properties for sales in some areas)

DarrenRS wrote: »

So tell me where is the best location to do BTL on a budget of 100k - 120k?

Do you understand what you might have to do as a landlord?
Go fix something? Go find some proper workmen? Do inspections? Or were you planning on paying someone else to do that.

Put your money into a house for yourself and do what someone else has suggested - get a lodger. You can earn over £4k a year tax free from that.

poppysarah

DarrenRS wrote: »

Does anyone actually have anything GOOD to say about buy-to-let, because so far I have heard only negative views about it from people here.

It does make me wonder why I even bothered to post up questions about it in the first place.

Buy to let can work.

If you have researched the subject, have read up on housing law a little, got an idea of the responsibilities and requirements.
Done the research on the area you want to buy in.


http://www.rightmove.co.uk/property-for-sale/property-34954028.html
this sort of place will get you £450 a month rent.
Chadderton is full of places like this.
Some require very little work.


you need to realise though if you don't live in Chadderton then when the tenant says 'there is water leaking from the ceiling' you'd have to make that journey, or have a trusted person nearby to go and inspect and arrange workmen.

If the place is trashed by tenants, what money do you have to redec and repair etc?

You need to get the right tenants and the right house.

poppysarah

DarrenRS wrote: »

I need to find out if it is possible to rent a room out under the governments 'rent a room' scheme and still be able to claim unemployment benefit + council tax benefit (in a situation where I was unemployed)

It's tax free for the rent but the single person council tax discount is stopped if you have someone there but *you* might be able to claim a discount if you're skint.

There is a benefits section on MSE.

At the moment though you are working?

If you have the income from a BTL that is counted as taxable!