Is this a good time to put money into real estate?

Mistermeaner

Is this a good time to put money into real estate?

Maybe. It depends if prices and yields go up down or nowhere.

Gulash

Can you tell me please if a property has 800pcm how much could I expect to take home? Do tenants pay for service charges? For bills? For council tax? For ground rent? What are the costs to have a real estate company to manage my property? To arrange viewings, to have insurance for tenants not paying the rent and to have insurance for tenants breaking the property?

ognum

Management fee 7 a 12% depending on what you negotiate. You could do this yourself .

Service charges and ground rent paid by LL

Council tax and bills paid by tenant or LL if property empty

Buildings insurance usually with service charge if a flat.

Other insurances variable approx £200 pa paid by LL

Wear and tear and repairs, depends on property.

Gulash

Thanks! Is wear and tear and repairs covered in insurance?

Gulash

Can you tell me please if there are any other places to search for investment properties apart from zoopla and rightmove?

Running_Horse

All these questions can be answered by using Google. There have even been books written on the subject. You can even find advice on your other question about finding a girlfriend in Essex.

Generali

No, wear and tear isn't covered by insurance as it's a predictable event. You can't insure for predictable events and anyway it would be pointless.

There is no difference between an investment property and any other sort so basically all places that sell homes are selling investment properties.

Being a landlord comes with a bunch of responsibilities: you have to keep the property safe for your tenants and have to do things like get a gas safety certificate (if the property has gas). It's important for both you and your tenants that you understand these before you let a property. A lettings agent would probably be prepared to walk you through the basics.

Generali

Gulash wrote: »

Could you elaborate please?

Sure.

The Government has introduced a series of rule changes that treat letting a property differently to other businesses. To me, those changes taken in the round imply that they do not want to see individuals buying houses with mortgages and letting them out.

mwpt

Generali wrote: »

Sure.

The Government has introduced a series of rule changes that treat letting a property differently to other businesses. To me, those changes taken in the round imply that they do not want to see individuals buying houses with mortgages and letting them out.

Hmmm. I'm not sure I'd agree with the extent of that sentiment. No-one really knows for sure, so we're just guessing. My guess for what's going on, in no particular order:

1) Tax take. Tories promised no tax rises. We all know what this means is 'no obvious tax rises'. But the increasing pensions and welfare bills means our state is getting more and more desperate for tax income. BTL is an easy and obvious target.

2) Politics. Home ownership has been one of the Tory tenets. They've seen the very fast rise in BTL vs OO (particularly pricing out FTBers) and realised they could reverse this slightly for some political points. See George Osborne's comments for evidence of this.

3) The obvious end point for an investment which can "never fail", is everyone piling in, and simply no homes left for OOs. That is of course hyperbole, but really it is a dangerous trajectory. BTL landlords just don't sell very often. They continue to amass property which would otherwise have changed hands, kept the market moving, and resulted in stamp duty.

4) Stability. There could be a risk in the future of the BTL sector dominating the market and potential for bigger downward moves than otherwise. Maybe not right now, but I can't complain that for once they are being proactive. A little later than I'd have liked.

I could actually list others but those are my guesses at what the government might be thinking. I don't think they want to eliminate the amateur BTL industry entirely, just make sure they're on a solid business model, rather than pure speculation prone to busts.

Broken_Biscuits

Gulash wrote: »

I was thinking 1bed flat, as most people are single and work in the city for 1-2 years, so I was thinking that 1bed flats are in most high demand. I think most families needing 2bed properties, will always get a mortgage and buy, instead of living on rent. Are you sure the best movement is to go for a 2bed?

Also, I didn't understand how I can earn 6% from regular savings. I know the savings calculator but I think you can't really achieve 6% by putting your money in several savings accounts, and the maximum amount you can put is 144k I think.

So, do you think I would buy to rent with my cash and then get a mortgage to buy to live? Or I should just buy a property to live with my cash?

If you are buying purely as an investment, consider buying outside of your home town.

At the different ends of the country, both Bristol and Manchester are expected to see house price increases above UK average. Birmingham too for a middle approach if you are looking for the closest to your home town.

50k in a bank account will safely earn you 3-5%.
50k as a 25% deposit on a 200k property where prices are expected to rise 25% in 5 years should earn you considerably more.

Do your own research obviously.