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Anyone involved in Property? (Buying and Selling or Renting)

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P0wd3r
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2011/03/19 16:20:57 (permalink)

Anyone involved in Property? (Buying and Selling or Renting)

Recently, I've been taking a huge interest in this and was wondering if there are any members that rent out properties or work with development? 
If so, where do you have them? What are the Pros and Cons to it?
 
My grandparents have a few properties that they rent out and they said aslong as you have good tenants who respect the property its fine, but they were pretty vague about it.
 
Is it best to buy cheaper places and pay off the mortgage or better to buy nicer places (or atleast nicer location) and therefore charge higher for rent?

Can't wait until I get enough cash up so I can buy my own place! 
#1

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    USA DEALS
    El Gringo
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/19 19:33:24 (permalink)
    I have a property rented and am currently building a house to live and maybe soon one more to sell/rent. All are here in Northern Mexico, although the house I am thinking of building will be across the border in Texas.
     
    Your grandparents are exactly right, renting is fantastic if you have good tenants.
    Luckily for me, I get all of my tenants from PEMEX (national oil company). They are all engineers who get moved on rotation, staying at each location for maybe 6 months at a time, so I have guaranteed rent every month and zero hassle. The company pays for a maid to go twice a week (because the engineers are working 12-18 hour days) so it is kept in great condition.
     
    Here are a few of my thoughts for your situation.
     
    The most crucial thing is to do your numbers. You need to work out:
    -Is the place your buying a good price?
    -Is it rentable?
    -What is your target renting market?
    -What type of mortgage do you want?
    -How much it will cost you?
    -How much you can rent the place for?
    -Are you going to rent it yourself or work through a letting agent?
    -Do you have enough or can generate enough money to use as safety in case your property spends extended periods of time without tenants?
     
    In my opinion there are benefits to starting small with smaller house and smaller mortgage:
    -Easier to get a mortgage
    -Larger market to rent
    -Less risk of losing your property if you don't have tenants, as mortgage payments will be more affordable
    -Once you have 1 house under your belt, it will be easier to get mortgages because you have some decent collateral
    -Once the mortgage is paid off you will still have a decent source of income
    #2
    swordfish
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/20 09:18:38 (permalink)
    Ive got 25 houses one the books at the moment, its a good thing to do if you can, it all depends on how able you are trade wise and how good you are at finding the bargains, you make your money when you buy not when you sell is what they say. if your a tradesman it would be best to find a run down property buy cheep - renovate - rent - use new equity to buy another.
     
    aslong as your current job or partners job brings in enough income you can soon build a portfolio of propertys
    #3
    P0wd3r
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 12:24:54 (permalink)
    Thanks guys, both really, really helpful posts! 
     
    My girlfriends father owns 8 houses, but only several are rented out (the rest are really family holiday homes) and was pretty much said what you both said. He was saying that you have to know who your demographic is, buy as cheap as you can get it and make sure its in an attractive place (e.g. make sure people will actually be interested in buying/renting it out) 
     
    How do you mean your mortgage goes down because of collateral? Is the % you have to pay back on the loan smaller? 
     
    My grandparents next door neighbour owned over 120 properties (roads in some cases) but it was all brought really, really cheap and was mainly student accommodation in really rough neighbourhoods. 

    Is it much easier to get more properties, once youve gotten onto the property ladder? As a first time buyer, I really cant imagine owning several (atleast at the moment).

    Swordfish, have you had trouble with tenants? Who is your main demographic and are you properties mainly local to Bournemouth?
     
    Feel free to PM me if you dont want to discuss it on this thread or whatever :)

    Really appreciate the advice and tips lads!  
    #4
    Wheels
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 12:28:00 (permalink)
    swordfish if your a tradesman it would be best to find a run down property buy cheep - renovate - rent - use new equity to buy another.

     
    Where does the new equity come from?

      




    #5
    P0wd3r
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 12:31:03 (permalink)
    Also, forgot to ask. When you buy a new property, do you pay off the mortgage to the previous one?
    I'd hate to think what it would be like to pay off 25 mortgages! 
     
    What's the etiquette mortgage wise? Buy one property, pay off mortgage, buy a new one use rent to pay off mortgage etc ?
    #6
    swordfish
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 12:33:32 (permalink)
    Wheels

    swordfish if your a tradesman it would be best to find a run down property buy cheep - renovate - rent - use new equity to buy another.


    Where does the new equity come from?


    Eg, 2 months ago i bought a 3bed property that was completley ripped out and bare, no heating old electrics etc. for 45k
     
    Spent 8k on materials plasterd re wired replumbed decorated new flooring new kitchen/bathroom.
     
    2month later - valued at 90k, 2 month work 55k equity over the purchase price, and upto 85% of the 90k could be remortgaged to buy another, as i have no mortgage on this property
    #7
    swordfish
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 12:36:10 (permalink)
    P0wd3r

    Also, forgot to ask. When you buy a new property, do you pay off the mortgage to the previous one?
    I'd hate to think what it would be like to pay off 25 mortgages! 

    What's the etiquette mortgage wise? Buy one property, pay off mortgage, buy a new one use rent to pay off mortgage etc ?

    you use the rent to pay off the morgages even if you have 25 mortgages sometimes there is a shortfall which you have to cover with your earnings
    dont understand the last part of question
    #8
    Wheels
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 12:53:05 (permalink)
    swordfish
    Eg, 2 months ago i bought a 3bed property that was completley ripped out and bare, no heating old electrics etc. for 45k

    Spent 8k on materials plasterd re wired replumbed decorated new flooring new kitchen/bathroom.

    2month later - valued at 90k, 2 month work 55k equity over the purchase price, and upto 85% of the 90k could be remortgaged to buy another, as i have no mortgage on this property

     
    If it's so easy, why is everyone getting rich from property?

      




    #9
    Play
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 12:53:14 (permalink)
    Tuc is the property man IMO
    #10
    P0wd3r
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 13:02:46 (permalink)
    dont understand the last part of question

    Dont worry, it was the same as the first part, just phrased differently.



    If it's so easy, why is everyone getting rich from property?

    Because it takes a lot of money to initially get onto it in the first place. You also have to look really hard into where it is and take into account how well/likely you will be able to sell it/rent it out after.
     
    To be honest though, I dont know why anyone with a reasonable amount of money would just leave it in the bank and NOT invest it through property. Id rather have my cash where I can see it, not in a bank getting a measley 4% or whatever.
     

    Tuc is the property man

    Who is tuc?
    #11
    MT2006
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 13:11:18 (permalink)
    P0wd3r

    If it's so easy, why is everyone getting rich from property?

    Because it takes a lot of money to initially get onto it in the first place. You also have to look really hard into where it is and take into account how well/likely you will be able to sell it/rent it out after.

    To be honest though, I dont know why anyone with a reasonable amount of money would just leave it in the bank and NOT invest it through property. Id rather have my cash where I can see it, not in a bank getting a measley 4% or whatever.

    Remember that a lot of people who bought b2l properties did so when banks were throwing money out their doors - you didn't need much, if any captial, you could get 100-125% mortgages!
     
    Regardless, I don't think it is hard to get funding even now if you have stable income - I am 23 and single, and I was quite surprised at how much the banks were willing to lend me for a mortgage.
     
    Not sure what you mean by seeing your money - you can see it better in a bank than a house lol, with a house you have a lot of capital in a single asset which is not very liquid. You can achieve better returns than property in more liquid and tax friendly investments.
    #12
    Wheels
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 13:13:10 (permalink)
    P0wd3r
    Because it takes a lot of money to initially get onto it in the first place. You also have to look really hard into where it is and take into account how well/likely you will be able to sell it/rent it out after.

    To be honest though, I dont know why anyone with a reasonable amount of money would just leave it in the bank and NOT invest it through property. Id rather have my cash where I can see it, not in a bank getting a measley 4% or whatever.

    Or perhaps they know something you don't?

      




    #13
    P0wd3r
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 13:58:47 (permalink)
    Cheshire - 100-125% is insane!! 
    (No bighead) but I'd rather do a loan through family and pay back half the loan %. Some of it adds up quickly! 

    Must be also a lot easier when youre buying a property with someone else too (eg. a friend or a girlfriend/wife). 

    Is it better to buy a say not so nice 3-4 bedroom house or a nicer 1-2 bedroom house for renting and resale value? Or is it all down to the location of houses and personal preference?
    #14
    swordfish
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 15:51:49 (permalink)
    Wheels

    swordfish
    Eg, 2 months ago i bought a 3bed property that was completley ripped out and bare, no heating old electrics etc. for 45k

    Spent 8k on materials plasterd re wired replumbed decorated new flooring new kitchen/bathroom.

    2month later - valued at 90k, 2 month work 55k equity over the purchase price, and upto 85% of the 90k could be remortgaged to buy another, as i have no mortgage on this property


    If it's so easy, why is everyone getting rich from property?


    nobody said it was easy.
     
    its hard work, long unpaid hours renovating yourself, saying its easy is like saying any job is easy, but it only is if you know how, not everyone is clever enough to buy the right place at the right time for the right amount.
    but yes most people who do have a dabble do end up rich?
    #15
    markfj
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 16:06:27 (permalink)
    i have one flat which I rent out, luckily its near centre of cambridge and fetches £650 a month, so more than covers our mortgage.
     
    I'd love another one, but I think i am right in saying currently you need around %50 of the costs, for the bank to be interested, that in cambridge is alot of cash... cant see it happening myself
    #16
    tuc biscuit
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 18:37:42 (permalink)
    I've got some I rent out mate, in my opinion it's a rich man's game as you need a decent slush fund for void periods (when there's no-one in there), repairs, damage, unforseen bills (of which there are plenty).
     
    Now for me the renting out business is a pain as I don't like dealing with tenants, I rent them all through an agent who charge a fee, but takes away some of the hassle......don't expect much of an income from the renting properties, it's more of a jam tomorrow thing.
     
     
    I now concentrate on buying renovating and selling, which gives me money in my pocket today rather than in 20 years time.
     
    This may sound weird or arrogant, but when I buy a house I know that house and the area round it better than either the person selling it or the agent as I do loads and loads of research, I will know within a very small margin what I can sell a renovated house for on that street, what one will cost to renovate and then adjust my buying price accordingly to leave me some profit.
     
    In most areas and streets there's very little money to be made as for example a good house will sell for £100,000 and a bad one that needs £15-20,000 spending on it will sell for £80,000 leaving a wafer thin profit if any.
     
    So do your research, you make your money sat at the computer researching rather than doing the work.
     
    With the renters I avoid new flats especially, mine are mainly terraces, some ex housing association all in average areas, not crap areas, but not good either as these can often provide good rental yields in my experience.
     
    that's a little of my knowledge, not to say it's right, but it's honest from my point of view

    I wish I was more attractive like Dagless.
    #17
    tuc biscuit
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/22 18:41:32 (permalink)
    P0wd3r

    Who is tuc?

     
    only just seen this, you're gonna have to wise up and fast if you want to survive on this board or in the cut-throat property game
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    j/k

    I wish I was more attractive like Dagless.
    #18
    RichG123
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/24 16:23:31 (permalink)
    I have one terrace house i rent out....
     
    I can only echo what others have said really, not alot of money made from renting when you still owe money on houses....
     
    If you know what your doing with the right research and things i have seen people making alot of money out the the buying and selling game but have also seen some people get it wrong and lose thousands ££££
    #19
    tebow
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    Re:Anyone involved in Property? (Buying and Selling or Renting) 2011/03/24 17:08:26 (permalink)
    P0wd3r


    To be honest though, I dont know why anyone with a reasonable amount of money would just leave it in the bank and NOT invest it through property. Id rather have my cash where I can see it, not in a bank getting a measley 4% or whatever.


    From this statement I can tell you have an unrealistic idea of what making money from property involves. Getting a "measley" 4% is effortless and (generally risk free) making money in property is neither of these things. In general people who make money from property are
    a) Rich
    or 
    b) Wealthy enough to make it their full time job
     
    There are obviously exceptions though.
    #20
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