Building a house at 25 - a bad idea?

The_Architect

AFF8879 wrote: »

I don't think I need to add anything more than what's been said regarding the self-build.

With the option of buying two BTLs and your own place for a sum total of £40k, I have no idea how you would achieve it (unless it's one of those Liverpool-esque schemes of buying delipdated houses for £1 and then doing them up - £3 for the houses, let's say £10k minimum legal fees- no idea if you could get a multibuy discount- which will leave you £8-9k to renovate each house).

Could be possible, but consider the type of tenant you're likely to get in those areas and the very high likelihood you won't be receiving 90% of the rent you're owed, eviction and bailiff costs, etc....

From the research I've done so far these types of properties have had long term tenants, often 10 years+ which I would have thought reduces the risk of those types of issues but of course there will always be a risk which is something I'm yet to experience.

I can see I'm being overly ambitious here and that I would need everything to go 100% correctly if it was to work out fine which is just never going to happen, ambitions have now been scaled back.

Cornucopia

I wouldn't be too put off - Scotland presents an entirely different property environment to England, and even the difference between Glasgow and Edinburgh can be considerable.

In terms of a sensible long-term plan, owning all or most of your own home early on is an extremely good idea.

AdrianC

You're putting the time and effort and blood pressure into building a house, you want it to be a long-term place.

You're 25. Do you have the first idea how much space you'll want in 20 or 30 years time? Do you know what sort of layout you want?

You keep going on about these £10-15k BTLs - really? Care to link to the sort of thing you're thinking of? Do you have the slightest idea of how much they'll cost to get to any kind of standard where your tenants won't be the very bottom end of the market? Or will you just be going with that, and accepting all the hassle and costs and voids and damage and unpaid rent that comes with that?

Cornucopia

There are cheap properties in the Glasgow area, though usually sold through auctions, and more typically £25-35k...

http://www.rightmove.co.uk/property-for-sale/property-57172252.html

The figures work, though, even a bit further up the market, e.g. these comparable properties (one for sale, one for rent)...

http://www.rightmove.co.uk/property-for-sale/property-43330272.html

http://www.rightmove.co.uk/property-to-rent/property-57270220.html

No... I have no idea what Kilsyth is like.

Doozergirl

I'll tell you what, OP. Don't listen to the majority.

You need to be careful, you need to do homework but the truth is that most people are scared of an awful lot of things and they try to cut others back to their own size. Most people are petrified of risk.

I think self build is unusual but of course you don't have to live in it forever, so there are some comments on here far more ridiculous than your ideas. You can sell it when you've had enough and move on.

I have a cheap BTL and it's been a real headache for most of the nine years I've owned it. It owes me money! Long term tenants are a dream but the others, when you're talking about people who can't afford to buy a house that cheap, are a real nightmare to deal with. Renovation costs over and over again will slice into returns very quickly. A new boiler being fitted will probably take 9 months rent of what you're talking about and cost 25-30% of the property value, so no increasing returns from either side of that coin.

The_Architect

Doozergirl wrote: »

I'll tell you what, OP. Don't listen to the majority.

You need to be careful, you need to do homework but the truth is that most people are scared of an awful lot of things and they try to cut others back to their own size. Most people are petrified of risk.

I think self build is unusual but of course you don't have to live in it forever, so there are some comments on here far more ridiculous than your ideas. You can sell it when you've had enough and move on.

I have a cheap BTL and it's been a real headache for most of the nine years I've owned it. It owes me money! Long term tenants are a dream but the others, when you're talking about people who can't afford to buy a house that cheap, are a real nightmare to deal with. Renovation costs over and over again will slice into returns very quickly. A new boiler being fitted will probably take 9 months rent of what you're talking about and cost 25-30% of the property value, so no increasing returns from either side of that coin.

Thank you.

To be fair this was more of a 'shoot it down because I can't' type of thread and it's given me a lot to think about. I now feel that it's definitely a worthwhile goal to pursue but a lot more research needs to be done, the BTL's can come before or after but realistically it's not going to happen at the same time.

Interesting to hear your insight on how low cost BTL's have gone for you, I always thought it would be like this but have met quite a few people who have had minimal issues, I guess it's always a big risk though.

Thanks everyone for your thoughts.

jennifernil

The_Architect wrote: »

Houses in small places outside of Glasgow often go for £10,000-£15,000 and rent for £300 PCM. Some adjustments in math show this to be a lot closer to 20-30% depending on how optimistic you are, sorry I'm not sure why I had that figure in mind.

Really, would you like to give a few examples?

jennifernil

Cornucopia wrote: »

There are cheap properties in the Glasgow area, though usually sold through auctions, and more typically £25-35k...

http://www.rightmove.co.uk/property-for-sale/property-57172252.html

The figures work, though, even a bit further up the market, e.g. these comparable properties (one for sale, one for rent)...

http://www.rightmove.co.uk/property-for-sale/property-43330272.html

http://www.rightmove.co.uk/property-to-rent/property-57270220.html

No... I have no idea what Kilsyth is like.

Pretty dire, depending on the area.

If it is cheap , there is always a reason.

theartfullodger

The_Architect wrote: »

.........if not more daunting than owning a couple of 40% yield shacks that could fall down at any second. ......

Seen the news about the 9 landlords being banned in Glasgow??
http://www.landlordzone.co.uk/forums/showthread.php?76961-Nine-landlords-found-unfit-to-rent-in-Glasgow

Being a landlord in Scotland is a serious business, only for those with the financial AND emotional reserves to cope with the "tenant-from-hell" or the "agent-from-hell"....

And you know about the planned changes to tenancies in Scotland that will mean the end of evictions for no reason at all (cf s21 in England), and other restrictions on landlords??

The_Architect

jennifernil wrote: »

Really, would you like to give a few examples?

http://www.rightmove.co.uk/property-for-sale/property-63227624.html

Just a quick example, some work to be done and will almost certainly go for over £10,000, plenty out there with long term tenants in.