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You should, in my opinion, never buy a property to let out if you have not owned your own first. There is a lot of BS written about BTL with unrealistic aspirations being peddled be a lot of people. Buy your own and pay off good chunks of the mortgage, save some spare cash that you don't otherwise need and then and ONLY then consider buying a quality BTL, IMO stay away from the junk... trust me, "professionals" don't rent rubbish, only buy a property to let out that YOU would feel delighted to live in yourself. There, that's my 2p. Best wishes : Dom (25 years in Mortgage lending and a landlord for 20 years)
``IMO stay away from the junk... trust me, professionals" don't rent rubbish, only buy a property to let out that YOU would feel delighted to live in yourself. ``
I`m never quite sure why one would advise someone to only restrict themselves to such a narrow and limiting criteria. To do so means you will miss out on some brilliant investment opportunities based simply on the simplistic reason that you may not want to live there yourself .
Its such an unsound piece of advice in my view .
I live in a 4 bed detached . I have studios / 1 / 2 / 3 beds which i would not be delighted to live in .
But I am not my target audience . They are investments and were good deals .
The tenants however are delighted to live there as it suits their needs and surely that is what matters
There is little correlation between my chosen home to live in and an investment property.
The two are very different beasts. All they share is bricks and mortar and a roof
A true professional property investor is quite capable I believe of appreciating the difference between the two .
Beauty is more than skin deep
Jonathan Clarke. http://www.buytoletmk.com
I appreciate your view Jonathan and it is clear we take a very different approach to letting property. In my view these are homes for people and they are people like you and me. From a personal point of view I would not feel good about renting out a place that I would not be happy to live in as that makes assumptions about the tenant which are likely totally untrue. I think you have to think of property as a home first and investment second. People are at the heart of our business and if you treat them right you will be rewarded. Ok, we don't agree on what we would buy and that is nothing new but it is certainly not unsound advice to favour quality over yield. I learnt a lot about being a landlord from older, highly successful investors in North London in the early 80s. Putting people first may not achieve the sort of yield that some people peddle as a (in my view foolish) aspiration but when combined with better rent performance, customer satisfaction and long term capital security I would argue that it IS the obvious choice for the professional investor to favour quality over quantity / yield. We are all beautiful on the inside
Yes I agree people are at the forefront as an unhappy tenant is no good for anyone
I`m not sure what you define as `quality` though ?
I`m not sure what assumptions you are making about the tenant?
Many can look out for themselves and decide where and what they live in
Their definition of quality is often different to yours or mine.
And why do you have to sacrifice quality or customer satisfaction to get yield
You can have all three. Having one facet does not cancel out the others
So I bought a run down 1 bed . Spent 10K on it to make it a `quality` 1 bed
I add value in doing so of maybe 25K
It yields 7.5%. Tenant is happy with brand new everything
I wouldn`t want personally to live there though. But so what
The tenant does and it would be selfish of me to deny them that right
Its too small for my requirements and the area is ok but not my cup of tea
But you it seems would advise someone not to buy it on the basis that you wouldnt live there
But if they cant afford maybe where you live surely you are denying them opportunity and choice
Your model is therefore more perhaps for your needs than the customer
And that`s fair enough -
I feel I run a broader church with something for everyone to fit all budgets
I agree we are all beautiful on the inside .
I find it interesting that you wrote this directly after my comment. Like Jonathan has touched on...
You should, in my opinion, never RESTRICT YOURSELF!
I agree, buy your own property first and get an insight on how to manage a property.
Then start to build your portfolio.
Buy your own place that needs complete refurb. Do it up gradually, living in a 'clean room', do it up, sell it for profit, avoiding any tax. Rinse and repeat until you know what and where you want to be!
the down side of that is you end up living your life on a building site! works for some people (I have family who are doing this), but not for everyone
Definitely agree with others that you should buy your own property first. It gives you more of an insight into what managing a property is like.