citroen Posted March 12, 2008 Posted March 12, 2008 hi having, 120k for something and feeling overwhelmed says to me you are not too sure what you are doing. Just be careful you could get caught out. I bought 2 apartments in bulgaria about 2 years ago, i have just sold one because the guaranteed rental agreement has finished and we made a nice profit including rentals. The other one is about 200 yrds from the beach and is on a complex with a pool. Its in St vlas, which is in the Sunny Beach area, we dont rent this out as its for family members only, but i am considering selling it for around 50k if you want to look into it.
kimolsen Posted March 12, 2008 Posted March 12, 2008 All this doom and gloom is actually good for the rental market as it puts people off buying and therefore there are more tenants. I have 3 properties in Sheffield all currently let and have been for the past 3 years. I have also just bought a flat in London close to the olympic village. These are all investments for the long term and so even if the market stagnates slightly as long as there are people prepared to rent and cover the mortgage it is not a problem.
mossdog Posted March 12, 2008 Posted March 12, 2008 What nobody has asked is how much of the £115-£120k budget is borrowed money, what rate of return you NEED as opposed to WANT over say the next 5 years, are you prepared to tie up the money for a period in excess of say 7 years? If more than 50% of your budget is 'borrowed', don't buy. If you NEED more than you would get in a good interest bearing deposit account then think carefully about investing in buy to let. It isn't easy money or guaranteed in any shape or form. If you can't say that you won't need the capital invested for say 7 years then again I wouldn't do it. Generally I am with cbr900 on this though. We have few properties which work well for us, we bought at reasonable prices (some when the market was supposed to be on the way down), but it's got to be viewed as work. You have to look after them, keep them well maintained, chase tenants for rent, and so on. We only have four tenants but at times they occupy a significant amount of our workload. I would imagine that the bulk of repossessions at the moment are people that thought it was easy money, mortgaged themselves silly and over borrowed. Good responsible post! As indicated most people have no idea what they are in for,and think its easy money! Well after 30 years experience,I can tell you it's not, and it's getting harder all the time.You can lose a lot of money if you are not careful and don't manage it yourself!
8751 Posted March 12, 2008 Posted March 12, 2008 I wouldn't touch property as an "investment" with a barge pole right now. There have been some huge price drops on flats in this area .. http://www.housepricecrash.co.uk/forum/index.php?showtopic=69510 also .. http://auctionresults.wordpress.com/2008/03/05/repossessed-barnsley-flat-sold-for-25k-over-half-off-in-3-years/ Other cities including Liverpool and Nottingham have seen big price drops and remember a lot of flats are about to appear on the market here in Sheffield in the next few months. If I were you right now I would take my £120K and stick it in a Northern Rock high interest account. Don't laugh though they pay the best interest around and it is 100% backed by the British Govt. Then hang on a couple of years and when it seems very unfashionable buy into the FTSE share index with a cheap index tracker. Don't even think about property as an investment for another 5 years at least.
Hepstall Posted March 12, 2008 Posted March 12, 2008 You could but I wouldn't suggest it for a first step into the rental market. Better to get something that is half tidy already and spruce it up a bit. Although the refurbishing is how I earn my living, it is not for the amateur on a tight budget, it can reap its rewards though with the shrewder buyer. If you are serious about being a buy to let landlord then the first property can make or break you. I say maximise what you can from it and then invest in another, slowly building a portfolio. To the OP - I would consider investing in Dubai with a guaranteed rental income agreement. You can always let somebody like MiNC Apartments deal with the bookings and pay you the rest.
jjbarnesfan Posted March 12, 2008 Posted March 12, 2008 I am wanting to buy an investment property to rent out, I have a budget of about £115-120,000. This is the first time I have done something like this and feel a little overwhelmed with the choices available! Does anyone have any advice on the best type of property/area to consider? All suggestions would be most welcome! A rough rule of thumb at present would mean you would need a 15% deposit. The amount you can borrow will be governed by the rental income you can generate rather than your income. Most lenders will insist that the rental income you generate is worth at least 125 % of the interest only payment on your mortgage. If you are prepared to take a fixed rate of 3 or more years then the odd lender will only need 100 % of interest only payment to satisfy its lending criteria. Another rough rule of thumb is that the lender will lend you 200 times the expected rental income. Quite a few of SF contributors are correct inasmuch as initially you currently will not be making a deal of money, if any. Because the market is slow at present you should be able to pick up a property so the figures stack up. The doom and gloomers talking of negative equity are ignoring the fact you will need 15% deposit so there would have to be not just a slowing as we are experiencing at present , but a massive decline in house prices. Buy wisely and best of luck
SHsheff Posted March 12, 2008 Posted March 12, 2008 Another rough rule of thumb is that the lender will lend you 200 times the expected rental income. Which lender?
SHsheff Posted March 12, 2008 Posted March 12, 2008 Most buy to let lenders Nope. IMO it's 125x max. Please let me know which ones! I have a property I'm trying to buy for something over £104k, it's valued at £155k but the rental income is only £550pm (I'm wanting to buy it for £104k, raise some capital so I can do it up, then sell it quickly). I'm struggling to raise much more than £104k on a bridging loan - conventional lenders are either reluctant to lend more because of the relatively-low rental income, or charge big exit (and entrance) fees. It seems mad to me that the LTV is so good, yet all of a sudden (changing market) it's proving difficult to raise a few thou above the purchase price because of the low rental value!
jjbarnesfan Posted March 12, 2008 Posted March 12, 2008 Do you have a deposit and who have you approached?
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