UK Landlord Forum / Life

This is my very first post in here im seeking advice.
i have got 80k to invest in the property market specifically room lettings as i understand thats how you can get the most profit. I know that would take more comitment but i intend to do this for a living and be a full time landlord.
i have been studying everything related to this business over the last 2 years but my knowladge is very internet based . I try to gather as much info as i can.
i wish to listen to your advice in terms,
- what type of property would you go for?( 1/2 bedrooms and buy the property by myself or get a btl mortgage and go for a 3/4 bedroom )? Eventually splitting 80k and buying 2 properties with a 40k deposit each??
- would you opt for a brand new property?
- most important, do you think its a realistic money maker business if you do it full time?

i mean ,when you do the maths for a 4bedrooms property( plus a living room converted to an extra big double room) u can look for 27k an year. Obviously a big chunck of it goes for mortgage payments, utilities, licenses, council tax, income tax..etc but it still looks like a very profitable business .

I have a passion for this job my grandfather was a part time landlord and i used to give him an hand with his business.
i came to the UK 2 years ago with the purpose of studying but i didnt find the motivation. Im Portuguese, 24 years old.

I would really appreciate your opinions,
cheers

£80,000 sounds like a lot and it can get you started in being a Landlord - but I'm not sure it would be enough to get you doing this full time, as your sole income.

I'm not - personally - sure where a 4 bedroom house, let out on a per-room basis, would pull you in £27,000 per year. But I'm assuming it's in that strange place they call London or somewhere like that? That's £6,750 per year per room. I rent out a 3 bedroom house in its entirety for £6,600 and it's in excellent condition with all mod cons etc. etc..

If all bills were included I guess it could be a different story... but, as you say, that immediately eats into that £27,000... and you also have little control over it. I'm not a fan of bills included, at all, but I also don't do per room lettings, so I'm out of my depth in giving advice.

I like new build properties due to the decreased maintenance headaches.

I wouldn't have jumped into per room / HMO style letting from the outset myself, I think, as there are a lot more things you need to know / do in this space.

Hippogriff thank you so much for your advice i really appreciate it.

Probably i would do like , 1 property = full time job then swap to part time when i could manage to get a second one and once i have three property then i could think of doing this full time.

I was looking in the surrounding area of Manchester like Salford . If i would buy those Barrat type of homes and convert the living room into an extra large double bedroom that could accomodate a couple i think i could reach the 27k figure.
Listen, say i let 3 rooms to single occupancy and 2 to couples ( en suit room, and the living room).
The rents would be 100£ a week for singles and 130£ for couples all bills included. We are looking for 2398£ pm and 28776£ pa.
I would manage the bins myself get a fortnight cleaner follow all the health and safety laws to minimize hassle..

I believe rooms like this have an extremely high demand nationwide, please correct me if im wrong!

New houses do not suit multi occupancy.

Thin walls

HMO regulations mean fire alarms and doors.

Parking restrictions mean you wont get planning approval.

Students are a good income in City Centre Victorian Terraces, but in most cities where there is demand you will find supply has already caught up due to the falling number of  students as a result of increased fees.

Immigrants are your next best bet, but they are really hard work.

Next Social Security people, They are no great shakes either.

There are very few working professionals in my opinion happy to rent a room long term, and as a couple? Never.

I did a 9 Bed HMO in Plymouth in 2002, and we had Drug users, young Mums, young couples, and one guy who was staying there during the week, and driving home at the weekend. Yes the money was good, but it was allot of hassle, especially as I didn't get planning for a 10 meter by 5 meter extension or register the HMO, they wern't best pleased!

Having said that you do come across current "hmo" set up already done, and they can be cheap to buy ( my Dad recently sold a standard victorian terrace which he converted into 2 x 1 bed, and 1 Studio, which rented out at £12,500 a year for £125,000) keep your eye out for these, your only trouble is you will struggle to get a BTL mortgage on them at a decent rate, without a massive deposit.

I think though that is the best advice, look for one that is already done, registered and has had all the work to pass muster.

Thanks for the answer boboff

I was reading some material available in the web about HMO and parking restrictions. What i found is that in order to be able to get an HMO license you need to have enough parking place around the house for the tenants. That would be a problem if you have a property in the city centre i guess but what im seeking is those house developments. They usually have plenty of off street space as well as a garage and they are usually let for families i would say so there shouldnt be a lot of hmo properties around.

About letting to couples and to immigrants i strongly  disagree with you. I have been working in warehouses over the last 2 years and have spoken with over 200 immigrants and the major subject is accomodarion. I can tell you that those immigrants come as couples most of the time specially eastern european ones. Yes they do aim to let an whole property for themselves in the future but they do choose to let a room on the first years abroad.
Theres a lot of reasonable and well behaved immigrants coming to the uk you just need to know how to choose them. I have been living in hmo properties with foreigners and natives and i can tell you the young british tennants were a huge headache for the landlords.
Many others come to work for an year in order to join some £s and then get back to their countries so they always go with rooms instead of properties. Its a lot cheaper for them.

About the btl mortgage, my situation is:
- i have a 14k income pa.
- my wife gets 23k pa
- have got 80k to deposit
- i would look for a property around 200k pounds.
- i have got 15k aside for any emmergency that may occur.
- have been living in uk since nov/2012

Im absolutely clueless about everything related to  mortgages i would need to seek advice with you and with a broker in the future so all opinions are very welcome.

Quote from: boboff on July 18, 2014, 11:55:29 AMNew houses do not suit multi occupancy.

I agree with this very strongly... new builds could need major remodelling to become suitable... it's not just the thin walls, most of the rooms are tiny. What the older Victorian houses have is those thick walls and rooms with more space. Last year, and a bit of this, I spent a lot of time (Sep to Jan) looking for a new house to live in... I was totally disappointed by nearly every new build I looked at - I'm not just talking Barratt, but many other developers including some of the smaller, more niche, ones - and you get nothing like the space you would get in a proper house.

Plus - you always pay a premium for brand new... you might haggle great, you might get a massive discount (with Barratt, if you have time, aim for their half-year or full-year end - they get totally desperate if they're chasing targets - will do really unnatural things) but you're still paying a premium for new.

I think - on the mortgage aspect - you will need to earn at least £25,000 to get a BTL mortgage yourself... so I assume you're going into this with your wife? I've never asked what combined income needs to be... when I last looked at this they just told me that if I was getting a BTL mortgage myself then I'd need to be showing >£25,000 salary.

I don't think 3 properties is enough to do this full-time. I think 5 is. 5 unencumbered properties can see you right for the rest of your life I believe.

Right.. i tought there was a standard measure for wall thickness and that would be ok.
Theres so much to learn and the HMO seems to be such a complex bunch of legislation.
yes Hippogriff this would be a family business ( me and wife ).

i have been thinking about getting a job as a letting agent/assistant to gather some experience but im afraid as im not British ( my english is no way compared to yours) and because of the fact all i have got is a high school diploma  theres a lot of in advantage candates against me.

considerimg you are sharks in this business shall i ask you:

Imagine you are in my situation,
-no family in the uk so no affection to any city/county
- 80.000£ available to invest
- more than sure property market is what i want to be involved with,

And you obviously want to make the highest profit, what would you buy in terms of:
-which city / county
-brand new property
-victorian type of house
- bedroom number

I would love to know what would be your ideal scenario

At this point I would go for Miners cottages in West Wales.

I believe you can get a 3 bed terrace for sub £30k, and they rent out as units for £450 pcm.

http://www.zoopla.co.uk/for-sale/details/33851092

This one is guided at £17k.

£90k as 30% deposit  gives £300k purchase price, mortgage of £220k with fees say, at 4% £8800 interest. At £30k a pop houses, with £5k each rent, thats £50k a year, £40k gross profit........ ( personally I would repay over 20 years which is a further £10k a year to find from your cash)

See it's as easy as that!

http://www.zoopla.co.uk/for-sale/details/33695405

£20k!

http://www.zoopla.co.uk/to-rent/details/33797259?search_identifier=912c33f73c470b0b8702539369fb110f

£450 a month rent.

Quote from: rmppb1 on July 18, 2014, 10:20:35 PMRight.. i tought there was a standard measure for wall thickness and that would be ok.

It's not a total breaker for your HMO kind of idea, but we're saying new builds are not as suitable for individuals letting out rooms due to the way sound travels through thinner walls and the materials used today in building.

It's always been true that the Victorians built things more... properly... to last.

You can test this kind of thing yourself... when you and the wife next go to view a property, don't stay in the same rooms - go into separate rooms and then have a conversation through the walls.

If you can't, you might be onto something.

I'm not sure which Landlords have experience of countrywide aspects. I certainly don't. My properties are in Sheffield. That's where I live, that's where my properties are. In fact... that would be key piece of advice for someone who wants to end up being a Landlord full-time... buy properties near where you live, so much easier for viewings and management. Some Landlords have properties hundreds of miles away and that gives them little choice but to use a Letting Agent for management.

If lived in Manchester, for example, I certainly wouldn't buy that ex-Miner's Cottage in Wales (although Manchester is not that fair from Wales, I suppose).

I think you are doing more research now, but - yes - I'd stay away from HMO.

As with all things... you can research this forever and not get anywhere too. Maybe you feel like that £80,000 is burning a hole in your pocket right now. Let's get it spent! Enough talking. Let's buy! Nothing can go wrong!

Quote from: boboff on July 19, 2014, 07:41:03 AM
At this point I would go for Miners cottages in West Wales.

I believe you can get a 3 bed terrace for sub £30k, and they rent out as units for £450 pcm.

http://www.zoopla.co.uk/for-sale/details/33851092

This one is guided at £17k.

£90k as 30% deposit  gives £300k purchase price, mortgage of £220k with fees say, at 4% £8800 interest. At £30k a pop houses, with £5k each rent, thats £50k a year, £40k gross profit........ ( personally I would repay over 20 years which is a further £10k a year to find from your cash)

See it's as easy as that!

http://www.zoopla.co.uk/for-sale/details/33695405

£20k!

http://www.zoopla.co.uk/to-rent/details/33797259?search_identifier=912c33f73c470b0b8702539369fb110f

£450 a month rent.

You mean South Wales and not West- big difference. Yes you can get properties for 35k, but in most cases they will need extensive re-furb to get to a rentable standard. So after spending a further 20 - 30k, you may then get your £450pm. I speak from experience of doing this in S/Wales for nearly 20 years. I see so many new landlords buying properties at auction for 30k(simply from the brochure) . They try renovating, only to be ripped off by local builders, or part through the re-furb and get the boiler and copper stolen from the property. If they are successful in completing the renovation, they then have to deal with the tenants- most of the time DSS- they have the rent paid direct to them, stall the landlord for up to 4mths, keep the rent and move to another property. And in most cases they call a mate to take the copper and the boiler ! ....My point is, it only works in these areas if your local to manage it yourself, forget doing it remote via a management comp, they're unregulated and haven't a clue.  ...It's worked out for me, because I'm like a Rottweiler right from the start, and (from experience) know all their tricks.

Good Man!

Agreed on the do it local.