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I'm very new to property investing and have been building my knowledge up over the last 3 months. I'm hoping to purchase my first BTL property this year but want to be clear on my business plan and strategy.
My main aim is to one day replace my income, which pushes me towards focusing on high yielding single lets. (HMO,SA, Multi-lets etc. seem to be for the more "advanced" property investor?). However, the idea of doing light refurbs & refinancing to try and "pull" some money out sounds appealing, however not sure if this is more suited towards someone with more experience too..
(I currently have around £25k which I am building up and have all of my evenings and weekends to dedicate)
Thanks in advance!
My advice is
1 Take good Tax advice and think long term about your strategy
2 set aside as much cash as you can for deposits taxes and fees
3 find a good Mortgage Broker if your going to borrow
The rest is down to you what you buy and where
I would set aside capital growth in your plans for the near and medium future (If you Get it its a Bonus) but don't rely on it
Keep your leverage down and remember the Govt will do every thing it can to slow you down with regulations and Taxes
There is money to be made but its going to get harder and harder in the coming years
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.
Hi Dan and welcome to the tribe and the wonderful world of property investment.With £25K I fear that you will struggle to grow a portfolio. You will be looking at properties circa £90K if you take into account acquisition costs as well.Before taking things further, I recommend you do two important things that will help bring clarity to your direction.1. If you have not already done so, speak to a reputable mortgage broker who will be able to advise you on the financial products you have access to with your personal circumstances. The team at PT Brokers powered by John Charcol would be happy to advise and can be contacted on 0333 363 6507.2. Sit down quietly with a cup of tea (or coffee!!) and work out how much money you need to live off to achieve a lifestyle that you regard as comfortable. Write down all your outgoings and financial commitments to fully understand your current position. You now have a target to aim for.My personal view is that it is always a good idea to start out with a low risk option so that you can learn without exposing yourself to too much risk.A terraced house close to where you live in light refurbishment is a good way to start building your experience. Perhaps a property that needs a new kitchen, bathroom, redecoration, and flooring.Get one property under your belt, let out, and the rent coming in and then re-assess your position. I always recommend buying close to home and I prefer houses to flats.I hope that helps for starters, and here are some further resources for you:Top 10 Property Tribes resources for novice landlords and BTL investorsKeep asking questions and absorbing information. Good luck!
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
In terms of light refurb to flip in the market...
Are you a versatile and capable DIYer?
Can you do the usual DIY jobs quickly to a good standard?
Can you fit kitchens/bathrooms to a good standard without using professional tradespeople?
Could you do all the above whilst also working full time in main career?
Would partner/family be content to hardly ever see you if always working on 2 jobs?
There are high entry/exit costs for property and anyone needing to use tradespeople will see that is leeching profit - though the first £11700 of net gain is free of CGT.
Don't be in any rush to buy property just yet. It still has a long way to fall with economies becoming further under pressure.
Good to see that you are starting your investment journey!! Where are you located?
It depends on what you want to do and are comfortable doing. It sounds like you have the time to do light refurbish but are unsure about whether you have the experience.
If you feel like you could do refurbs and want to then do, it is not all about experience. But if you are unsure go for what feels safer.
There are many options out there for you, and you can always change your plan once you have brought a property and found what is best for you.
Hope this is helpful and any other questions please don't hesitate to ask.
What strategy would you advise for a first BTL investment who is cash poor?
Focus on not being "cash poor" before getting into BTL. I.e. what practical measures can you take to grow your current 25k into 100k?
Think along the lines of other investments, business, career change, save more etc etc.
I think £25k is a but low for starting. You could get a property with that and a 75% mortgage around here (Tameside) but you should have an reserve/emergency fund/ Also since prices have been rising you would be restricteed to the cheapet properties. .£30-35 for the purchase and a £5k reserve would be a better starting position.
I started by buying a couple of single letsin need of refurbishment. The capital growth from the refurbishments meant that if I had found that I didn't want to be a landlord I could have sold up without making a loss. Of course you need the money to do the refurbishment,.