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  • Property-a-holics

    My 3 unbreakable property buying rules

    No I wouldn't. I had inherited some money then lost my job. I had enough to live off until my pensions were due to kick in, Living off my capital did not feel right though, so I wanted to put my money to work. I could only put a fraction into an ISA each year so I looked at BTL. I considered where I was living  (Reading) and where I grew up (Tameside). Reading had high prices and low yields - not conducive for producing an income to live off., Tameside was cheaper - allowing me to buy multiple properties without a mortgage (which I couldn't get with no job). The yields were higher and it appeared in a list of top ten areas by rental demand.

    The places I bought failed two of your rules. Prices were still lower than 2007 and fairly level in Tameside. Selling at a profit without doing anything just did not seem likely in the short term.  Nor as I could not get a mortgage was there any chance of my getting my money out in the short term.

    The first two properties I bought needed  refurbishment. Doing that looked likely to increease the value enough to cover my costs. That meant if I found I didn't like being a landlord I could  pretty much get my money back,.

    The other property I bought early on was a commercial propery that was 2/3rds empty. I thought that the town centrew was likely to improve due to the new tamline that had just opened by then, and that would allow the other two units to be let. I was right about that and it has been producing over a 10% return since then.

    I haven't sold any properties since I started in BTL. I got a LTB mortgage on my old home to help me buy a new one without a mortgage. That is now up for sale, though prices have dropped in the area. I am in the middle of taking my money out of a property I bought three years ago and using it to buy another, but that is the first time I have done that,


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    I don`t have any unbreakable rules

    I prefer to give myself freedom of choice and not  straitjacket myself .



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    Jonathan Clarke. http://www.buytoletmk.com

    I agree and was thinking the same thing. I wasn't thinking about flats up until very recently - now it's a very high chance that if I can find the right property in the place I'm now looking in it will be a flat!

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    Evening Jonathan it’s not a straitjacket it’s professional rules of the game that I stick to as they say fail to plan plan to fail . The  property market is absolutely great until the music stops and every 10 to 15 years as you know it goes in reverse . 

     These three very simple rules keep you safe
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    I`m sure they work for you John

    I have broken all 3 of your rules though but still remain very safe

    There  are of course no prescribed  professional rules of the game really are there

    Each investor has to form their own blend of rules to suit their own style and circumstances

    Flexibility is key for me

    You say the property market goes into reverse every 10 to 15 years

    When the last reverse happened the music started playing louder for me  . It was great

    A developer though like your good self sees it through perhaps different eyes though than a BTL`er


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    Jonathan Clarke. http://www.buytoletmk.com


    I agree with you Jonathan that coming out of recession is a great time to purchase and I’ve made more money coming out of recession than any other time certainly more than when everyone else is buying in the hot market. 

     I also own a residential portfolio  and I can assure you the rules should be the same but we will have to beg to differ 

     Have a great evening
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    `` I also own a residential portfolio  and I can assure you the rules should be the same ` 

    Sorry but  why exactly should my rules be the same as yours ?




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    Jonathan Clarke. http://www.buytoletmk.com

    I've really enjoyed this topic.

    My own rules are:

    1. Circa 20% ROI

    2. Not rendered (I think I have some sort of in built phobia of rendered properties and feel I will need to get it re-done at great expense)

    3. Somewhere I would live myself

    4. Off street parking

    I feel I need to relax criteria 2, 3 and 4 in order to find my next property as I am really struggling at the moment in my area (West Midlands), prices seem to have jumped.

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    Hi Ben I think you do need to relax some of your points.  On the rendered one I would say always be cautious of rendered house as I think you’re right it could behind me up a multiple of sins i.e. cracking

    Best way to look and check that is whether all door frames inside the property are level and if there is a crack at the bottom or halfway up the staircase . Externally when you look at it from across the road have any of the window frames dropped. 

     Stick to my three points, don’t drop your standards -  it’s not the amount of properties you buy it’s the quality of each deal that counts
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    Hi John,

    Interesting set of rules, but I don't see how you can answer "Yes" to both rule 1 & Rule 2 as one needs no reno, the other does??

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