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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,
I don`t have any unbreakable rules
I prefer to give myself freedom of choice and not straitjacket myself .
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!
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
`` 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 ?
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.
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??