Anyone or their parents bought a house?

My latest BTL purchase was in Sept 2014

Value: At the time? £275,000 asking price, bought for ~£247,000 after negotiations.
Mortgage: ~£186,000 or so, whatever 75% is. Paying £527/mo interest only.
Location: Southville, Bristol
Purpose: BTL
Rent Charged: £1600/pm
Gross Salary: £32,000 at the time excluding other BTL or rental income.

Original Rental estimate was £850 - £950pm by estate agents.
Sank around £25,000 worth of renovations into the property to make it high standard. Re-valued at £1450-£1500 pm rental. The property was popular and people fought amongst themselves so finally received a rental offer of £1600.
Property itself was valued by an estate agent right after renovations at £325,000 (~April 2015). Now worth around £365,000 according to Zoopla with "100% confidence level".

Looking to add a loft conversion for an extra bedroom + en-suite before selling the property.

(edited 8 years ago)

Reply 2

Reue

Original post by littlenorthernlass

Well. You're winning at life, aren't you? :colonhash:

I remain in awe

Reply 3

Satanas

Original post by NX172

Thank you for posting. This is the kind of thing I needed for inspiration.

It's awe-inspiring to see you stand to more than double your money within the space of just 2 years.

Very well done.

(edited 8 years ago)

Reply 4

Original post by Satanas

Thank you for posting. This is the kind of thing I needed for inspiration.

It's awe-inspiring to see you stand to more than double your money within the space of just 2 years.

Very well done.

I think it may be a bad example, as normally I don't go for 3/4 bedroom properties for BTL: It's too capital intensive to cough up 25% up front. It's usually inefficient. The sweet spot is 2 bedroom properties, IMO.

Here's some before and after photos of the renovation.

Before

After

It's an old victorian house. These older beauties treat you well if you treat them well. The house had countless problems with damp (bathroom ceiling was more or less black and caving in) and even a roof beam on the verge of snapping. Roofer after roofer they couldn't fix the damp completely but thousands of £s later, the problem was finally solved the house was ready to offer up everything in return. So I went ahead with a full renovation to squeeze every penny of profit-translatable improvement I could.

It wasn't easy, the whole 5-6 months it was under renovation I had no rental income yet still had to pay the mortgage and was on-site almost every weekend for that period of time. (I still had to work a day job!)

Although victorian properties can yield great rent and capital gain, many have problems hidden behind the walls. (One of the walls was dripping wet, but in general had to get almost every wall re-plastered)

My point is, for this reason I don't want to recommend or to mislead students / beginners into thinking BTL / property development is an easy get-rich method. Investing in high risk properties without knowing what they could be dealing with / without the necessary budget to fix potential problems can be catastrophic and ruin your finances for life. High risk, high reward, as they say. As with anything, start with lower risk properties and work your way up, building capital and experience, you need BOTH.

So what should you do? Rather in investing in properties that may require structural changes, a beginner should lower the risk by investing in houses that only require cosmetic changes, such as modernisation. You'll build confidence, gain quick, decent bursts of capital gain to expand your portfolio and not-to-be-overlooked, build up your contacts of tradespeople. Took me a long time to find a selection of trustworthy people with a high standard of work and good rates. Many rip you off, do a bad job and you'll never see them again. Obviously going too safe and buying properties that require no work to put onto the rental / sale market, won't be profitable at all. Someone's already done the renovations and eaten your share of the pie.

A more recommendable example, one of my other investments is a 2 bedroom 2 reception house bought for £147,000 in 2013 (Asking price £152,000). Barely spent £4k to modernise it. Rental income is £940/month. Not bad for a quick investment in the £20Ks. (Now worth at least £185,000 according to Zoopla, although I'm sure that I can fetch as much as £205,000).

(edited 8 years ago)

Reply 5

Original post by NX172

snip

It's pretty depressing that people my age and younger are now getting into the BTL game. I understand that everyone wants to make money, but I do wonder what the **** is wrong with people who are happy to let the poor pay their mortgages for them, whilst at the same time making it even harder for people to buy their own home. I really do hope that this property bubble burst big time, BTL investors deserve to take a hit for once.

Reply 6

Original post by Snufkin

Do I really need to address this or can we assume this passive aggressive comment is off-topic and can only lead to a digression about for/against BTL?

Reply 7

Original post by NX172

Do I really need to address this or can we assume this passive aggressive comment is off-topic and can only lead to a digression about for/against BTL?

My post was neither off-topic nor passive aggrieve. You're not obliged to address my post if you don't want to, but it would be interesting to know if you agree that BTL is destroying the housing market and creating a generation of people who can't afford to buy their own home.

Reply 8

Original post by Snufkin

First, please let me know exactly why you think BTL would be "Destroying the housing market" and why this leads to a generation of people who cannot buy a home? Really, such sweeping statements are too vague to answer.

(edited 8 years ago)

Reply 9

Lehoe

Original post by Snufkin

Loads of people get screwed house flipping, don't see why you're so salty.

Reply 10

That Bearded Man

Original post by NX172

Because you now have people profiting on something without competition, you're not regulated enough to ensure fair rents. If everyone who had the money wanted to they could buy every house in the country, thus people now never own their own home, they can't pass it on to their kids, don't you feel morally wrong for making money on something as basic as housing?

Posted from TSR Mobile

Reply 11

Original post by NX172

First, please let me know exactly why you think BTL would be "Destroying the housing market" and why this leads to a generation of poor people who cannot buy a home? Really, such sweeping statements are too vague to answer.

Original post by Lehoe

Loads of people get screwed house flipping, don't see why you're so salty.

I've noticed 'salty' doing the rounds online, it seems to be the new buzzword cool people on the internet use in place of proper, rational debate.

Reply 12

Lehoe

Original post by Snufkin

I've noticed 'salty' doing the rounds online, it seems to be the new buzzword cool people on the internet use in place of proper, rational debate.

Thanks for your not at all bitter response which perfectly addresses the points made

****ing moron

Reply 13

Original post by Lehoe

Thanks for your not at all bitter response which perfectly addresses the points made

****ing moron

I think you missed the point. Can't say I'm surprised.

Reply 14

Satanas

Original post by Snufkin

BTL is a significant factor behind the huge rise in house prices over the last decade and a half. BTL = high rents which make it very difficult for most people to save a deposit. You know this, not sure why you're asking me to spell it out for you.

I've noticed 'salty' doing the rounds online, it seems to be the new buzzword cool people on the internet use in place of proper, rational debate.

Original post by That Bearded Man

I think you guys are in the wrong thread.

This is not the TSR Communists society.

Reply 15

That Bearded Man

Original post by Satanas

I think you guys are in the wrong thread.

This is not the TSR Communists society.

I had no idea owning your own property was considered communism, that's okay, I get it, don't actually debate my point, just throw out a phrase and end it.

Reply 16