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  • New Members

    New Graduate considering property investment

    Hello,

    I've signed up today as I am considering investing within properties in the next two years and I would be wise to introduce myself to the community.

    I am starting a Graduate Job in Bedfordshire starting at £30k ea and I want to invest in student properties in Derby where I studied. There are a number of options that I could consider, though as I am focusing in software engineering, my knowledge is very limited so I could be wrong and any guidence is valuable to me.

    I have looked at Buy-to-Let mortgages and some of the costs accociated including the 3% tax over £40000 and from what I've seen it can be rather risky although I think there may be more problems that I haven't even considered yet due to my lack of experience.

    What I'm additionally hoping to ask is - has anyone had experiance with interest-only mortgages? Is it a feasible option for increasing income short term with a letting agency? My idea is to save with my employment for the next 2 - 3 years to make a down payment, rent out student lets and at the end of the mortgage period (is a longer or shorter term better?) - sell off the property and pay the lump sum and repeat. Additionally I may try and do this with multiple properties at the same time.

    Daryl.

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    Hi Daryl - some pretty novice questions here (but that's fine and its good to ask). most covered in topics you'll find on here if you search for them.

    Most people believe if you can get an interest only mortgage, that this is better as it gives you more options and less strain on your cash flow, especially if cash flow is tight and you're likely to increase your earnings over the next few yrs.

    I'm no tax expert but you only need to pay 3% stamp duty on top of normal stamp duty if buying your second home. If this is your first purchase whether it's a BTL or your home doesn't matter, there's no stamp duty upto X amount def not 40k (i forget what it is for FTB's these days).

    The strategy to buy somewhere you know first is important but most crucially to take your time and learn how to buy well, learn how to negotiate well and understand / learn how to assess the value of what you're buying (don't just trust the estate agent or sourcer who's helping you find your first property).

    Derby on the whole seems to be an area doing well at the moment too.

    best of luck on whatever journey you take

    ps a mortgage broker will help you with some of the maths and costs associated with buying and what products might be available (there's not that many banks happy to lend to you a BTL mortgage before you buy your own home but i suggest this will get more common especially for those living in areas too expensive to afford their own home to start with.

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    regards Andrew Peers - property investor / sourcer - 07912674181

    a.peers@seamlessproperty.co.uk

    Property Redress Scheme Number 011436     NLA member 174404


    Hey Andy,

    Thanks for taking the time, Ill take a look around here definately.

    I'll have a good amount of time so I will look into the points including negotiating and valuations here, will be very helpful.


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    HI Daryl and welcome.

    The first thing for any first time landlord to do is have a conversation with a reputable mortgage broker such as the team at PT Brokers on 0333 363 6507.  They will be able to advise you of the type of mortgage products your individual circumstances give you access to.

    Unless you are a cash buyer - please forgive me if you are - without this clarity of what finance you can access, it is all a moot point.

    Personally, I would not recommend student properties for a newbie.  They are higher risk and more "hands on" and you would be competing with large institutional investors and the universities themselves who are increasingly providing student accommodation in new blocks.

    The safest way is to start out with a "bread and butter" single occupancy terraced house in a good street within a good school catchment area.  This means that your tenants will likely be a family who are looking to put down roots.

    To reduce the risk further you could consider buying a property that is already tenanted and the benefits are discussed here:


    So speak to a reputable mortgage first, line up the finance based on what you can access, and then start looking for a suitable property.

    The thread below is where I have curated all the most important threads for first timers:

    Top 10 Property Tribes resources for novice landlords and BTL investors 

    I would recommend that you invest time in ready through all of the information as becoming an expert researcher is a vital skill to protect you from risk.

    Hope that helps for starters and good luck!

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    Hey Vanessa,

    Thank you for replying, Vesta looks like something I need.

    I will definately go through everything you've shown me here, it looks great.

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