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  • Buy-to-Let

    £120k to invest

    Hi, a little about me. I'm 28 and having saved and made a few investments in the last few years I've managed to save £120k that I am looking to start a property portfolio with.

    i am currently unemployed after finishing working at sea, and this will be my only source of income.

    i will be living in London, but will be looking to invest nationwide, wherever is providing the best yields. And would therefore be happy with paying to have the properties managed.

    My questions are, how would you put that money to use? Will it be difficult to gain finance in my position (I don't own my own property by the way)?

    Would it make sense to run everything through a limited company?

    How long would you expect it to take to be able to live of the income of the portfolio? (£30kpa is enough for me) I am happy to work other jobs and won't have problem finding them for however long this will take.

    Appreciate any replies, this website has been a great source of info so far

    Cheers

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    First  things first

    Do you have a residential  house?

    If not get one

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    Hi, thanks for the reply.

    Problem is im looking at this being my only source of income, so may be hard to get the mortgage without the income first.

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    Hi Dave,

    Welcome to the tribe.

    You may struggle to buy your own home, due to not having an income.

    With £120K cash, you would be well-placed to buy a property at a discount, add value through refurbishment, and then let out.  You could then use a BTL mortgage to redeem some of your cash.

    However, it will be a challenge to do that in an area you don't know, and I would be very careful about giving your hard-earned cash to a third party to source and renovate a property for you.

    If I was in your shoes, the first thing I would be looking to do would be to get a job or start creating an income from a business.  Without a salary, you will struggle to get either a residential mortgage or a BTL mortgage.

    While you are getting established back in the UK, use that time to educate yourself about property by reading this forum and others, and attending landlord events.

    ​Good luck! Smile

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    I would agree with Vanessa  first get a Income from work

    once you have a Job sit down with a Tax advisor and a Account and decide how you are going to hold property

    Two ways personal and Company

    Once you have the above under your belt find a good mortgage advisor

    Personally I think BTL is very limited now and it will not be easy and with the cash you have Now its not a huge amount if your going to buy in London

    Build to Rent is where the money is now ...

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    In your shoes I'd buy a three bed in the North of England with no mortgage and register it as my primary address. Ideally one that would benefit from a bit of renovation. 

    Rent out two rooms and spend a year doing it up. It doesn't matter if you have another rented residence in London.

    After a year get it revalued and take out a mortgage.  Residential or buy to let depending on what you want to do with the cash released.

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    I agree the North is the place to invest now

    The problem I see is investors from the South can be bitten by investing in the wrong areas

    I saw this happen in the period 2004 to 2007 southern investors purchased along with the Irish and they lost a lot of money in the crash

    Just like anything else you need to understand what your buying and buy on yield and forget capital growth


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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Hello Dave

    What a great position to be in.

    Well done for working so hard and saving so much.

    I'd suggest buying a group of properties (quite possibly through an auction house, before auction) at £25k each (probably a deal to be done with legals, etc) and keep the rest for contingency. That should give you a yield of £400 per week but best to take off £100 for management fees and maintenance.

    Once you're in PAYE work and saved a small amount I think you could get another BTL mortgage if you wanted to keep expanding.

    Best to get proper advice from e.g. Less Tax 4 Landlords as regards the vehicle through which to buy (limited company, LLP, etc) as you should already start to think about tax efficiency and succession planning (save yourself multiple headaches in the future).

    Good luck with it.

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    Tax Planning now is the first port of Call for all new Landlords

    and If they intend to work I would invest via a Company every time

    you have to think ahead long term

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    Be very careful with auction properties. Sometimes there is a reason why they are being auctioned and it's essential to read the legals very carefully and visit the property.

    Things to watch out for include sitting tenants on very low rents that cannot be evicted, leasehold properties with short leases and buildings with serious structural defects.

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    I would say be very careful with ANY property, not just auction properties.




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