15-20K to invest

Moneygrabber89

what is BTL?

Sorry I'm a beginner?

ColdIron

Moneygrabber89 wrote: »

what is BTL?

Buy to let

Sorry I'm a beginner?

That much is evident. You would be well advised not to dismiss people with more experience than yourself

N1ckS

If you're more comfortable with bricks and mortar then an alternative to buy-to-let is a furnished holiday let. There are some tax advantages to furnished holiday lets over buy-to-let and although it's more work for yourself it can be quite lucrative if you get your market right. The downside is that you have to go via a specialist lender with stricter terms and often higher rates.

grumiofoundation

Moneygrabber89 wrote: »

Yeah my friend rents out 2 properties and has told me risk etc and costs associated. Do you know of a better way to invest this money?

Go for it then.
Its obvious you know exactly what you are doing and dont need any advice.
Don't worry about working out a detailed business plan.

Moneygrabber89 wrote: »

weird comment.

the detailing here is far too much for me to understand. I know a few landlords who do very very very well

Dont let the fact that simple and clear explanations are too detailed for you defer you from your plan. Being a landlord is a doddle I hear.

I assume you have read and will proceed to ignore all of the information provided in this link
https://forums.moneysavingexpert.com/discussion/5180214/tenancies-in-eng-wales-guides-for-landlords-and-tenants

I look forward to the threads where you complain you arent making enough profit or you cant evict your tenants because you didnt bother to serve correct notice

MisterMotivated

Have you considered investing in car parking spaces or hotel rooms?

Alistair31

Moneygrabber89 wrote: »

and thanks to eskbanker for leaving

Incredibly myopic.

richyg

Have the schools broken up and we are in silly season for a bit.

Lots of people have done ok - out of buy to let. Part of that is because of favourable taxation and the fact that lots of areas have increased 400% over the last two decades.

If you think the same will happen over the next 20 years - fill your boots.

Personally I doubt it will be as kind to the BTL guys and gals.

But who knows

a.ibz

Hi,


BTL can be a great investment even in todays market. A lot of the comments here are quite negative regarding BTL and im assuming a lot of the people commenting are not actually investors and do not own any BTLs. I own 5 BTL properties and can tell you from my experience that it still works and can provide a good return. My recent purchase was 4 months ago and Im still actively looking to grow.


You have to be more cautious than ever nowadays as the market will not correct any errors you have made like before. That means research is key, not just on the property but the tax rules and mortgage products etc. Its best to do that before you start viewing properties. Start by talking to a good broker and accountant and determine how much you can borrow and at what rate and how much Tax you will likely pay on the profit. Once you know that then you can start to have a good picture on the type of property you can buy and what kind of returns you will see.


The example you gave regarding the terrace house for 70K. you will typically have to put down 25% deposit which is £17.5K, Stamp duty (as a second home purchase) will be 2K and solicitor fee will be 1K. Always assume you need to spend another 2K minimum even if the property is in a good condition. That makes a total of: £22.5K. I would expect rent to be around £450 to £500 per month. Assuming an interest only mortgage at a rate of 3%(definitely achievable today) and that you will pass the management to an agency. then you are looking at £260 per month pre tax profit ( accounting for voids or maintenance at1 months rent per year). That's approx. 13.5% Return on investment. Which is good.


So clearly BTL still works. you just have to find a decent property in a ok area that has good rental demand. Make sure the agency does good referencing and hope you get good tenants. Also plan to hold your property for 10+ years, this a long term investment not a get rich scheme. Hopefully in 10 years your property would have increase in value, but even if it has not you will still have earned £31K in rent which beats the bank by miles.


Do your due diligence and good luck!

cattie

a.ibz wrote: »

Hi,
So clearly BTL still works. you just have to find a decent property in a ok area that has good rental demand. Make sure the agency does good referencing and hope you get good tenants. Also plan to hold your property for 10+ years, this a long term investment not a get rich scheme. Hopefully in 10 years your property would have increase in value, but even if it has not you will still have earned £31K in rent which beats the bank by miles.

Do your due diligence and good luck!

You obviously have the funds behind you to support voids & damage to any of your properties, but wanna be landlords should understand that currently 1 in 4 landlords are off loading their properties due to the increased taxation costs & the fact that just one bad tenant stopping paying rent can wipe out a huge portion, if not all of any profits you might have been relying on. It's not just the loss of rent & the relevant legal costs of evicting such tenants, but the shocking amount of damage that can be caused inside a property, resulting in a complete refit or refurbishment being necessary once you've got rid of them.

Rental property is the last place I'd want to risk my hard earned capital.