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  • Buy-to-Let

    Need to escape the day job ... Help please!



    Hi, 

    I am lucky enough to have a fairly substantial sum of cash (£200k) to invest in property and I am looking to generate an income to eventually (sooner rather than later I hope) replace my income from my day job. I would prefer to invest in the South as I live in Brighton and would rather have easy access to the properties so I can carry out the management and maintenance wherever possible.

    If you were in this position which investment strategy would you look at to generate a stable and decent income without looking to the North?

    Many thanks

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    I would consider holiday lets - no sec 24 tax implications

    Brighton is very popular and always will be in my view.

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


    Thanks for the reply. That is an area I am considering as a priority. The issue with Brighton is the high cost of entry into the market but then that is the issue with the South in general! However, Brighton is a city that attracts visitors pretty much all year round so it does have many benefits too

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    First thing and most important

    DON'T GIVE UP THE DAY JOB!!!!

    Not just yet anyway! !

    ONLY and ONLY when you have achieved  all the borrowing you require will it be safe to give up the day job.

    Your job is the passport for all of your borrowing requirements.

    I would not rush into buying now due to the flood of S24 properties that will be coming to market as S24 LL desperately  try to offload their now dud properties.

    Prices are already reducing substantially

    Watch and monitor the market.

    Keep your powder  dry

    You will be able to use it to nick some great deals from distressed S24 LL.

    Just read up and learn everything you can about being a LL..

    Especially  learn all you can about the dysfunctional  eviction process.

    Learning this will guide your investment decisions.

    Keep up to date with all things PRS.

    You simply cannot know too much.

    Don't go on any silly courses or mentoring services except with RLA; NLA etc

    They aren't needed

    Become an accredited  LL.

    Even before you have made any purchases.

     Start off with bog standard terrace properties.

    Remember EPC and electric issues.

    Consider  all different types of licensing that councils are imposing

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    Not giving up the day job just yet, but keen to do so asap! I know it's all about education, education, education as much as it is location, location, location but I seem to have hit a brick wall recently. Almost every property I think is a good possibility recently has turned out to have a hidden issue behind it or I have been out bid by someone

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    If it was that easy everyone would be doing it!!!!

    Rarely will the deals come to you.

    You just have to keep on looking.

    Despite what all the LL haters think being a LL is not easy.

    But you cannot give up the day job no matter how much you might detest it.

    It is the great facilitator to obtain BTL mortgages

    Just speak to a mortgage broker and you will find  I am correct.

    Don't give up

    Every time you lose out you are learning something.

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    Paul I’m in a very similar position to CPDS, except I live in Bournemouth. What do you think of Jonathan’s suggestion about holidays lets? I know nothing about this area and wonder how complex and time consuming it might be.

    Also, would you rule out the North completely? I’ve been looking at single let terraced houses in Hull, where I have good contacts (including a good management company and power team). Yields there can be 8-10% or more and from what I’ve read prices are expected to rise (Hull be an area of intebddd regeneration, with some big companies including Siemens relocating there).

    There are also BMV deals to be had if you look hard, much more so, it seems, than here or in Southampton.


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    I would say your ideas are good if you have local contacts etc.

    However  it is often forgotten that if the tenants default on rent you will invariably  have to evict.

    It takes about 42 weeks to evict .

    In Hull I doubt the usual tenant demographic qualifies  for RGI.

    Yield only works if you are actually  paid the rent! !!

    That is why buying BMV in these areas is very risky.

    I am unable to support a mortgage without the tenant's  rent.

    Which is why I never considered such areas.

    But if you have contacts etc up North then by all means take the plunge.

    Just be aware of what a dysfunctional  eviction process could do to your bottom line.

    Most of these sort of BMV properties attract HB tenants who I refuse to let to on principle.

    Most  of them are lazy feckless gits and no way would I wish to help them.

    Not even forgetting the UC debacle.

    HB tenants have caused me more losses than two Hull BMV properties.

    The value of your tenant demographic is sometimes  worth paying extra for a property to achieve.

    As for FHL.

    There seems to be a legal S24 avoidance loophole

    Buy a FHL

    Let out for a year for plausibility.

    Then ask lender for CTL on a standard AST

    It seems lenders will

    No S24 tax on the FHL loan as that is what it still is!

    Something worth investigating.

     I think it might have been on property118

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    Paul many thanks for such a carefully-considered reply.  FHL just sounds (from the admittedly very little I know about it) like it might be very hard going, dealing with demanding guests all the time. But making money is the name of the game so I shall think more about it.

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    CPDS

    Forget Brighton.I am getting out of the game and selling my34 properties  in and around the city as and when they become vacant.  The yields net of expenses are rubbish in our area.I am now buying commercial  in and around Crawley.I love living in Brighton but being a landlord here frankly i would not bother.


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    interesting thoughts, I have long considered Crawley. What prompted you to look at commercial over residential? Also is there potential overlap in what we are looking to achieve? Perhaps you could send me details of properties you may be looking to offload in Brighton?

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