I have been told Buy to Let is a Win Win – is this true?

Reply to the comment left by "Heather G." at "02/02/2017 - 12:49":

He'd generate much higher returns and cashflow by spreading this deposit pot across say 4 properties and finding motivated sellers who are willing to sell at a significant discount.

£3-£4k is definetly possible with the right strategy and application

Reply to the comment left by "Annie Landlord" at "02/02/2017 - 12:38":

Although buying outright might suit some people, don't forget that with a BTL interest-only mortgage, you can still deduct this from your income, even after s24 is fully in force you can claim 20%. If you put all your money into one property to buy it outright, you're putting all your eggs in one basket, and your capital growth is totally dependent on house prices rising. And you're risking all your own money, rather than some of the banks £. If you have a mortgage, you also benefit from inflation depreciating the cost of your debt over time, thus giving you a double whammy.
If you take out a £100K mortgage now, and inflation is 2% pa, in 10 years time the value of your mortgage will be £81,700.

Reply to the comment left by "Karl Stewart" at "02/02/2017 - 12:55":

Karl, I totally agree with you! I just did a quick scribble of numbers to give him an idea of what £280K could look like. I would usually suggest exactly what you said, however, bearing in mind he's at the very start of the process, a single buy to let would be easier for him to get his head around - and buying 3-4 properties might scare him off entirely!

Reply to the comment left by "John Maynard" at "02/02/2017 - 10:22":

Hi John,

I can't find anything on "Property Progress" online - do you mean Progressive Property?
I've actually found them helpful and informative so far.

Heather.

Reply to the comment left by "Heather G." at "02/02/2017 - 13:01":

Also i should have mentioned getting Educated.

The Likes of Progressive property, and Property Mastery Academy are a great way to learn how to invest safely and will help to mitgate the risk of not knowing what you are doing.

I have trained with both of these training providers and would recommend both.

Reply to the comment left by "Heather G." at "02/02/2017 - 13:01":

Can't say-maybe i do maybe i don't!

Actually the info these guys give is generally good but, after peddling BTL to the masses (or maybe it was going to become mainstream anyway) they are strangely quiet on the topic!

Personally I find B2L to be so straightforward, with the help of a knowledgable financial advisor and an accountant.

Simply put, find a two-bed house in a good area, put approx 30% down in cash, buy the remaining 70% @ about
3.4% fixed over 5 years.

Spend a good amount putting in a nice kitchen, bathroom etc. and putting in the necessary rewiring and combi boiler. Make the house lovely. The extra you spend on the little touches will be noticed. No magnolia and nasty, cheap carpet.

Use a good agent like Connells and market the property at the top of the rental bracket for the area, to get better tenants who appreciate your effort and standards. Don't be surprised when your tenants want to stay and really look after your house. Let them have dogs too, then they'll never leave. Dogs do less damage than boisterous children or drunken boyfriends. The occasional new carpet in a room, £200. Personally I've never incurred any pet damage in 4 years. My tenants are responsible !!

Get to know the tenants and build a trusting relationship with them...and be responsive to their needs, even if it occasionally costs you a few pounds.

I have done exactly this six times and have six lovely tenants. As I renovated the houses very well, my maintenance runs at about 2-3 hrs a year. Insurance is about £120.00pa and my yield is about 8%pa plus I obviously get the uplift in property values over the next 20 years.

I have just signed off my tax return for myself and my wife. Couldn't be happier....but that is all because we retired early at 48 and the rent is our income. If you remain in work and are in the higher tax bracket or anticipate the rental income taking you into it....don't bother. You can make a better return in a well- managed share ISA.

I plan to eventually sell up over a five year period to minimise capital gains.

It couldn't be easier.

Hi Philip

I agree with several of your points, particularly making the property nice and allowing pets. That's contentious I know because some people have horror stories to tell.

As for paying top prices for a big name letting agents I am far less convinced. I use lettingSupermarket who charge 5% + VAT for an inclusive service. See our letting & Management section.

Also, advertising for full market value results in less people coming through the door. I advocate advertising for at least 10% below market value and having a block booking. That way you get far more interest and choice of tenants. If you have several interested parties then explain that you've obviously made a mistake in terms of pricing and that given the demand you will consider best offers. If you property really is nicer than others in a similar price bracket then you will often find the offers will exceed the normal market rent. I had one advertised last year for £450 where open market rent was £550. Best offer received and accepted was £695!
.

Sorry Philip I used to wear the rose tinted specs, but not now. My properties are refurbed to a high standard and many tenants look after the property very well. Some don't, however good their credentials look on paper. I have had one house trashed completely, seemingly due to emerging health issues. You can't plan for that. Also, good paying tenants lose their jobs, divorce, have another baby, become ill - and the rent stops. I make a good living from a small portfolio and have great tenants, but I know problems are only ever one step away. Keeping a contingency fund is imperative.

Annie. I think you're absolutely right. I consider myself to have been lucky so far, but do think that some people contribute to their 'misfortune' (not you) by treating their tenants like third-class citizens. I took on a family two years ago. They had been in a previous house for three months, when damp issues became a problem. Their landlord refused to sort it out and released them from their contract. The house they vacated was immediately back on the rental market. Clearly the landlord wasn't prepared to incur costs to sort out an issue with his own property.

With regards to changing circumstances, i guess it's a case to ensuring that the tenant feels able to approach us as landlords. My mother in law avoided her tenant, no relationship was established and she ended up 6 months down on her rent rather than working with the tenant to help her find a way out of her situation. I do think we have a responsibility to help those that struggle. Not necessarily financially, but with regards to applications for housing support and references etc.

At the end of the day, If you enjoy being a landlord and like your tenants...and they like you, just just have to hope that they don't take advantage of your better nature.