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  • Buy-to-Let

    BTL Hotspots in Liverpool/Nottingham/Leeds?

    Hi there, I am 23 and Im looking to build an up north portfolio, though I live in London, I do and have always spent around 2 weeks of the month up north (Manchester) due to external factors.

    I have in the region of, slightly less than 500k to invest, and I am not in a position to get any sort of a mortgage.

    I am looking for high yielding properties at the minute as opposed to high capital appreciation properties. My strategy is to build a good cash flow, and then start to invest in properties with better capital gains with a mortgage.

    I am looking for future proof investments, Liverpool seems great, however it is scary to see how many new purpose built self contained flats are in the pipeline, it is clear that when the time comes, it will be very hard to compete with these big companies for tenants.

    is there anyone experienced in either of these cities who could provide some direction, in which I could more carefully focus my attention?

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    Personally I would steer clear of new purpose built self contained flats or flats in general as service charges and ground rents eat into your yield and with so many coming to the market I fear certain cities and areas are becoming more saturated and as you say competition with larger companies/developers may be fierce.

    I would research 3/4 Bedroom properties in the suburbs of the cities you've mentioned as they will give you a better return and opportunity for steady capital appreciation.

    HMO's can look attractive for good cash flow but require good management and lots of compliance and licensing now in many areas. Be very careful if you go down this route you need to be on the ball and do extensive due diligence.

    Having said that you are in a great position, cash is king, so you should be able to get some great deals, now is a great time to buy. I too started early at 22 but only with a quarter of what you have and now have a portfolio of 9 properties worth over £1 Million with equity of approx £500k, there's no reason why you couldn't create a portfolio of £2 Million + over the next 5 - 10 years if you make the right choices.

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    Thank you for your kind words, and the comment regarding being able to make a portfolio worth 2 million has really got me pumped up and motivated further Smile

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     First of all congratulations on becoming a Property Investor such a young age.  Over the last 40 years  its stood me in very good stead and like you I spread my across the UK and continue to do so .  

    With the sort of money you have to invest you need to be a lot more ambitious and not buying leasehold flats - you are in a position to borrow up to £1 million and you can build a portfolio very quickly .

    I would suggest buying blocks of flats which are freehold therefore if you wish to sell one or two flats off you can do on long leases you should be looking for at least to 20% discount to vacant possession value so that you automatically have profit in the deal from day one even if the rental return isn’t quite as much as an HMO or something similar , better to have capital growth and some income that covers your borrowing.

    Good Luck
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    Hi there thanks for your reply. I think I was a little unclear earlier. I have no interest in buying leasehold flats, I meant to say that I am trying to avoid areas, where these new purpose built flats will take most of the tenants, and or set the bar too high in terms of standards.

    As you have suggested, I am very interested in self contained flats, where do you suggest is a good location to begin some research for the purchase of a block of flats?


    Again thank you for the responses.

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    I pretty much agree with LandlordAgent. I buy 2/3 bedroom properties a few miles from Manchester. I average over 8% net yield and the three bed ones are also getting capital growth due to the boom in Manchester but I think I am fairly safe from any overshoot in the supply of city centre flats.

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    8% net yield sounds fantastic, may I ask are you generating this yield based on today's market?
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    Yes. That is what I estimate for the property I am currently buying.

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    Any specific postcodes / streets that you would recommend one to look at - and on a similar note, ones to avoid?

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    The Hartshead estate used to be good, but the prices have been going up fast.

    Much of Waterloo is good That is where I grew up and where my first school was. I own a property backing onto that achool now..

    Places near a tram stop were \also good, but have been going up.

    That's the problem good areas go up in price and are no longer so good.

    My strategy is to avoid the cheapest properties in the ares, and buy a step up. That way I can avoid tenants looking for the cheapest rents  - the most cash strapped - and go for ones less likely to have financial problems. My one problem tenant was OK until his partner left him.

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    Thx Peter - I will look into these areas and drop you a PM.

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