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How many properties would you need to own to live off the rent with a wife and kids?

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    So lets say you have a good solid job for 10-15 years and then wish to retire, if your parents help you a bit with your initial property, and then after 15 years you go into private property investment, how many properties/houses would you say a person would need to own to live off taking into account they wouldn't be getting any benefits or pensions, so their sole income would be from property, and that has to pay for the wife and children too.

    1 property - for you and wife and kids to live in (let's say inherited by parents)

    2nd property - buy outright using wages, rent out, use rent to pay for wife and kids

    3rd property - mortgage one of others; put on rent, use rent to pay off mortgage, eventually make profit when property becomes your own

    4th property - i'd say this is where it starts to becomes a full-time retirement job as rent money becomes living money

    5th (and beyond in a property portfolio) property - this is where it is comfortable as rent money is spending money and a steady income for life

    So let's say a person doing a 4-year Masters graduates at 23, at 27 becomes chartered earning a healthy sum of money from then on, realistically, when can they retire from work and go into the property business as a private trader?
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    It depends on the returns you make on the propertys.

    Usually buy to rents aren't worth it unless you get them cheap at auction and rennovate them.
    If you're new to the game chances are your returns will be low to begin with as well.

    If you're looking into property development, do A LOT of research not just on the best way to go about it, but the best areas to buy into, the houses you'll be looking at, similar properties in the area. Don't take anything an estate agent tells you as the gospel truth.
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    As above, depends on yeild and interest you're paying, Id say about six if you own your house outright.

    Not sure your parents will die by time you're 42 to be honest...
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    (Original post by Quady)
    As above, depends on yeild and interest you're paying, Id say about six if you own your house outright.

    Not sure your parents will die by time you're 42 to be honest...
    They have 3 properties lol, so I could take one to start my portfolio.

    Wow, six is a lot though, and will probably take a lot of time and money to get there. But if that's comfort, that's what i'll aim for, hopefully

    (this quote is to the person above also)

    I was intending to buy cheap in auction, and renovating, and since it would be a full-time career, I could and would have the time for that. In terms of rent, perhaps (in the current market) £750-800 per calender month, or if I could make >/50k profit on any sale, especially if it was the first or second, then i'd make a quick sale.

    Obviously i'm going to research everything that I currently don't know, and I still have a lot of time (i'm first year in uni lol), so that isn't a problem, but i'd like to consider property as a career in my 40's.
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    £750-800pcm on rent, what is that based on, whats the margin likely to be. Have you factored for running costs of the house? What sort of mortgages are you going for?
    Have you looked at contract and tenancy law?
    You need to research houses individually, what they'll likely go for at auction, what they'll cost to rennovate, what they can potentially sell for/ rent for, how fast do houses shift in that area, whats the demographic like (will undesirables want to move it?) etc.

    Also, have you ever rennovated properties before? It's not as easy to get them up to a high standard as you might think unless it's all cosmetic, even then some people will struggle to finish them properly. Unless you contract all the work out to local trades.

    You've probably got it easier than I have, I've got to fund my own property development career, the only reason I'm in uni is to get on the property ladder to be honest. But one thing I will always say, do your research. Number 1 reason people lose money in property development is poor research.
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    As above - apart from you've said the first house will be owened outright - after you've saved the £100-120k even at auction.

    I've not heard many success stories of buy to let in the last few years of BTL while values are falling, its easy in a rising market but if it were as easy as you suggest everyone would be at it - although you have the advantage of being given a house for yourself for free.

    I was working on the basis of a margin of £500 for the first one then £200 for the subsequent ones.
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    Bare, my ex's dad was a landlord with something like 10-12 properties and he still worked, the payoff comes years later since you have to bear in mind that when getting started you'll have big mortgage payments to pay on the properties you buy. Expect to wait a while before making any real profit
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    How would you wish to rent out such a house? Student lets bring in a lot more rent money, but there's also some work to be done with making it a legal HMO, and faff with getting tenants in each year.

    For instance, typical student house
    £80pw per student
    7 students in the house
    Half rent during the summer
    52 week let
    £3840pa per student
    £26,880pa total

    If this was your second property, owned outright, and the house that you lived in was also owned outright, and therefore you weren't paying any mortgage, I'd say that you could live off that alone, although it wouldn't be the plushest of lifestyles.

    PS the house that I'm thinking of was sold for £350k in 2005; I think it has probably been done up and HMO'd after that date. Even so, at those rents and that sale price, it would only take 13.5 years to pay off the mortgage, if we ignore interest.
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    Not sure slightly confused
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    Buying to sell is a lot more economical, but then you have to have a lot of capital to start with which puts you in a risque situation before you even begin.

    For example, a good friend of mine bought a run down house in a decent area at an auction for £60,000. Bargain initially, this was in 2007.

    He renovated the house, which cost him I believe in the region of £30,000. He splashed out, made it look real authentic for the area, oozed class. Good kitchen, good size bathroom, and I believe there was a gas leak which needed fixed which cost a few bob, and obviously water leaks etc... Thus the property being cheap to begin with. He finished in December of 2007.

    In April 2008 he finally found a buyer for his house. He sold it for £150,000.

    If you add everything together. £60,000 for the house, say £35,000 in expenditures, inc estate agent fees etc. £95,000. Sold it for £150,000. £55,000 profit. Decent profit, and could go towards buying a new house.
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    (Original post by uktotalgamer)
    Buying to sell is a lot more economical, but then you have to have a lot of capital to start with which puts you in a risque situation before you even begin.

    For example, a good friend of mine bought a run down house in a decent area at an auction for £60,000. Bargain initially, this was in 2007.

    He renovated the house, which cost him I believe in the region of £30,000. He splashed out, made it look real authentic for the area, oozed class. Good kitchen, good size bathroom, and I believe there was a gas leak which needed fixed which cost a few bob, and obviously water leaks etc... Thus the property being cheap to begin with. He finished in December of 2007.

    In April 2008 he finally found a buyer for his house. He sold it for £150,000.

    If you add everything together. £60,000 for the house, say £35,000 in expenditures, inc estate agent fees etc. £95,000. Sold it for £150,000. £55,000 profit. Decent profit, and could go towards buying a new house.
    £55,000 net profit, before capital gains tax or income tax if applicable

    http://www.channel4.com/4homes/buy-s...s-tax-08-06-06
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    (Original post by uktotalgamer)
    Buying to sell is a lot more economical, but then you have to have a lot of capital to start with which puts you in a risque situation before you even begin.

    For example, a good friend of mine bought a run down house in a decent area at an auction for £60,000. Bargain initially, this was in 2007.

    He renovated the house, which cost him I believe in the region of £30,000. He splashed out, made it look real authentic for the area, oozed class. Good kitchen, good size bathroom, and I believe there was a gas leak which needed fixed which cost a few bob, and obviously water leaks etc... Thus the property being cheap to begin with. He finished in December of 2007.

    In April 2008 he finally found a buyer for his house. He sold it for £150,000.

    If you add everything together. £60,000 for the house, say £35,000 in expenditures, inc estate agent fees etc. £95,000. Sold it for £150,000. £55,000 profit. Decent profit, and could go towards buying a new house.
    That's not always the case though, is it? And buying to rent is like a life-long monthly income. Whereas money on a sale can go on other things and tax, etc.

    Thanks to everyone for the replies, obviously I have to do, and will do, a lot of research. But if I have one property fully-outright owned and a full-time job in a pretty decent salary bracket, is it realistic and possible to retire early and do this as a career?
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    (Original post by Origami Bullets)
    How would you wish to rent out such a house? Student lets bring in a lot more rent money, but there's also some work to be done with making it a legal HMO, and faff with getting tenants in each year.

    For instance, typical student house
    £80pw per student
    7 students in the house
    Half rent during the summer
    52 week let
    £3840pa per student
    £26,880pa total

    If this was your second property, owned outright, and the house that you lived in was also owned outright, and therefore you weren't paying any mortgage, I'd say that you could live off that alone, although it wouldn't be the plushest of lifestyles.

    PS the house that I'm thinking of was sold for £350k in 2005; I think it has probably been done up and HMO'd after that date. Even so, at those rents and that sale price, it would only take 13.5 years to pay off the mortgage, if we ignore interest.
    I'd definitely be renting to students ideally. The number of them in the house and the price they pay and the fact that it would always be a readily available market would mean a steady monthly income for life, which is what I wish to achieve so I can 'retire' from working for an Industrial (or otherwise) company early to working for myself.
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    Don't forget to account for repairs and maintenance, not just mortgage repayments.
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    I'd say 10 to be honest, if you include the mortgage. Probably be around £200 profit PCM per property.

    Also I'd recommend using the surplus cash to reduce the mortgage. I forget which type it is but there is a type that allows you to pay it off quicker.

    I think you said that you'd buy the second property, get that as soon as you can and try and have that paid off by 40.

    Everytime one gets paid off there will be a lot more money
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    (Original post by Shani)
    £55,000 net profit, before capital gains tax or income tax if applicable

    http://www.channel4.com/4homes/buy-s...s-tax-08-06-06
    If hes living in the house he wont have to pay tax. If I was to develop property I would also be "living" in my house.
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    Why?
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    (Original post by Greig_R)
    If hes living in the house he wont have to pay tax. If I was to develop property I would also be "living" in my house.
    Depends on how long he lived there. You cant just live in it for 6 months while its being renovated and then claim it was your main residence avoiding capital gains tax. The tax man takes a dim view of people doing that.
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    Also, with regards to students, while you might make money on most years, its not hard for them to do more damage than the £200 bond or whatever was placed at the start of the contract. It doesnt take much to do thousands of pounds worth of damage to funishings, wallpaper etc and while it might not matter most of the time when you come to sell it'll all have to be fixed. Margins on BTL are pretty slim whether you service students or non students.
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    (Original post by Riderz)
    Also, with regards to students, while you might make money on most years, its not hard for them to do more damage than the £200 bond or whatever was placed at the start of the contract. It doesnt take much to do thousands of pounds worth of damage to funishings, wallpaper etc and while it might not matter most of the time when you come to sell it'll all have to be fixed. Margins on BTL are pretty slim whether you service students or non students.
    Agreed but you get a higher yield than the banks give you. However you do speculate on rental income and the property price rising so its a double bet.

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