UK Landlord Forum / Life

Hi Everyone,

I am thinking about entering the world of property, however i am very young relative to everyone else (20 of years old). I was wondering what the ideal age to start is?

I know that you need to be financially stable to start (a big pot of gold) , although property is a long term investment, so the younger you start the better the outcome could potentially be?!

All comments welcome, but please make them constructive!

Are you financially stable and / or have that pot of gold?

If so, great thing to be doing... better than working for The Man.

well .... my parents and grand-parents are but i don't want to be a sponge! So i was considering entering into a joint venture with them athough that opens up a whole new can of worms. I know working with/alongside relatives can be stressful ...

I feel at this rate i might have to work for the Man for a bit just to create my own big pot of gold.

Quote from: Tom on September 08, 2015, 05:08:31 PMI feel at this rate i might have to work for the Man for a bit just to create my own big pot of gold.

Indeed.

The fact you asked the question, is great.

As a relatively young starter (24), 20 years ago, I can promise you its it the best thing I ever did.

That first initial plunge ( an old shop with a flat above which I converted into 3 flats) has been the best investment I ever made. I borrowed from my Boss ( The Man) and my Dad and two of his pub buddies spent 6 weeks helping with the work. Within 5 years ( the hard bit) I had enough equity to "grub stake" what I wanted to do next.

To all intents and purposes this one investment allowed me to give up work at 36 and spend 8 years bringing up my kids, play at being a small holder and choose the life I love!

The numbers on that investment to give you an idea, it now makes 20% return, and has grown in value by £250k. This in effect is a 33% return per year over 20 years, i.e. I have had my money back 6 times over.

Some stress, Holidays spent decorating, etc etc, but overall damn fine.

If people are willing to help, let them, but remember people love to help people who help themselves, you have to be willing to sacrifice at least twice as much as you ask anyone else for, in effort, not money... If you dont you'll piss them off.

Not to sound dumb but when you say " 20% return" are you saying that is your yeild? Because if so that is incredible!

I think my next step is too keep an idea on the property market to find a property although it is very exspensive there ... I am also about to complete a uni course in property investment and law so I should be in a good position once I finish.

How many properties did you own by 36?
Did you get anymore partners during your time in property?
Did you ever have any disagreeements with your Boss, Dad or his drinking buddies?

Yeah 20% is the yield, but it is kind of misleading as it's based on what I have spent, not what it's worth. Say I spent £100k, now it's worth £350k.

Up and down mate, we bought 3 or 4 more, then went ambitious and bought a place and converted it onto 9 bedsits, with a massve extension and no planning permission. We were forced then to rethink, we bought some commercial leases then, and in 2005 pretty much sold up everything and bought the small holding we now live on, everything except that first initial investment. With hindsight it was a great time to get out in one way, but we still ploughed all our money into a property which both dropped, and has been plagued by the £500k stamp duty thing, so not that clever really. I was 34 then. I worked for a bit more, sold the only other property we kept ( the one that was bedsits, then back to a house, now with planning, but no building regs on the extension) and I gave up work, and played at being self sufficient, depressed and lonely for a few years!

So I am not perfect, but that initial buy, has to be my best one ( although one I bought last year is looking like it could beat it with a 25% return after only 18 months!)

Looking back the best buy's are always, "you get allot of property for your money" buys.... not sure why, I think maybe they might be a bit scary.

thanks for telling me all this really helpful!

I definately know i want to be a landlord, but the being a bit lonely shit does kinda makes sense and I don't really want that. I might just have to think hard of a way to get around it. Maybe go into a partnership with someone else and work along them!

I would not get a partner in business unless you sleep with them.

Dont think of it like that though, and this is something I have only just realized, you need a "job" one where you meet people, if you dont want to be a slave then this needs to be part time, what ever it is plan it now, and train or what ever so you can be a property investor part time, and something else, even if its on the Tills at B&Q ( for the discount) you really must factor this in, IMO.

If it can be self employed even better.

I worked full time, and that was hard, I didn't work at all, and that was hard, so something in between has gotta be better right?? Let me know!

Great Idea. (On the tills is not a bad idea :'D ) The property industry in very social to start with to i could to BTL part time to start off with. Once I reach the stage of having an extensive network of contacts I can become a consultant to a firm, i.e. work part time. This would solve the problem!

Lol, I remember those days.

The sad fact of the matter is, to be any sort of consultant ( aka someone who gets paid to ask you questions, listen to the answers, then charge you for putting your answers in a report) you have to be a Salesman.... and if you're a salesman, then this would work, otherwise these jobs don't exist.

It's all rather fun the planning, but the reality is fearsome boring.

Just remember, a mortgage payment will always come out, a rent payment will NOT always come in, and you know when one is missed, even for a day, there is a large chance you have seen the last of that income stream for the next 3 months...... plus you'll have a tidy amount of work to do.

Yeah rogue tenant must be the bane of all landlords!

Do you ever deal with HMO's and student letting?

I guess there are many 20 year old Consultants out there... but I'd probably be a tad dubious about their advice. I would get yourself a job providing more than £25,000 (then you can apply for BTL mortgages) and build-up a deposit, aggressively. Once you have that, off you go - you don't get anywhere if you don't start, that much is obvious... starting young can only aid you, I think. Just remember, it's not just about the property - being a Landlord is a people business at the end of the day.

Remember not to over-leverage yourself... changes are afoot in the realm of taxation.

If you don't have a bunch of money sitting around already, or you don't earn around £25,000 per year, or you don't have rich relatives or business partners ready and willing to front you... then it's really a pipe-dream. Most people I know who are now Landlords have started from a enviable liquid position and that, just a fact, usually comes with age (there are always exceptions to the rule).

Thank Hip, yeah in relation to a consultant that would have to be done when I am 40/50 not right now! Hopefully i will be earning £25,000 in 2 years so then like you say i will start saving rapidly.

In relation to the tax changes i have been reading alot about them. It's just going to put Landlords under a lot of pressure, making sure that their yeilds are good enough to survive and not just relying on the tax break. I might start off my just buying my first house and renting 2 rooms under the "Rent a room scheme" done by the gov as the tax break is due to increase. I just need to make sure that I get a mortgage that allows me to do this!

Essentially, as I see it the gov is increasing the tax to reduce the about properties brought for investments i.e. (Landlord in BTL). They are trying to make it easier for homeowners to get on the ladder and many landlords will be forced to sell their properties causing a surplus of supply causing decreasing prices or stagnate. I can then get a house cheaper and let out 2 rooms and there should be less compertition around as many Landlords have been forced out of business. I can then get comfortable and wait whilst building equity behind me!

Ok .... Good or bad idea??

Neither good or bad... the issue that will arise, that the Government either does or doesn't foresee, is that Landlords won't just say "oh, you want to take more tax from me, here you go" will they? Unlikely in the extreme. All that will happen is Landlords will work out how much they are losing with the 20% as opposed to higher rate allowance for mortgage interest and pass that directly onto the Tenant. The market won't suddenly have a glut of cheap property on the market because of this policy. Tenants have to live somewhere and it will be a lucky Tenant who manages to move into a property where the Landlord hasn't cottoned-on.

But the Rent-A-Room scheme is a good way of making money... if you can stand living with people.