General advice on buy-to-let

[jordan]

Hi all,

I am interested in going into buy-to-let as a financial investment, and am trying to get some overall idea of how to go about it, by asking as many people as possible.

I have heard that it is a good idea to buy properties in what is generally considered to be a "good area", and to steer well clear of the sorts of area where people might have some sort of trepidation about living.

Also, I hear that it is important to renovate and decorate the property to a reasonable standard, but without overdoing it, i.e.: not overspending, not doing the property up to one's own taste.

The areas of interest to me are London and Leeds, both areas where there is a high demand for property to let.

I'm looking forward to learning something on this forum.
Thanks

[jason]

Hello Jordan,
I would suggest looking in the paper/ on the net to see which neighbourhoods are in transition. There is always 1 or two neighbourhoods that are becoming hot spots....and more and more people are coming to see.

If you find out where new business are sprouting out more and more. That would also be a good sign of a place to invest.
Thank you

[landlordmortgages]

Always best to walk the streets....you will soon get a feel for the area. Most of our landlords invest close to home and buy properties that need superficial improvements such as painting and decorating AND new kitchen and bathroom or bathrooms.

Lee

[vngrape]

You could also invest in a building near colleges and universities and turn it into apartments or dormitories. That way you could make sure that you'll have a continuous supply of tenants. Then maybe you could turn the ground floor of the building into some sort of food establishment that sells cheap food for students. That's two businesses in one property.

[fws]

Be careful with Leeds. There is an awful lot of rental property out there and rents will not necessarily cover the mortgage.

[eyeC]

its all about cash flow money in and money out monthly
think about how much the real cost of owning the property maintance fees, taxes,one month without rent till you get your first tenant,think about managing the place if u live away or abroad paying someone to collect your rent and thats another month of rent gone,think about insurance,think about repairs every 3 years on the other side you have rent coming in if there are ppl willling to rent your property take away from the rent the profit you give to the bank intrest rate take away depreciation of the property
do all the math and you get the real picture
is it worth it??yes if you know what you doing otherwise stay away
and one more thing i forgot your tenant might not pay after few months e.g students
good luck

[ryanjohns]

would have to agree you'd want to be carefull of leeds, there is alot of property there to let, especially city centre. London is a good option if you can afford to sit on property with a low yield and go for strictly capital gains.

Otherwise I like scotland - largs, north ayrshire is a nice place.

ryan.

[raubin]

Bristol is an excellent opportunity for property investment, all the dock side factories and storage are quickly turning into beautiful apartments looking over the dock.

With all the university students and the rich scene down there - it's a great place to look at, the prices for rent are unbelievable.

Manchester is another hot spot at the moment.

[OFS Spain]

I know a few portolio owners who are buying up property in Manchester and renting to the local authority for asylum seekers.

The council will guarantee rent for 5 years plus voids.

Worth looking into.

Edinburgh is another place, i believe the council give you an incentive to use your property and also guarantee rent plus voids.

Once they are done with your property its written in contract that they will decorate your property back to its original state. (just in case you get some mad folk renting and they trash the place)

[NIC356]

Jordon,

I think buy to let is a great way to build a good residual income, my only caution would be to make sure you get your numbers right if you are buying buy to let property, so if the worst did happen and say you lose your job or ill health or whatever you know your property's income will cover your mortgage and some. I use the 'Buy to Let Investment Property Calculator' from makedigital.com and look for properties that i can spend a small amount on refurbishing to help me build some strong margin into any purchase I make.

I'm a bit of a fan of Ajay Ahuja's theory of buy to let investment which focuses on an income stream not captial gain. This mostly only happens when sourcing property in Scotland.

Hope this helps.