UKC

Hi,

I have 30k in the bank and want to invest it. I would like to go into property - buy to let investments, renovating for profit.

Anybody got any advice in investing in property please?

Many thanks

In reply to drink_more_tea:

i'd invest it and let it out.

In reply to drink_more_tea:

you aint going to get much for 30k.
Perhaps just invest it in shares, stocks etc?
Or just drink more tea

In reply to drink_more_tea:

Would be interested to know where £30k buys a property.

In reply to Indy:

There's quite a few, auction mostly. Inner city areas in the main cities and towns. Down here ,S Wales, there's property for around that price also.

In reply to Run_Ross_Run:

Hmmm can't see there being much profit in it.... how much do you rent out a £30k property for? What sort of people rent these properties, the unemployed on benefits? and the jobs market must be pretty dire for such cheap property.

In reply to ow arm:


If only there were some way of borrowing more money to buy houses. The banks really ought to think about providing something like that

In reply to Indy:

I agree you're not likely to get far with a 30k property. You can find them but I wouldn't want to own or live in one.
Popple street in Sheffield always had a couple of houses for sale in the region of £15k but the only way you cou make popple street a nice place to live would be to buy the whole street and knock it down.

In reply to drink_more_tea:

Chuck it on Chelsea to win The Premier League. At 2/5 with skybet you will pocket £12k in May. No tax to pay either.

In reply to Indy:



350 a month minimum. So 4k pa return on a 30k odd investment. Even with the associate fees its still more the banks.

In reply to drink_more_tea:

Well, I would look at getting a buy to let interest only mortgage and use my 30k as a 25% deposit which would give me a 120k property. I would not buy in cash a 30k property.

In reply to drink_more_tea:

I've invested in property through the last four years, typically buying something in need of complete refurbishment and selling on once complete. In my area, a run-down terrace In a decent area for resale costs £75000 and typically sells for £110,000 - 120,000. This sounds like a good margin, but factor in the refit costs of £10-15,000, plus transaction costs at either end, building regulations application fees, surveyer or structural engineer costs, rates and utilities for the period of ownership and I have typically made £25,000 for my labour (around or about a man-year typically). This isn't loads and would be completely uneconomic if I had to borrow money and therefore add interest charges on top (I already factor in the 'lost' investment opportunity costs).

The only advice I'd offer is that the quality of the finish is critical. All mine have sold within their first week on the market because the finish is 'professional' and everything is signed off properly. I could buy cheaper, but it tends to be an area where things don't sell so well and I'd be worrying about my tools / van and so on. It has suited me, but I can't imagine doing it with a seed fund of £30k. Another tip is that (with care) a long term interest free credit card can fund the entire development cost, as long as the funds are available to pay off the card when it becomes due!

In reply to drink_more_tea:

Buy to let is not free money - you have to work at it. In the right area students are a possibility, but £30K is at the bottom end of what you could buy and then reliably let.

Maybe look for a distress sale of a 1/2 bedroom apartment in a new block (no maintenance) in an OK area, say £30K down against £120 - £140, let out for (say) £650 pm? That could work.

In reply to drink_more_tea:

Invest in items of limited numbers and things which people will value in the future.
Eg the apollo space autographs two years ago Neil Armstrong autograph where around £1000 now around £7000 or look at people's needs / greeds, stocks in China properties are around 60% up this year, electronic goods to Russia etc.

In reply to drink_more_tea:

Clearly on a £30k budget you need a mortgage as well but I'm not so sure how easy buy to let interest only mortgages are to come by these days, didn't they tighten up the rules and require some means of actually repaying the capital?
You will need to put some of your £30k aside for the buying costs (say £1000) plus any work that may need doing before you can let it out. Also you will have to make mortgage repayments, pay insurance, utilities and council tax whilst waiting to find tenants, generally the rental market is pretty good at the moment but it could still take a month or two before anyone actually moves in.
The general rule of thumb is to assume you will earn 10 months rent per year on average with the other 2 months cash going towards upkeep and for dead times between tenants. Obviously letting it yourself is cheaper than paying an agent but more work and a good agent will be useful with "problem" tenants but not all are good!
If you have to repay the capital then you may not have much left as profit but if you're in it for the long term that will improve over time as rents rise and you'll be left with an asset worth a lot more than you paid for it in say 10 to 20 years.
Also remember interest rates WILL go up at some point, so factor that in.

In reply to Indy:


A little place called The North.

One of many chosen in a random village:

http://www.rightmove.co.uk/property-for-sale/property-29844501.html

In reply to drink_more_tea:


If you're looking to buy a wreck and do it up - make sure you understand the numbers first.

If you're looking to buy to rent and build a debt backed empire: don't do it. The disconnect between "agricultural land value+cost of materials and labor" and "house prices" is obscene in most areas. If younger generations aren't to be screwed over it has to come down, by building houses ahead of demand, not behind. This of course will screw over the older generations who have benefited from this obscene ratcheting up of perceived worth but have not yet cashed in and downsized or moved away to cheaper foreign lands.

So if you buy more houses than needed for living, and too extract a profit, you're screwing others over by taking another property of the market without sufficient supply and making it a rental, thereby driving up buying prices forcing more people to rent (nice business if you can stomach it), and you exposing yourself to the risk of it all being normalised one day.

In more concrete terms, your tenants may do one of a dozen awful things to trash the property or cause you grief.

I'd look at a mix of index tracking ISA, peer to peer lending ( Wellesy or Ratesetter) and fixed rate savings bonds under FSCS protection.

In reply to drink_more_tea:

I did it with 30k, I brought for 65k, with 15k down, spent 15k total on it, now it's worth 90-95k and is rented out for £575 a month. When I decide to I'll re-mortgage and do another one the same probably.

In reply to drink_more_tea
lots of good advice, 30k is plenty to get started, 15k in and the rest for do up , which could well be much less than the other 15. there are lots of stories of bad agents but a good one is well worth it if you want to knob off doing other things like climb/ ski seasons and not worry . although why on earth would you want that , oh no no no. when i started doing it i did then up in my spare time then when they were finished let an agent do the rest . as it happens i know a very good agent in the east midlands who would give you some advice/help about what to buy and where, i will message you her details.

In reply to wintertree:


Absolutely amazing..... Hear that thump? it was my jaw hitting the ground.

Friend bought a (pokey) 1 bed in Shoreditch for £485k. Could have spent a whole lot more.

Its the younsters I feel sorry for.

In reply to drink_more_tea:
Thanks everyone for the replies.

I don't think I will invest in Chelsea or limited things for the future. The things that people will invest later on that is short in numbers just seems too niche.

I have looked at the buy to let criteria, one bank asks for a gross salary of £20k with a rental income of 120% which you would achieve with an interest only mortgage.

I have no building experience whatsoever, but am keen to learn though, so probably wont end up buying a total wreck to start with.

My main aim is to do something like Lord_ash2000 has done, buy a fairly cheap property that rents out pretty well.

mike123 - that would be ace, thank you!

Thanks again for everyone's replies

In reply to drink_more_tea:

Don't underestimate the work required to make a profit on a rental property. We have got one, but it wasn't deliberate we just ended up with a spare house. New tenant this weekend and loads to sort out, plus plenty to sort out to make sure tenant is happy and all this little jobs you have to do on your own property you have to do on your rental property, often more urgently. Obviously you can pay someone to manage all that for you, but it seriously eats in to you bottom line.

In reply to Indy:


You're not far off being lord of the manor for that kind of money up north - http://www.rightmove.co.uk/property-for-sale/property-44807626.html


Amen. It's hard to see how the situation can continue in the SE, and it's hard to see how to fix it without shafting those who've spent half a lifetime busting their guts to buy into it.

In reply to Indy:


Only the ones who live in the south

In reply to pec:

Is that actually true?

In reply to Indy:

Well the was a clue it wasn't an entirely serious comment.
In general I can't say I actually feel sorry for young people on a day to basis, there are pros and cons to belonging to most generations and in many respects today's youth have it pretty easy but getting on the property ladder isn't one of them.
Outside the South East buying your own place is still realistic, not necessarily the exact house in the exact location of your choice, but if you're willing to make the right sacrifices it's possible. In London and its surroundings of course its a different matter.

In reply to drink_more_tea:

I would definitely be putting that money in property. Keep in mind though, interest rates will rise again. Don't put yourself in a position where your investment can't stand that test.

You absolutely must inform your lenders of your intentions to let the property.
You need to be aware of BTL fees, which could considerably push up your mortgage costs. They will charge you for a percentage of the loan which will be ongoing or flat fee you.

Shop around. Virgin Moneys present rate is the lowest at 2.34 percent but you need to fork out 40 percent of the deposit. There's a cash-back on completion with that one.

If you can't raise 40 percent of the mortgage then Accord Mortgages is worth looking into.

What are your goals? What is it you want to achieve? Are you looking to make a yearly income? If so, I personally would stay well away from letting agents. I worked in the industry for years and can tell you at least 10 ways most letting agents will screw you and your tenants. Its easy for me to say I would do it myself; I understand what's involved. Its not rocket science though, in fact its very easy. If you want more information regarding being aware of how a letting agent could scam you or just want to know the ins and outs of doing it yourself, drop me a line and I will happily fill you in.