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House to buy to let

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I have some savings and considering buying a property and to rent it out as an investment, atm I am just looking at houses in my area and the cheapest so i do not have to get a mortgage etc. I can buy… Read More
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2m, 2w agoPosted 2 months, 2 weeks ago
I have some savings and considering buying a property and to rent it out as an investment, atm I am just looking at houses in my area and the cheapest so i do not have to get a mortgage etc. I can buy outright without a mortgage. Any landlords got advice? or anybody who knows a thing or two about buy to let...any advice/help much appreciated thank you
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2m, 2w agoPosted 2 months, 2 weeks ago
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#1
How much are you looking to put towards the actual house price?
#2
You have to weigh up the pros and cons. Interest rates are terrible so if your in the situation you can buy especially without a mortgage I would go for it. Here's a little explanation about the yield, if you pay around with the figures it might help you figure out if it's worth it.
http://www.thisismoney.co.uk/money/buytolet/article-3097699/How-work-rental-yield-buy-let-investment.html
#3
You may want to consider the new laws coming in to play for landlords this April. Some would be in your favour and some not so.
i) After April you would have to pay additional stamp-duty when buying a second home. The other change may seem not to effect you but it may put you in a stronger position. Currently tax relief can be claimed on the interest but after April this will change. This should not make any obvious difference to you but some landlords may start off loading property as they would not be getting the returns they expected especially if the interest on the mortgagee is large. This could make prices drop. You would need to decide for yourself whether you feel the drop be beneficial against the stamp duty. The stamp duty or tax relief do not apply if you have 15 or more properties. https://www.gov.uk/government/news/changes-to-tax-relief-for-residential-landlords
#4
It's going to take a long time to make profit and be careful of the cheaper ones.....just watch homes under the hammer
#5
Depends which area and how much you have to invest.
After Brexit demand for rent will fall sharply, so the rent prices. And interest rates will rise soon.
#6
why will demand for rent fall after brexit? don't get that. people will still need houses to live in.
#7
You already have to pay higher rate stamp duty on a second home, that came in last April, not this April. Probably about an extra 3% but depends on the purchase price. Interest rates are low so if you can get a mortgage the you will make more renting a larger property than you'll pay out in mortgage costs. Plus say if property prices keep rising at the same (Nothing indicates a housing crash on the horizon) then a you'll be making more on a higher cost house. BUT, rather than take advice from us you really should see a financial advisor, there may be better ways to invest your money.
#8
t3rm3y
why will demand for rent fall after brexit? don't get that. people will still need houses to live in.

Many foreigners moves out of UK, and thats a fact. Even now it is not attractive to look for work-Norway is best place now with highest pay rates and good Krona-Euro exchange rates. You will see, just read this message 4-5 years later...
#9
Shove the money into ZOPA and get 3.7% and none of the hassle. OK, you miss the capital (potential) growth, which is not that great outside of London. And you miss the joy of calling in the High Court enforcers when the tenant doesn't pay the rent for a year. I'm not saying that property shouldn't be a part of a balanced portfolio, but the easy picking days of the last decade are gone, for all the reasons stated above. I have a couple of friends who between them own about 10 properties. One has sold the lot, the other has sold all bar one.
#10
Rimi
t3rm3y
why will demand for rent fall after brexit? don't get that. people will still need houses to live in.
Many foreigners moves out of UK, and thats a fact. Even now it is not attractive to look for work-Norway is best place now with highest pay rates and good Krona-Euro exchange rates. You will see, just read this message 4-5 years later...

It isn't fact until it's been proven to be true. As Brexit hasn't happened yet, all you are stating is speculation.
#11
Interest only buy to let mortgages are worth looking into. Put down your deposit, get good returns for 20 years or so, then sell the property to pay the bank back and recover your deposit.
#12
I've just purchased my first buy to let, even with paying additional tax and stamp duty I'm not losing anything. I did buy a 4 bed town house that needs a little tlc but have tenants who want a long term arrangement plus who are happy to pay a little less whilst I do work round them. Less tax relief coming up but makes no odds in my situation as I paid a healthy deposit plus got a low rate interest only mortgage


Edited By: choc1969 on Feb 02, 2017 21:35: Addition
#13
RuudBullit
Rimi
t3rm3y
why will demand for rent fall after brexit? don't get that. people will still need houses to live in.
Many foreigners moves out of UK, and thats a fact. Even now it is not attractive to look for work-Norway is best place now with highest pay rates and good Krona-Euro exchange rates. You will see, just read this message 4-5 years later...
It isn't fact until it's been proven to be true. As Brexit hasn't happened yet, all you are stating is speculation.

I am working with many big international companies and I know whats going to happen.
Also, I know many working class immigrants here and I know their plans. So yes, nobody can predict future in all 100%, but you can foreseen something.
#14
Westwoodo
It's going to take a long time to make profit and be careful of the cheaper ones.....just watch homes under the hammer
Normally a 5%+ yield plus property rises above interest so not bad at all.
Sure beats secured savings account around at the moment.
#15
choc1969
I've just purchased my first buy to let, even with paying additional tax and stamp duty I'm not losing anything. I did buy a 4 bed town house that needs a little tlc but have tenants who want a long term arrangement plus who are happy to pay a little less whilst I do work round them. Less tax relief coming up but makes no odds in my situation as I paid a healthy deposit plus got a low rate interest only mortgage


Can I ask What area did you buy that in?
#16
Rimi
RuudBullit
Rimi
t3rm3y
why will demand for rent fall after brexit? don't get that. people will still need houses to live in.
Many foreigners moves out of UK, and thats a fact. Even now it is not attractive to look for work-Norway is best place now with highest pay rates and good Krona-Euro exchange rates. You will see, just read this message 4-5 years later...
It isn't fact until it's been proven to be true. As Brexit hasn't happened yet, all you are stating is speculation.
I am working with many big international companies and I know whats going to happen.
Also, I know many working class immigrants here and I know their plans. So yes, nobody can predict future in all 100%, but you can foreseen something.
What will the crash/fall happen?
#17
Made a fair bit out of property this past 20 years.

All I can tell you now is that I wouldn't touch it with a barge pole.

Market is overheated.

Loads of amateur landlords about to get stung by new rules they don't understand this year.

Brexit seeing London prices slide.

**** all wage growth and interest rates on the floor.

Honestly, the only way for property isn't up at the moment.

It's your money at the end of the day, but there are way way easier - and safer - ways to make an extra £500 a month.
#18
Don't do it,Don't add to the degeneracy of this Landlord culture, The Kirsty and Phil's should be banned off Tv,Most Landlords should be forced to sell their properties and be taxed on any profits, There has been a deliberate supply problem and a deliberate increased enforced bod problem from the EU in this increasingly degenerate run country and all for the banking theft through over inflated mortgage price Grabs which has been driven way above what it should be by supply and demand especially in or around London or university towns. Most scum politicians are high end Landlords in or around London and university towns so Wake up people you are all being shafted in this modern Capitalist market created by Elites for the very Few.
#19
Rimi
RuudBullit
Rimi
t3rm3y
why will demand for rent fall after brexit? don't get that. people will still need houses to live in.
Many foreigners moves out of UK, and thats a fact. Even now it is not attractive to look for work-Norway is best place now with highest pay rates and good Krona-Euro exchange rates. You will see, just read this message 4-5 years later...
It isn't fact until it's been proven to be true. As Brexit hasn't happened yet, all you are stating is speculation.

I am working with many big international companies and I know whats going to happen.
Also, I know many working class immigrants here and I know their plans. So yes, nobody can predict future in all 100%, but you can foreseen something.


So, it's not a fact then? Thought you said it was a fact?
#20
Dont you ever watch cant pay and we'll take it away? Could you afford to have some tramp move in and not pay rent for a year and then spend thousands trying to evict them...not to mention the cost of repairs.
#21
It isn't as straightforward a cash cow as you may think. I own two houses, one I live in and one is rented out. My tenants are fantastic but if anything goes wrong it is my responsibility to get it fixed. At the moment the boiler is making a funny noise. I've been round twice with my heating engineer and we haven't heard anything so I'm fairly sure it isn't massive but I wouldn't like to live with that situation. The boiler is 16 years old so my dilemma now is do I replace that at a cost of £2k or do I spend that money on a holiday for myself and my son. I've already spent £850 on replacing the fence so much of the profit for the year will be wiped out if I replace the boiler
#22
choc1969
I've just purchased my first buy to let, even with paying additional tax and stamp duty I'm not losing anything. I did buy a 4 bed town house that needs a little tlc but have tenants who want a long term arrangement plus who are happy to pay a little less whilst I do work round them. Less tax relief coming up but makes no odds in my situation as I paid a healthy deposit plus got a low rate interest only mortgage
I'm not 100% sure of the situation now but if you have or had tenants in the property and are undertaking work it is tax deductible so depending on the work could be very worthwhile renting it out at a lower value whist you do the work.
#23
psychobitchfromhell
It isn't as straightforward a cash cow as you may think. I own two houses, one I live in and one is rented out. My tenants are fantastic but if anything goes wrong it is my responsibility to get it fixed. At the moment the boiler is making a funny noise. I've been round twice with my heating engineer and we haven't heard anything so I'm fairly sure it isn't massive but I wouldn't like to live with that situation. The boiler is 16 years old so my dilemma now is do I replace that at a cost of £2k or do I spend that money on a holiday for myself and my son. I've already spent £850 on replacing the fence so much of the profit for the year will be wiped out if I replace the boiler
Exactly.

People often forget to factor in tax and maintenance when they invest in property.

(For what it's worth, surely you're better off replacing the boiler now before the new rules on claimable deductions come into force this year? You're really only robbing yourself longterm if you leave it.)


Edited By: CaptainSocks on Feb 03, 2017 10:18
#24
CaptainSocks
psychobitchfromhell
It isn't as straightforward a cash cow as you may think. I own two houses, one I live in and one is rented out. My tenants are fantastic but if anything goes wrong it is my responsibility to get it fixed. At the moment the boiler is making a funny noise. I've been round twice with my heating engineer and we haven't heard anything so I'm fairly sure it isn't massive but I wouldn't like to live with that situation. The boiler is 16 years old so my dilemma now is do I replace that at a cost of £2k or do I spend that money on a holiday for myself and my son. I've already spent £850 on replacing the fence so much of the profit for the year will be wiped out if I replace the boiler
Exactly.
People often forget to factor in tax and maintenance when they invest in property.
(For what it's worth, surely you're better off replacing the boiler now before the new rules on claimable deductions come into force this year? You're really only robbing yourself longterm if you leave it.)
That is the dilemma. The point is you need to have a fair wodge of spare cash, it's more than just the cost of the property you need to factor in.
#25
CaptainSocks
Made a fair bit out of property this past 20 years.
All I can tell you now is that I wouldn't touch it with a barge pole.
Market is overheated.
Loads of amateur landlords about to get stung by new rules they don't understand this year.
Brexit seeing London prices slide.
**** all wage growth and interest rates on the floor.
Honestly, the only way for property isn't up at the moment.
It's your money at the end of the day, but there are way way easier - and safer - ways to make an extra £500 a month.
Like what

make an extra £500 a month.
#26
MarioMan
CaptainSocks
Made a fair bit out of property this past 20 years.
All I can tell you now is that I wouldn't touch it with a barge pole.
Market is overheated.
Loads of amateur landlords about to get stung by new rules they don't understand this year.
Brexit seeing London prices slide.
**** all wage growth and interest rates on the floor.
Honestly, the only way for property isn't up at the moment.
It's your money at the end of the day, but there are way way easier - and safer - ways to make an extra £500 a month.
Like what
make an extra £500 a month.
Well, as the OP says they'd be mortgage free, I presume that means they have capital spare like me.

You can get 3% interest via a fair few banks if you look about, or try P2P lending if you want closer to 7% return.

A good property will net you about 10% yield of course, but that wouldn't factor in the costs of tax, maintenance, agents and voids, which realistically drag it back down to around 5-7%. (This can be A LOT worse - a mate of mine had a boiler go, a roof go, and the windows go within the space of a few years. About 40K worth of issues all in. That'll be why the place he "invested" in was cheap. Ended up having to sell it on for a big loss as he couldn't cover that).

Tbh there's often deals on here that you can make far greater returns on as well if you're game.

With property the real money is to be made with House Price Inflation or fixing property up.

When I factored in the time I was spending fixing up property it quickly became apparent I'd actually be better off just doing that work for other people - okay I was making a profit in the end, but my hourly rate was pathetic compared to what I could charge someone else.

Also, it's too much of a gamble for me to assume houses will rise significantly in value now (against the possibility they'll drop) so I got out.

I've still got a few properties overseas, but again I wouldn't advise anyone invest like that now the pound has tanked and unless they know the area/country they're buying in really really well.








Edited By: CaptainSocks on Feb 03, 2017 13:42: Error
#27
CaptainSocks
MarioMan
CaptainSocks
Made a fair bit out of property this past 20 years.
All I can tell you now is that I wouldn't touch it with a barge pole.
Market is overheated.
Loads of amateur landlords about to get stung by new rules they don't understand this year.
Brexit seeing London prices slide.
**** all wage growth and interest rates on the floor.
Honestly, the only way for property isn't up at the moment.
It's your money at the end of the day, but there are way way easier - and safer - ways to make an extra £500 a month.
Like what
make an extra £500 a month.
Well, as the OP says they'd be mortgage free, I presume that means they have capital spare like me.
You can get 3% interest via a fair few banks if you look about, or try P2P lending if you want closer to 7% return.
A good property will net you about 10% yield of course, but that wouldn't factor in the costs of tax, maintenance, agents and voids, which realistically drag it back down to around 5-7%. (This can be A LOT worse - a mate of mine had a boiler go, a roof go, and the windows go within the space of a few years. About 40K worth of issues all in. That'll be why the place he "invested" in was cheap. Ended up having to sell it on for a big loss as he couldn't cover that).
Tbh there's often deals on here that you can make far greater returns on as well if you're game.
With property the real money is to be made with House Price Inflation or fixing property up.
When I factored in the time I was spending fixing up property it quickly became apparent I'd actually be better off just doing that work for other people - okay I was making a profit in the end, but my hourly rate was pathetic compared to what I could charge someone else.
Also, it's too much of a gamble for me to assume houses will rise significantly in value now (against the possibility they'll drop) so I got out.
I've still got a few properties overseas, but again I wouldn't advise anyone invest like that now the pound has tanked and unless they know the area/country they're buying in really really well.


What overseas countries?
#28
MarioMan
CaptainSocks
MarioMan
CaptainSocks
Made a fair bit out of property this past 20 years.
All I can tell you now is that I wouldn't touch it with a barge pole.
Market is overheated.
Loads of amateur landlords about to get stung by new rules they don't understand this year.
Brexit seeing London prices slide.
**** all wage growth and interest rates on the floor.
Honestly, the only way for property isn't up at the moment.
It's your money at the end of the day, but there are way way easier - and safer - ways to make an extra £500 a month.
Like what
make an extra £500 a month.
Well, as the OP says they'd be mortgage free, I presume that means they have capital spare like me.
You can get 3% interest via a fair few banks if you look about, or try P2P lending if you want closer to 7% return.
A good property will net you about 10% yield of course, but that wouldn't factor in the costs of tax, maintenance, agents and voids, which realistically drag it back down to around 5-7%. (This can be A LOT worse - a mate of mine had a boiler go, a roof go, and the windows go within the space of a few years. About 40K worth of issues all in. That'll be why the place he "invested" in was cheap. Ended up having to sell it on for a big loss as he couldn't cover that).
Tbh there's often deals on here that you can make far greater returns on as well if you're game.
With property the real money is to be made with House Price Inflation or fixing property up.
When I factored in the time I was spending fixing up property it quickly became apparent I'd actually be better off just doing that work for other people - okay I was making a profit in the end, but my hourly rate was pathetic compared to what I could charge someone else.
Also, it's too much of a gamble for me to assume houses will rise significantly in value now (against the possibility they'll drop) so I got out.
I've still got a few properties overseas, but again I wouldn't advise anyone invest like that now the pound has tanked and unless they know the area/country they're buying in really really well.
What overseas countries?
Greece.

Well Crete.

Waterside (Ag Nic) and one in the mountains.

Not really investments. Just have Greek family. Although I've done pretty well from Brexit I suppose, if I was to decide to flog them now.

Which I won't. Because the family/extended family use them pretty regularly.

Why do you ask? Thinking of investing somewhere?
#29
MarioMan
choc1969
I've just purchased my first buy to let, even with paying additional tax and stamp duty I'm not losing anything. I did buy a 4 bed town house that needs a little tlc but have tenants who want a long term arrangement plus who are happy to pay a little less whilst I do work round them. Less tax relief coming up but makes no odds in my situation as I paid a healthy deposit plus got a low rate interest only mortgage
Can I ask What area did you buy that in?

In Weston-Super-Mare; my tenants work in the old age care industry so will never be out of work lol X)
#30
Done right it is still a decent long term investment especially if buying outright so a lot of the new tax law implications won't affect you (apart from stamp duty). Much depends on the area though so do your sums as buy to let e.g. in central London would not be very profitable (and possibly more risky in the event of a price drop) but other cities/towns would be. If you buy and move into a another property then let yours you would pay less stamp duty and no CGT down the line when you sell also.

Rimi
RuudBullit
Rimi
t3rm3y
why will demand for rent fall after brexit? don't get that. people will still need houses to live in.
Many foreigners moves out of UK, and thats a fact. Even now it is not attractive to look for work-Norway is best place now with highest pay rates and good Krona-Euro exchange rates. You will see, just read this message 4-5 years later...
It isn't fact until it's been proven to be true. As Brexit hasn't happened yet, all you are stating is speculation.
I am working with many big international companies and I know whats going to happen.
Also, I know many working class immigrants here and I know their plans. So yes, nobody can predict future in all 100%, but you can foreseen something.

LOL Mystic Meg "I am working with many big international companies and I know whats going to happen" X)

Who cares what the krona/euro rate is doing we use the pound remember ? If you paid any attention to the news you would see the PM is guaranteeing the rights of EU citizens to stay in the UK so there will be no massive outflux of foreign workers and house price crashes. Nobody knows exactly what will happen post A50, it will be a bumpy road I'm sure but remember Project fear - that didn't happen did it.
#31
pookey1
You have to weigh up the pros and cons. Interest rates are terrible so if your in the situation you can buy especially without a mortgage I would go for it. Here's a little explanation about the yield, if you pay around with the figures it might help you figure out if it's worth it.
http://www.thisismoney.co.uk/money/buytolet/article-3097699/How-work-rental-yield-buy-let-investment.html



interest rates are terrible? borrowing rates are low!
#32
choc1969
MarioMan
choc1969
I've just purchased my first buy to let, even with paying additional tax and stamp duty I'm not losing anything. I did buy a 4 bed town house that needs a little tlc but have tenants who want a long term arrangement plus who are happy to pay a little less whilst I do work round them. Less tax relief coming up but makes no odds in my situation as I paid a healthy deposit plus got a low rate interest only mortgage
Can I ask What area did you buy that in?
In Weston-Super-Mare; my tenants work in the old age care industry so will never be out of work lol X)

Good you have good tennents!

Could I ask

How much did you buy a house in that area for?
Size 3 bedroom? 4 etc?
The average monthly wage?

Cheers
#33
tallpete33
Done right it is still a decent long term investment especially if buying outright so a lot of the new tax law implications won't affect you (apart from stamp duty). Much depends on the area though so do your sums as buy to let e.g. in central London would not be very profitable (and possibly more risky in the event of a price drop) but other cities/towns would be. If you buy and move into a another property then let yours you would pay less stamp duty and no CGT down the line when you sell also.

Rimi
RuudBullit
Rimi
t3rm3y
why will demand for rent fall after brexit? don't get that. people will still need houses to live in.
Many foreigners moves out of UK, and thats a fact. Even now it is not attractive to look for work-Norway is best place now with highest pay rates and good Krona-Euro exchange rates. You will see, just read this message 4-5 years later...
It isn't fact until it's been proven to be true. As Brexit hasn't happened yet, all you are stating is speculation.
I am working with many big international companies and I know whats going to happen.
Also, I know many working class immigrants here and I know their plans. So yes, nobody can predict future in all 100%, but you can foreseen something.

LOL Mystic Meg "I am working with many big international companies and I know whats going to happen" X)

Who cares what the krona/euro rate is doing we use the pound remember ? If you paid any attention to the news you would see the PM is guaranteeing the rights of EU citizens to stay in the UK so there will be no massive outflux of foreign workers and house price crashes. Nobody knows exactly what will happen post A50, it will be a bumpy road I'm sure but remember Project fear - that didn't happen did it.






Please can you explain the "no CGT down the line" comment you made? We are just about to complete on selling a property we bought 17 years ago which was our home and which we moved on from about 10 years ago but kept it to rent it out. On looking through the HMRC website it seems we do have to pay CGT on the years we haven't lived there for, so if you know a way to avoid this then I would be very interested! Thank you for any help!
#34
nhoops
tallpete33
Done right it is still a decent long term investment especially if buying outright so a lot of the new tax law implications won't affect you (apart from stamp duty). Much depends on the area though so do your sums as buy to let e.g. in central London would not be very profitable (and possibly more risky in the event of a price drop) but other cities/towns would be. If you buy and move into a another property then let yours you would pay less stamp duty and no CGT down the line when you sell also.
Rimi
RuudBullit
Rimi
t3rm3y
why will demand for rent fall after brexit? don't get that. people will still need houses to live in.
Many foreigners moves out of UK, and thats a fact. Even now it is not attractive to look for work-Norway is best place now with highest pay rates and good Krona-Euro exchange rates. You will see, just read this message 4-5 years later...
It isn't fact until it's been proven to be true. As Brexit hasn't happened yet, all you are stating is speculation.
I am working with many big international companies and I know whats going to happen.
Also, I know many working class immigrants here and I know their plans. So yes, nobody can predict future in all 100%, but you can foreseen something.
LOL Mystic Meg "I am working with many big international companies and I know whats going to happen" X)
Who cares what the krona/euro rate is doing we use the pound remember ? If you paid any attention to the news you would see the PM is guaranteeing the rights of EU citizens to stay in the UK so there will be no massive outflux of foreign workers and house price crashes. Nobody knows exactly what will happen post A50, it will be a bumpy road I'm sure but remember Project fear - that didn't happen did it.
Please can you explain the "no CGT down the line" comment you made? We are just about to complete on selling a property we bought 17 years ago which was our home and which we moved on from about 10 years ago but kept it to rent it out. On looking through the HMRC website it seems we do have to pay CGT on the years we haven't lived there for, so if you know a way to avoid this then I would be very interested! Thank you for any help!

Sorry, I think I worded that wrongly and yes you most likely would need to pay CGT on those years unless you flipped your primary residence like a back bench MP. I would definitely take professional advice to see how it can be minimised without going all Gary Barlow.


Edited By: tallpete33 on Feb 04, 2017 19:48: typo

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