The Year Of The Fox Posted 4 June 2012 Posted 4 June 2012 Anyone tried their hand at it? Did you suceed in making profit? Was it harder than you expected? If you're a current home owner, do you need a buy to let mortgage? Share your experiences!
Saxondale Posted 4 June 2012 Posted 4 June 2012 I've not done it but I know people who have. Yes, I believe you'll need a buy-to-let, which will require a good deposit. You can make profit if you can buy cheap enough and keep the costs of renovation low enough. Too many people think that, by buying a house and sticking in some laminate floor and a new kitchen, you can make money. A B&Q kitchen will not magically add £15k to the value of a house. Also consider buying and selling fees and mortgage fees etc. The best profit opportunity is buying mortgage repossessions. If you actually want to let it out rather than just sell quickly, look at similar houses and what they're going for on the rental market, then do the maths from that. I wouldn't expect much market growth in the next few years either.
davieG Posted 4 June 2012 Posted 4 June 2012 I've not done it but I know people who have. Yes, I believe you'll need a buy-to-let, which will require a good deposit. You can make profit if you can buy cheap enough and keep the costs of renovation low enough. Too many people think that, by buying a house and sticking in some laminate floor and a new kitchen, you can make money. A B&Q kitchen will not magically add £15k to the value of a house. Also consider buying and selling fees and mortgage fees etc. The best profit opportunity is buying mortgage repossessions. If you actually want to let it out rather than just sell quickly, look at similar houses and what they're going for on the rental market, then do the maths from that. I wouldn't expect much market growth in the next few years either. It depends on the circumstances if you're letting it then it's a whole different ball game, my son has a property he lets out and purposely fitted it out with B&Q standard fittings because there's a good chance they'll get broken no matter how much you spend on them, if it's a low priced house and rental fitting middle to high end stuff in there is complete waste of money. The advice he got from the letting agency was if renting keep your renovation costs to a minimum whilst matching the potential clientèle.
Saxondale Posted 4 June 2012 Posted 4 June 2012 It depends on the circumstances if you're letting it then it's a whole different ball game, my son has a property he lets out and purposely fitted it out with B&Q standard fittings because there's a good chance they'll get broken no matter how much you spend on them, if it's a low priced house and rental fitting middle to high end stuff in there is complete waste of money. The advice he got from the letting agency was if renting keep your renovation costs to a minimum whilst matching the potential clientèle. No, absolutely I agree. My point was not about spending too little on renovation, the opposite in fact. What I'm getting at is that by slapping in a new kitchen and/or bathroom, you're not going to magically increase the value of the house by thousands.
davieG Posted 4 June 2012 Posted 4 June 2012 No, absolutely I agree. My point was not about spending too little on renovation, the opposite in fact. What I'm getting at is that by slapping in a new kitchen and/or bathroom, you're not going to magically increase the value of the house by thousands. I realised after I'd posted that you were talking about buying to sell so yeah we're in agreement.
THEFATBASTARD Posted 4 June 2012 Posted 4 June 2012 I have done it on and off for many years...I currently let 7 properties, (im not trying to brag, its just the facts)...my mate owns 120 houses ..so im small beer ..doing houses up and letting them to people is probably the most satisfying meaningful thing I have ever really done.I did an apprenticeship in enigineering cos my dad wanted me to..but it wasn't really me..so by accident I did my first development in bournemouth and never looked back..I got into it big time during the sarah beeny era, pre 2007, i actually bought a three bed without going in it...madness looking back! im pretty good at DIY, and enjoy creating a nice place to live,. Don't forget ! tenants are a reflection of society good and bad, ive had some sleepless nights wondering if I would get a phone call telling me one of the houses has been burnt down. The truth is though if the banks were still lending,,i would still be buying, having control over a project and working for yourself can't be beaten..fact!
Mack Posted 4 June 2012 Posted 4 June 2012 The bandwagon for this game has long since passed. If you aren't already in possession of several properties then it's too late.
The Year Of The Fox Posted 4 June 2012 Author Posted 4 June 2012 The bandwagon for this game has long since passed. If you aren't already in possession of several properties then it's too late. Why? When most people agree that now is the time to buy again (though I know prices will never be as low as they were nor never get as high as they were)
davieG Posted 4 June 2012 Posted 4 June 2012 The bandwagon for this game has long since passed. If you aren't already in possession of several properties then it's too late. My lad bought his first property last summer and it's been rented out since the new year
Mack Posted 4 June 2012 Posted 4 June 2012 Why? When most people agree that now is the time to buy again (though I know prices will never be as low as they were nor never get as high as they were) Because we will never ever see the massive price rises we did not so many years ago. House prices will remain static / reduce slightly for the foreseeable years ahead. In addition unless you have substantial capital to borrow against you wont get a mortgage unless you are on some seriously large salary. The margin from buying price ... doing up the property... then selling has been squeezed and the property wont raise in value while it's sitting. I also know some property developers, and if you are in London / selected South East regions you can still make money but beyond there's no money in it. Someone renting out their house to pay off the mortgage is not property developing, it's covering your debt with a tenant, to become a property developer you need to be able to buy.. develop.. then sell for profit and move onto the next bigger and better property. You cant borrow against debt, you need capital.
davieG Posted 4 June 2012 Posted 4 June 2012 Because we will never ever see the massive price rises we did not so many years ago. House prices will remain static / reduce slightly for the foreseeable years ahead. In addition unless you have substantial capital to borrow against you wont get a mortgage unless you are on some seriously large salary. The margin from buying price ... doing up the property... then selling has been squeezed and the property wont raise in value while it's sitting. I also know some property developers, and if you are in London / selected South East regions you can still make money but beyond there's no money in it. Someone renting out their house to pay off the mortgage is not property developing, it's covering your debt with a tenant, to become a property developer you need to be able to buy.. develop.. then sell for profit and move onto the next bigger and better property. You cant borrow against debt, you need capital. So you can't have a mix of properties where you rent when the rental market is buoyant and the selling market is stagnant, like now and when the market changes you sell off some of the more marketable properties. I don't believe for one minute that house prices wont go up significantly again they've been yoyoing for decades but have always ended up increasing.
MooseBreath Posted 4 June 2012 Posted 4 June 2012 Why? When most people agree that now is the time to buy again (though I know prices will never be as low as they were nor never get as high as they were) I don't think you can be sure of any of the three points you've made here. First of all I think most respectable predictions of where house prices are going say things are likely to remain stagnant for the most part. Secondly it's perfectly reasonable to suggest prices may go as low as they were a couple of years ago and much lower. All it will take is a serious drop in the value of the pound and we'll suffer mass emmigration, reducing demand and prices will plummet. Lastly you really ought to hope that prices will one day return to where they were pre-2007. I definitely wouldn't be getting into property if I thought prices were never going to rise again.
THEFATBASTARD Posted 4 June 2012 Posted 4 June 2012 The truth is, in the long run inflation will mean houses prices like all other commodities will climb, raw materials, labour costs and land prices tend to rise over time...the law of supply and demand comes into play..there is a chronic housing shortage (no council propery being built) ..people will not put their lives on hold forever...but the surpression of house prices is down to the shortage of money to lend rather than over supply of properties..this cannot go on forever..
The Year Of The Fox Posted 4 June 2012 Author Posted 4 June 2012 Because we will never ever see the massive price rises we did not so many years ago. House prices will remain static / reduce slightly for the foreseeable years ahead. In addition unless you have substantial capital to borrow against you wont get a mortgage unless you are on some seriously large salary. The margin from buying price ... doing up the property... then selling has been squeezed and the property wont raise in value while it's sitting. I also know some property developers, and if you are in London / selected South East regions you can still make money but beyond there's no money in it. Someone renting out their house to pay off the mortgage is not property developing, it's covering your debt with a tenant, to become a property developer you need to be able to buy.. develop.. then sell for profit and move onto the next bigger and better property. You cant borrow against debt, you need capital. This was something I wanted to know. if wanting to buy another property by what you say, it cannot be added (partly) to your current mortgage? Surely though given the recent climate it'd be better to invest in a house and tenant and then end up with the mortgage being paid off, as opposed to relying on pensions etc when retiring?
MooseBreath Posted 4 June 2012 Posted 4 June 2012 The truth is, in the long run inflation will mean houses prices like all other commodities will climb, raw materials, labour costs and land prices tend to rise over time...the law of supply and demand comes into play..there is a chronic housing shortage (no council propery being built) ..people will not put their lives on hold forever...but the surpression of house prices is down to the shortage of money to lend rather than over supply of properties..this cannot go on forever.. I think there's a real risk of our population beginning to decline in the next couple of decades. If that happens then current prices could be shown to be hugely overvalued.
jonthefox Posted 4 June 2012 Posted 4 June 2012 This was something I wanted to know. if wanting to buy another property by what you say, it cannot be added (partly) to your current mortgage? Surely though given the recent climate it'd be better to invest in a house and tenant and then end up with the mortgage being paid off, as opposed to relying on pensions etc when retiring? I don't think it can. Remember, the hard part is finding the hefty deposit.
davieG Posted 4 June 2012 Posted 4 June 2012 This was something I wanted to know. if wanting to buy another property by what you say, it cannot be added (partly) to your current mortgage? Surely though given the recent climate it'd be better to invest in a house and tenant and then end up with the mortgage being paid off, as opposed to relying on pensions etc when retiring? My son had to find approx 33% of the price but it's a separate mortgage to his home one.
The Year Of The Fox Posted 4 June 2012 Author Posted 4 June 2012 I don't think it can. Remember, the hard part is finding the hefty deposit. As far as I know its typically 25% for a buy to let mortgage. But on a standard mortage most still only ask for 10%. Now I dunno if all you lot live in Windsor or somewhere but around Doleville you're talking about £7k for a mid terrace requiring work. Not a massive amount by any stretch when considering doing it with a partner. And Natwest enable you to rent out on a standard mortgage after paying a couple of hundred for them to do their searches. In other words you don't really need to have a buy to let mortgage if you go with them.
THEFATBASTARD Posted 4 June 2012 Posted 4 June 2012 I think there's a real risk of our population beginning to decline in the next couple of decades. If that happens then current prices could be shown to be hugely overvalued. Decades? well i will be in the happy hunting grounds by then....this country is in excess of a million dwellings short of demand..the construction rate is less than 200,000 a year, the population is scheduled to rise to well over 70 million on the last government stats..the birth rate in lets say leicester is going up...ref: the royal maternity is over capacity.. and as the old saying goes...land in this country..they are not making anymore of it.
Mack Posted 4 June 2012 Posted 4 June 2012 This was something I wanted to know. if wanting to buy another property by what you say, it cannot be added (partly) to your current mortgage? Surely though given the recent climate it'd be better to invest in a house and tenant and then end up with the mortgage being paid off, as opposed to relying on pensions etc when retiring? Pardon me for being thick, but if you are going to rent out your one and only property where will you live?
The Year Of The Fox Posted 4 June 2012 Author Posted 4 June 2012 Pardon me for being thick, but if you are going to rent out your one and only property where will you live? I was talking about a second home.
vandamman Posted 4 June 2012 Posted 4 June 2012 If you have iniative and vision I think good money can still be made in this business. There is real drive amongst local councils to bring abandoned and derelict buildings back into use and are prepared to part fund projects as a way to solve the housing shortage. There is a company called UrbanSplash, they started off small - I believe they bought a particular site for a '£1' and are now worth 100's millions, specialising in developing disused industrial sites. Although this is not appropriate for the average budding property developer but shows that money can be made when you think outside the box.
cambridgefox Posted 4 June 2012 Posted 4 June 2012 Not done it myself but my mum and dad when he was alive bought a second property in Burnham Market Norfolk ,as a second property and made 200k on it!
jonthefox Posted 4 June 2012 Posted 4 June 2012 Ive been wondering about this now. Is it possible to remortgage your existing property to buy a second one?.
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