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Anyone or their parents bought a house? Watch

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    Just a few questions as I am looking to move into the buy to let space and would be good to get some market data to see what to expect. Only have to fill in the details you know. Thanks

    House value: ?
    Mortgage value: ?
    Location: ?
    Purpose for buying: ie. Buy to let; or Buy to live in
    Rent charged (only applicable if Buy to Let):
    Gross Salary: Salary of whomever bought the house (if it was you and your partner, or your parents together, then combined salary)
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    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.
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    (Original post by littlenorthernlass)
    Well. You're winning at life, aren't you?
    I remain in awe
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    (Original post by NX172)
    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.
    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.
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    (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).
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    (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.
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    (Original post by Snufkin)
    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.
    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?
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    (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.
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    (Original post by Snufkin)
    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.
    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.
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    (Original post by Snufkin)
    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.
    Loads of people get screwed house flipping, don't see why you're so salty.
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    (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 people who cannot buy a home? Really, such sweeping statements are too vague to answer.
    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?

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    (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.
    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.

    (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.
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    (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
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    (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.
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    (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)
    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
    I think you guys are in the wrong thread.

    This is not the TSR Communists society.
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    (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.
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    (Original post by That Bearded Man)
    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?
    (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 think the first topic is rent and how and why it is what it is.

    I'd like to clarify that rent cannot be set at a whim, it is governed by price elasticity, supply and demand.

    The rental market is hot right now, many people fight over a single property. I'm renting right now and I had to fight hard to get it. People outbid eachother, why? Because demand far outstrips supply. So unless the underlying problem, that is - a lack of supply due to not enough properties being built to fulfill demand, is solved, government intervention to disrupt the market can have appear to have short term effects but always at the same time bring a negative side effect for artificially tampering with the market.

    An example of what they introduced recently, is to charge tax on landlords' mortgage interest. It'll definitely deter potential and small landlords. However, many experts believe all this is going to do is drive rental prices up (due to a reduction of rental supply) and barely dent the house prices. This is because BTL landlords only make up 20% of all house purchases. If landlords are paying £100 more tax, then they'll put the rent up £100 to cover their costs. Government isn't helping.

    Personally I wouldn't care if I'm charging £400 for rent if my costs were £100. Or if I was charging £1200 but my costs were £900. Either way, it's £300 profit. If I wasn't being taxed 40% on profit, the savings could be passed onto you.

    Sure, the government can impose rent caps. However, if the true cost of providing a rental is significant, then the BTL business is no longer worthwhile. That may sound great but without a supply of rental properties, all you're going to get is higher rents due to a tiny supply pool. In order for a healthy market to exist, rental properties need to exist. Not everybody is there with £25k cash in hand ready to buy a property and rentals are necessary. I know in my scenario that if BTL rentals were eradicated, I would have nowhere to rent and I didn't have the budget to compete with wealthy foreigners looking to buy a home in the UK, I would have to leave London altogether.

    At the end of the day, the government need to build more homes and there's only so much they can circle around the problem.


    (Original post by That Bearded Man)
    don't you feel morally wrong for making money on something as basic as housing?
    Why do people need to "profit" from housing?

    Because good landlords add value.

    As part of a community of responsible landlords who follow best practices, I wholeheartedly agree that landlords who provide inadequate housing conditions and charge a high rent should not be allowed to do so. This gives the good landlords a bad name.

    BTL is a service provided to people who cannot or currently do not wish to make a commitment to paying a mortgage. Whether taking BTL out of the picture will vastly change house prices is debated, but as I described above, for many reasons it would only make life more difficult. Either way, in order to provide the service, the investment needs to be worthwhile to the investor. In my example, what's the point of me spending 6 months of my time and money, every single weekend to renovate a house on the verge of deterioration and turn it into quality housing if the return on effort, let alone investment, is barely anything? Should I halve the price of the property for charitable purposes such as to simply make you happy? Should I have simply left the house to rot, thereby the house drops in price cheap enough for a first time buyer to buy and live in? Then only for them to live in a dated house with rainwater seeping through the walls?

    Personally I've always got things like boilers and radiators fixed within 1 day, and most queries resolved within 2 days, including my weekends. My tenants are happy with the level of service and are able to live in comfortable homes with peace of mind.

    I may charge £1600 pm but given a 4 bedroom property and its decent location, I think £400 per person isn't a "high rent". For someone with a modest salary of £24,000 / £1600/mo it's only 25% of their earnings on rent. (Recommended by experts is <30%)

    I do agree with certain countries' laws where, I believe in Germany, they only allow rent increases in line with certain levels of home improvements being made.
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    (Original post by NX172)
    X
    May I ask how old you are?
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    (Original post by Cherx)
    May I ask how old you are?
    I'm a self-made 24 year old from a low income family...
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    (Original post by NX172)
    I'm a self-made 24 year old from a low income family...
    I'm impressed!
 
 
 
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