Singing Pig

At the moment we have a number of investment properties which are due for completion in the next 6 weeks. Some of these properties have 20% or more discount from market value. We also have a number of units which are two years or more off plan with discounts ranging from 15-20% from current market value. Some deals include rental guarantees, furniture packages,carpets etc. We can also manage your property and ensure you have a hassle free investment.
Contact me for furthur details:- info@plotswithplanning.co.uk
Ian Lyons mobile 078777 54021
office 0151 207 9253

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Hi Jane,

Go on a one day course or buy a good manual (as recomended elsewhere on SP). This is quite a serious Business. I mean just charging in without any study at all is asking for trouble. I know you have friends who are doing this, but one day studying the risks and benefits is well worth it. Basically I am not trying to frighten you I am encouraging you to research so that you know exactly what numbers work. From this information you will be able to work out yourself where to go. A lot of it is common sense. You may come across 5 deals- you need to know which one is best IN THE LONG TERM. If you don't have a complete understanding of ALL the numbers you could select the wrong one.

Look at the future cash flows, if your doing buy to let. DONT get too excited about "discount to market value" or "instant equity" they are not Cash Flows.

If I have said anything you don't completely understand email me.

All the best

Anthony

dentonanth@googlemail.com

Massive:

Hello Jane,

You're right that some areas are becoming hard to reach with standard finance, but then you must remember that there's more to investment than simple rental yield.

If you're buying now, London yield is atrocious, yet I'm London through and through.  Demand is high, and capital growth will remain strong in the city - but London is a market unto itself.  Elsewhere in the UK rental figures may stack up more to your advantage, but you're conversely at the mercy of national trends, and consequently risk stagnation of overall value and rental return.

In days gone by you could achieve excellent rental returns and respectable growth in value, but in the current economic climate, you're likely to have to choose between yield or capital gains.

It's no secret that I speculate for capital appreciation, so I'll always recommend London and the commuter belt.  But even so, this is a very broad generalisation, and meaningless if you're looking for specific investments.  In any area, you can walk a hundred yards down the road and enter a completely different environment.  Being essentially cashflow neutral is also a costly strategy that relies on a stream of independant income - but it does illustrate that there's more than one way to skin a cat.

I expect you already know the essentials - buy below market value, in an area of high demand, with rising values.  People must want to rent, and people must want to buy, both for very tangible reasons.  Do your reasearch exhaustively, know your market intimately, and pick your location very carefully.  Walk the ground, speak to people who know the area, assess local infrastructure and services.  Most importantly, look to the future - how will this place look in five years' time?  And in this climate of demand, you also have to find a bargain.  Put simply, don't aim to buy an asset, only to lumber yourself with a costly liability.

I'll also warn you to beware of the sharks - property is big business, and nobody's in it as a charity.  There are plenty that will assist you, but do your own ground work too.  If you leave yourself open to it, someone can and will fleece you - not only individuals, but apparently trustworthy companies are happy to make a fast buck from you too.

Do you have a particular sector in mind - high end or bargain basement, suburban houses or city apartments, new build or traditional period charm?

Regards

I understand what u say but could u help us narrow it down-where could u look at properties for around £50,000? How coul du find out? cheers

So much to think about when starting in this business, even with all the help here and from freinds in the biz

And what ever advice you are given, you really need to do what works for you

Rather than buy deals up and down the country and having various agents to deal for you, which will cost, I am looking in a very specific area. and concentrating on only a part of this area. The idea behind this is as follows

1) The abilty to control your stock

2) Never to far away if you need to deal with a situation

3) You will become known in the area as a buyer / seller / renter who does what they say they can, word of mouth (Good and bad) is a valuable thing to have

4) Good relationships with local trades etc

5) You will quickly become an expert in your area in terms of costs, deals etc, as the property you buy will be mostly the same type

Of course if a really good deal comes along that isnt in your area, take a look

Good luck 

I do agree with Julian to a degree - it is good to have an indepth knowledge about a particular market and area - BUT diversification means you spead the risk. Even what you see now as a no-brainer could with little warning become a liability.

For instance - about 10 years ago as our first venture we brought a couple of run down student houses in manchester for £25k (deposits down of 2k). We got local scallies! to patch them up for a few thousand pounds, put in cheap furniture and rented them out to 4 students, making a HUGE profit. Our mortgage was £200pcm, they paid £750pcm.

A great deal! We saved every penny we had, we viewed hundreds more, but we were guzumped, outbid, had emergency personal bills so ran out of money. Lucky, as it would happen.

As 2 years later major builders started building luxury student accomodation blocks. It seemed mad, students paying £85 a week to live in a bedsit instead of £45pw in our house. But, within 5 years pretty much all students now live in these nice trendy blocks.

Couple that with a few murders in that area of Manchester, HMO legislation which costs a fortune, the requirement for  luxurious housing and furniture, lack of cheap labour - these houses are pretty much unrentable except to the DSS where allowable rent is only £300pcm.

As for selling them, luckily we sold a few years ago for a very good profit, but people who didnt have seen these houses rise from £25k to £125k and recently unsellable at £50k.

Anway, my message is dont put all your eggs in one basket. You can never legislate for what might happen even if you become an 'expert' in one particular location/field.