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Hi my name is Ashley I'm 23 years old and from the South West.
At the age of 21 I made my first property investment of £30,000 inc costs in the North East using money I had made over the past 2 years investing in shares. I was going to university so I wanted a more reliable income and I liked the idea of making a nice home for someone as an investment as opposed to fractional ownership in public companies.
It took 5 months to find a tenant as the letting agent didn't like to let to those on Universal Credit unless in special circumstances. Eventually a couple moved in where one had mental health issues and the other was their carer. I was happy to help them and ensure the house was as good as possible. They partially decorated the house and made it their own. Although this wasn't my sole focus, the net yield was good at 12.4%.
4 months ago they split up and the property has been empty ever since. Now with some research and experience I feel like I was lucky to encounter a couple like that and have put the house up for sale. I still want to keep that money in property. I have spoken to a mortgage broker and although my number of possible lenders is low being a student, I am able to get a BTL mortgage.
Still considering my next steps and any advice is very welcome
my advice is dont buy property in areas that you are unfamiliar with, from what youve said my guess is youve bought what seemed an absolute bargain but the reality is its in a bad area that isnt desirable to tenants
i could buy 20 properties within a 10 mile radius of where i live for less than you paid for yours however i wouldnt touch them with your bargeploe nevermind my own
where is it out of interest ?
Hartlepool, I now know the better streets and the type of houses that will rent easier (3 but ideally 4/5 bed houses), not 2 bed terraces!
ashley im going to be cruel to be kind, you dont know whats good and whats bad in hartlepool, its a massive town with a lot of cheap housing for sale. ive worked there contracting refurbing terraced houses for the local authority and i dont know wheres good, what i will say is that youre not going to get anything decent for £30k, and thats not just hartlepool. youre gonna struggle to sell it, however if you do i would suggest you use it as a deposit on a btl mortgage and buy something half decent that you can get tenants into. i dont mind trying to help you out, if you can put yourself into a position to buy a £70k house ill advise you on whats available that can get you £450 to £500, to be clear ill do this for free with no strings attached and no gaurantees offered. alternatively in approx 6 months ill have a property for sale for £85k that will be fully refurbed that will rent for £475 - £500 that will be practically maintenace free for 10 years as we turn old into new almost.
In general yes the market is over-saturated in Hartlepool. However if you were to get a 4/5 bed house (of which there is one for sale at the moment), I think you would have less issues finding a tenant, that's the only way I would buy again in Hartlepool.
Yes I really don't think be buying a house for cash that cheap again and am more likely to use it as a deposit. I would be very grateful for any help and I'll message you shortly.
What is one to do if you have to go hundreds of miles up the country to buy something within their price range? Net yield/ROI was 12.4% with £310pm after agent fees and insurance, but this is only the case when it's actually let unfortunately!
I should be able to break even due to it's proven investment value and assuming I can sell reasonably quickly (although this may be unlikely).
Cost of selling is £99 with Doorsteps and £595+VAT with Doorsteps Conveyancing. You are right this second figure I could do without certainly.
Well done for what you have achieved so far at such a tender age. It's a shame you have to sell this property - there will be costs associated with that and the market is very stagnant at the moment from a sales perspective. It is typically taking between 7 months and a year (on average) to sell a property - depending on where you are in the country.Have you explored all possible options before selling?Perhaps try a different lettings agent or offer a zero deposit option? Can the property be developed in any way to add value and increase the sale price or to appeal to a different tenant demographic? Is their a council scheme where they offer guaranteed rent?Just a few initial thoughts ....
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Thanks for you kind words Vanessa.
I am cognizant of the difficulties selling, experiencing them first hand!
The property is currently being advertised for let with 2 agents in Hartlepool. Both offer zero deposit and no admin fees. I think the issue might be that they are wary of letting to tenants on Universal Credit without the option of the rent going direct to them. With my previous tenants this wasn't an issue as they had special circumstances. I could try a different letting agent but feel I've built a good relationship with these two, and would feel bad taking back the keys!
The property comes with a cooker, kettle and microwave. I could possibly add a fridge freezer. I've been told the property is fine for the demographic but it could do with redecoration potentially, this is the property: https://www.rightmove.co.uk/property-for-...13125.html
Congratulations on getting your foot in the door and gaining valuable experience on the way!
I'm zeroed in on the letting agent and think a change may be better for you as an option before going down the selling route, since you will loose a fair net% with your property value being low.
You mention that you would feel bad, countless investors / landlords have been burned because emotions factored to heavily into a business decision. Not saying to turn into a heartless monster but something to bear in mind.
Personally I would go meet with other agents in your area and see who has the most expertise when dealing with benefits tenants. Out of interest are the agents you currently have relationships with doing a fully managed service? This may explain their position on not wanting to take on more admin heavy tenants.
I would assume that your overheads are low, try giving the above a good effort for about 6 months then proceed to explore the other options?
Omega Property (Formerly SBS Ltd.)
I am not professionally trained to give advice, generally posting for the benefit of the community or my own personal development.
I just want to say congratulations for investing at such a young age! This is an amazing feat so well done!
I was wondering if you also didn’t like letting to those on universal credit, or is it just your letting agent? As they may still be a possibility for you if you wish to continue to rent rather than selling.
What do you want to do for your next steps? Are you still looking at investing in the same sort of area now you know more about it?
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