Getting Started in Property

JakeHyde

Hi MSExperts,

Firstly, I hope I'm posting in the right section. I really want to get into property and I'm trying to take my first steps. Unfortunately I lost my mum over a year ago so I have some money to invest. 

I guess I need to buy my own home first to make good use of that first time buyers stamp duty relief, before looking to buy any rental properties, right?

Has anyone had any real world experience with the likes of Touchstone Education. I see a lot of these property gurus online, and I get strong snake oil salesman vibes from all of them.

I'd love to learn about setting up a Ltd Company, and avoiding Section 24 rules. etc.

kipperman

My first move would be to search this forum for the large number of posts where things have gone wrong for Landlords and ask myself whether the returns I might get would be worth it. 

Buying a first home is probably a sensible move, but again you don't need to pay for any advice from property gurus to do that. The good news though is that you are asking questions and appear to have a healthy cynicism for said gurus. If making money from property is as easy as they claim, why are they not doing this rather than selling you their "knowledge"?

RHemmings

JakeHyde said:

Hi MSExperts,

Firstly, I hope I'm posting in the right section. I really want to get into property and I'm trying to take my first steps. Unfortunately I lost my mum over a year ago so I have some money to invest. 

I guess I need to buy my own home first to make good use of that first time buyers stamp duty relief, before looking to buy any rental properties, right?

Has anyone had any real world experience with the likes of Touchstone Education. I see a lot of these property gurus online, and I get strong snake oil salesman vibes from all of them.

I'd love to learn about setting up a Ltd Company, and avoiding Section 24 rules. etc.

How expensive a property are you looking to buy? Unless I misunderstand things, I think that my first time buyer relief from stamp duty saved me £15. 

I'm in a similar situation to you, except that I've done the buy my own house bit. I considered buying a house to be my son's and renting it out until he wants it. But, the renting out bit is quite complicated, as many threads on here show. 

theartfullodger

Most years I make money from B2L.  But not always.

Do you have the financial AND emotional reserves to cope with the tenant-from-hell (or agent-from..) who doesn't pay you for 7 months whilst you pay mortgage, legal costs and repairs***??  Phone calls Saturday 9:30 pm about the toilet leak? (Tenant is entitled to your name & ACTUAL address.

*** Repairs?? If landlord isn't fixing things who do you think judge at court eviction hearing will side with??

I've just persuaded my agent to start paying me the rent they've had since last September......

Albermarle

JakeHyde said:

Hi MSExperts,

Firstly, I hope I'm posting in the right section. I really want to get into property and I'm trying to take my first steps. Unfortunately I lost my mum over a year ago so I have some money to invest. 

I guess I need to buy my own home first to make good use of that first time buyers stamp duty relief, before looking to buy any rental properties, right?

Has anyone had any real world experience with the likes of Touchstone Education. I see a lot of these property gurus online, and I get strong snake oil salesman vibes from all of them.

I'd love to learn about setting up a Ltd Company, and avoiding Section 24 rules. etc.

After  buying your own home, you may well find it easier to invest your money in a pension, or Stocks and shares ISA's.
This will take a minimal amount of your time up sat in front of a computer, as opposed to the hard work of dealing with rental properties.
Especially if you are not an experienced landlord and are not a good handyman/builder/ DIYer

Schwarzwald

before taking your first steps getting into property .... the real question that determines a lot of follow ups is .... WHY do you want to get into property?

I hear so many friends and family speaking about "wanting to get into property" investing thousands of their savings plus borrowing without even being clear around the WHY, WHY, WHY ....

RHemmings

Schwarzwald said:

before taking your first steps getting into property .... the real question that determines a lot of follow ups is .... WHY do you want to get into property?

I hear so many friends and family speaking about "wanting to get into property" investing thousands of their savings plus borrowing without even being clear around the WHY, WHY, WHY ....

We've had decades of media portraying property investing as the golden money tree. I'm not surprised if there are many people wanting to get into it. Unfortunately, media does have an influence. 

I'm not the OP, but in my case I was considering a single property intended to be gifted to my son, and one part of that was as insurance to make sure that he can get onto the property ladder without needing a mortgage. The renting it out bit was meant to enable the property to wash its own face, rather than be a huge profit-making venture. Rental income would allow maintenance and hopefully improvement of the property over time. 

Albermarle

Schwarzwald said:

before taking your first steps getting into property .... the real question that determines a lot of follow ups is .... WHY do you want to get into property?

I hear so many friends and family speaking about "wanting to get into property" investing thousands of their savings plus borrowing without even being clear around the WHY, WHY, WHY ....

I think it is because people feel they understand property. They have their own home, often that will have increased in value significantly. They will have ideas about design and improvements. They will see friends and relatives improving their homes and increasing value, so it all seems rather interesting and exciting. Plus as the previous poster says lots of property p*rn programmes on the TV .
Of course the reality of running a BTL portfolio or property development is somewhat different .

On the other hand investments, pensions etc are scary, and/or a mystery and/or seen as risky . 

Bigphil1474

OP, could you look at buying, improving, then selling houses? The market doesn't seem to have picked up too much recently, so there'll be bargains to be had. Spend a bit of time fixing them up, and by then the market may have picked up again, and you make a tidy profit. If you know what you are doing, it's probably less hassle than becoming a landlord. Having said that, a mate of mine has multiple properties, buys local cheap houses, fixes them up, and rents them out, and he doesn't get too much hassle.

Schwarzwald

Albermarle said:

Schwarzwald said:

before taking your first steps getting into property .... the real question that determines a lot of follow ups is .... WHY do you want to get into property?

I hear so many friends and family speaking about "wanting to get into property" investing thousands of their savings plus borrowing without even being clear around the WHY, WHY, WHY ....

I think it is because people feel they understand property. They have their own home, often that will have increased in value significantly. They will have ideas about design and improvements. They will see friends and relatives improving their homes and increasing value, so it all seems rather interesting and exciting. Plus as the previous poster says lots of property p*rn programmes on the TV .
Of course the reality of running a BTL portfolio or property development is somewhat different .

On the other hand investments, pensions etc are scary, and/or a mystery and/or seen as risky . 

that is the point i am getting to, they "feel" things.
Business and making money is not about "feelings".
and making money in property isnt as simple as portrayed in "Homes under the Hammer".
if you want to get into property in oder to make money, your benchmark is at least 10% yield that you can get by simply putting your money into the S&P 500, without taxes if you do it via ISA.
so how do you outperform a 10% yield (potentially net of taxes) in property?
it's not easy.
if you compound at 10% p.a. in S&P 500 you double your money every 7 years.
without any tenant calling you up on the weekend.
without having to coordinate builders.
without the risk of getting fined for forgetting to send EPC certificates.

if you want to get into property so you can tell your friends that you made it in life that's also fine, just be aware that it could be a quite costly vanity project.

Albermarle

Schwarzwald said:

Albermarle said:

Schwarzwald said:

before taking your first steps getting into property .... the real question that determines a lot of follow ups is .... WHY do you want to get into property?

I hear so many friends and family speaking about "wanting to get into property" investing thousands of their savings plus borrowing without even being clear around the WHY, WHY, WHY ....

I think it is because people feel they understand property. They have their own home, often that will have increased in value significantly. They will have ideas about design and improvements. They will see friends and relatives improving their homes and increasing value, so it all seems rather interesting and exciting. Plus as the previous poster says lots of property p*rn programmes on the TV .
Of course the reality of running a BTL portfolio or property development is somewhat different .

On the other hand investments, pensions etc are scary, and/or a mystery and/or seen as risky . 

that is the point i am getting to, they "feel" things.
Business and making money is not about "feelings".
and making money in property isnt as simple as portrayed in "Homes under the Hammer".
if you want to get into property in oder to make money, your benchmark is at least 10% yield that you can get by simply putting your money into the S&P 500, without taxes if you do it via ISA.
so how do you outperform a 10% yield (potentially net of taxes) in property?
it's not easy.
if you compound at 10% p.a. in S&P 500 you double your money every 7 years.
without any tenant calling you up on the weekend.
without having to coordinate builders.
without the risk of getting fined for forgetting to send EPC certificates.

if you want to get into property so you can tell your friends that you made it in life that's also fine, just be aware that it could be a quite costly vanity project.

I would agree with your post but I think you have to caveat the comment in bold.
Investing solely in one market index would not be a normal or recommended strategy for any investor. 
A more regular investment would be a global equity index, which should still return 7 or 8% over the long term, but with the possibility of periods of years of losses.