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Saved £15k-20k, would it be worth buying a buy-to-let in Manchester? Watch

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    £15-20k in London wouldn't touch the surface but with £15-20k in the bank, plus an annual salary of £23k, I'd have enough to get £125k mortgage and a buy to let in Manchester, close to the city centre.

    Would it be worth doing this if I don't intend on owning another property for 5-10 years?

    Yields are around 6% and house prices are still very attractive whilst more and more companies are opening offices in the city.
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    Do it quick.There is never a better time to get property.Its going to get worse.
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    (Original post by vinchy)
    Do it quick.There is never a better time to get property.Its going to get worse.
    I mean the UK will eventually need a real second city. London can't go on for the next 50 years still being heads and shoulders above the rest.

    At the moment the UK only has one major city and it seems all indicators are pointing to Manchester being the second major city in the next 50 years.
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    (Original post by accno1)
    I mean the UK will eventually need a real second city. London can't go on for the next 50 years still being heads and shoulders above the rest.

    At the moment the UK only has one major city and it seems all indicators are pointing to Manchester being the second major city in the next 50 years.
    Yes manchester and bristol.I would not buy london either.Just out of interest,how did you manage to save so much?
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    Yeah buy to let has a good chance of success in Manchester I would think, but definitely manage the investment well, sounds like it could pay off... you have the right strategy..
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    You can't buy to let unless you own another (residential) property. There's a chance that if you were to buy one (and get accepted for mortgage etc) that you could let it out without the bank knowing, but this would probably be in breach of your mortgage Ts&Cs.


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    Birmingham brah
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    (Original post by vinchy)
    Yes manchester and bristol.I would not buy london either.Just out of interest,how did you manage to save so much?
    I've just worked and saved and not spent anything. It's basically impossible for me not to increase my savings everyday.

    I'm not frugal, I was really social at uni but I've struggled since. So I've found other ways to interest myself and this has meant I've spent hardly anything.

    I don't feel restricted either, there's just nothing I want.

    I have clothes, a watch and a car. I can afford decent supermarket food and drink and bills are taken care of. I also live at home as I don't ever wish to make another man richer, again.

    I paid rent whilst at uni and that will be the last time.

    Sir Alan Sugar makes far more money from property than any feasible business venture he currently owns. Land is the only thing accountants don't depreciate, every other tangible or intangible asset is depreciated, that tells you something.

    I just want enough to live comfortably. Building this in your twenties will help you later on
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    (Original post by accno1)
    I've just worked and saved and not spent anything. It's basically impossible for me not to increase my savings everyday.

    I'm not frugal, I was really social at uni but I've struggled since. So I've found other ways to interest myself and this has meant I've spent hardly anything.

    I don't feel restricted either, there's just nothing I want.

    I have clothes, a watch and a car. I can afford decent supermarket food and drink and bills are taken care of. I also live at home as I don't ever wish to make another man richer, again.

    I paid rent whilst at uni and that will be the last time.

    Sir Alan Sugar makes far more money from property than any feasible business venture he currently owns. Land is the only thing accountants don't depreciate, every other tangible or intangible asset is depreciated, that tells you something.

    I just want enough to live comfortably. Building this in your twenties will help you later on
    Thanks man, am inspired!
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    (Original post by accno1)
    £15-20k in London wouldn't touch the surface but with £15-20k in the bank, plus an annual salary of £23k, I'd have enough to get £125k mortgage and a buy to let in Manchester, close to the city centre.

    Would it be worth doing this if I don't intend on owning another property for 5-10 years?

    Yields are around 6% and house prices are still very attractive whilst more and more companies are opening offices in the city.
    it is certainly worthwhile as long as you aim to profit in under a quarter century it's a worthy investment

    (Original post by accno1)
    Sir Alan Sugar makes far more money from property than any feasible business venture he currently owns. Land is the only thing accountants don't depreciate, every other tangible or intangible asset is depreciated, that tells you something.

    I just want enough to live comfortably. Building this in your twenties will help you later on
    land isn't the only thing
    gold, silver and platinum bullion
    fancy coloured diamonds
    large white diamonds (2ct single stones)
    certain rare collectables like rare cars and watches if done correctly
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    (Original post by accno1)
    £15-20k in London wouldn't touch the surface but with £15-20k in the bank, plus an annual salary of £23k, I'd have enough to get £125k mortgage and a buy to let in Manchester, close to the city centre.

    Would it be worth doing this if I don't intend on owning another property for 5-10 years?

    Yields are around 6% and house prices are still very attractive whilst more and more companies are opening offices in the city.
    Go in eyes wide open. Can you afford to pay the mortgage for several months if the property is empty or your tenants don't pay their rent? Can you afford any large capital gotchas that owning a property might throw at you? I know a few people who have bought to let, and all have had their fingers burned to the tune of thousands of pounds.

    It isn't always a one way ride. Be warned.
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    This is what I'd like to do if I have enough of my student loan left!
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    (Original post by Edminzodo)
    This is what I'd like to do if I have enough of my student loan left!
    A friend at my work did it.

    He works at my firm, he hasn't told his bank that he lets it out but he did live in it for 1 week and then will claim a change in circumstances lol.

    I wish I saved more of my loan/grant but hey, it sets you back a few years and trust me, the fun at uni is priceless.

    Time has a price and you'll never get those years back
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    (Original post by accno1)
    with £15-20k in the bank, plus an annual salary of £23k, I'd have enough to get £125k mortgage and a buy to let in Manchester, close to the city centre.
    OK reality-check time.

    As previously mentioned, you can only purchase BTL if you already own a residential property. By the sounds of it, you plan to buy both a residential property and BTL.

    1 - I doubt you'll even get a 125k AIP on just 23k salary after factoring in living costs. It's a lot tougher now with the new lending criteria and affordability checks.

    2 - There aren't 100% LTV mortages any more, so you would have to put down at least 10% (could go 5% but I don't recommend doing this at all). That's ~14k gone. Then another 1k in fees for a decent solicitor. Could probably look into those Help to Buy things, though.

    3 - Some BTL lenders require you to have a minimum salary of £25,000

    4 - The maximum LTV on BTL mortgages is 75%. Even then, sometimes it's still not enough. Maximum lending amount will be calculated with the notional rate of 5% NOT the product rate.

    I don't know the house prices up north but I'm going to assume a 2 bed can be bought for £120,000. Which means you'll need a £30,000 deposit to get your hands on it. Don't forget you'll now need to pay an extra £3600~ on top of stamp duty as a surcharge on second home purchases. Oh and another £1000 in solicitor costs, some more for an estate agent and some to put the property in a ready to rent condition, some money for the accountant, etc.

    5 - Don't forget to pay your tax, too. In the coming years you won't be able to claim mortgage interest relief, so say goodbye to your profitability.

    BTL can still be very profitable, but you have to re-think your strategy. Nowadays, anyone looking to leverage that much will be punished financially, very hard.

    My advice to people thinking about investing in BTL nowadays is to only get into it with a low gearing strategy. (I suggest 40% deposit) Lower risk, less borrowing, less affected by the recent changes regarding mortgage interest tax relief, etc.

    Keep saving and don't be greedy. Take it one step at a time. There are many ways to safely grow your savings. Diversify your investments, don't put all your eggs in one basket. Maybe think about BTL when you have 35-50k lying around.
 
 
 
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