making money from property?

[airedailleurs]

just looking for advice from those with experience really.

Is it still possible to make money from flipping houses? Doing them up and selling them on?
Can you still get bargains at auctions or are too many people trying to do the same thing?
Is buy to let a good option given the coming changes in taxation?
What are the implications if interest rates go up in the near future?

Thanks in advance for your comments

[Limpetsmum]

I've got a couple of properties with a view to having them as a long term investment. I don't make much on rental income per month. But with new budget proposals they will cost me about £100 each and that's with a LTV of 65% at least.
I can't decide what to do with them (probably keep hold of them) but it isn't a good time to go into but to let in my opinion.
Finding a bargain and doing it up sounds appealing but I've no real experience in that.

[Limpetsmum]

See below link:

www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11816720/Death-of-buy-to-let-landlords-wake-up-to-Osbornes-150pc-tax.html?WT.mc_id=e_DM44560&WT.tsrc=email&etype=Edi_Pfi_New&utm_source=email&utm_medium=Edi_Pfi_New_2015_08_26&utm_campaign=DM44560

[airedailleurs]

thanks that's very useful limpet, I am considering purchasing in cash a buy-to-let for around £50k with around 10% rental yield, so it looks as though I wouldn't be affected according to that article?

regarding finding a bargain and doing it up, it just seems so competitive as everyone is trying to do the same thing...i think you would also have to do the work yourself to maximise profits...not a business for the faint-hearted I don't think!

[Limpetsmum]

I think you'd be still affected in that your income wouldn't be as much as it would have been. Therefore are you better investing 50k somewhere else...?
I would probably get a doer-upper with a view to selling on rather than renting out to maximise profit but I don't know if I'm 'qualified'/ 'financially savvy' enough to be advising!

[airedailleurs]

thanks I guess so, I just like the idea of a regular income though, and if buy to let is dying a death, house flipping will get even more popular and the market even more congested...it's not an easy decision!

we need an expert to put us straight!

[specialsubject]

10% yield? Really???

where is this £50k house?

[airedailleurs]

rightmove is your friend

[Limpetsmum]

You can pick up very cheap houses up north with a 10% yield - often rented out via housing association. Given that you're buying with cash, shouldn't be a problem but some mortgage companies don't lend in that situation. I'm in Yorkshire area - can frequently find houses in 'rough' parts of Leeds/Bradford for that amount.
Just bear in mind the 'quality' of your tenant. I've stayed away from cheap properties as I have not wanted some of the hassle that comes with renting out in 'rough' areas. Definitely get a better yield but also a bigger headache!

[Jasper15]

The son of friends of mine went up North to uni. They bought a 3/4 bed place up there and the son lives in it and lets out the other rooms to students.The son is a live-in landlord and keeps an eye on things.Ideal.

[alasdairhandc]

Agent here;

Buy to Let is still viable, as is flipping - it's a case of assessing the risks and finding the deals - there will always, always, always be deals - you just have to know where to look.

Can't assess the £50k/10% yield thing without knowing the area, location, likely rental, average capital value for the area, your mortgage, refurb costs etc....lots to think about.

You are wise to consider tax changes and interest rates. I attended a lecture recently where a mortgage broker advised everyone to pull all their cash (equity) out of their investments so that they could buy more properties. Great idea while interest rates are low, but what happens when you're living on nothing but borrowed funds, your capital growth falls below interest rates and then you try to sell.......at the same time as everyone else has the same idea.

Couldn't see the benefit to that, other than the mortgage broker getting richer from the short sightedness of a room full of Landlords.

the tax changes will make things a little more difficult but it's not that Landlords are getting taxed more than usual, they won't be getting the benefit of being taxed less for the income anymore (rate relief has gone) - you can still work a way round it if you have multiple properties and put them through a company and run your portfolio as a business, but if it's just one BTL just factor the tax into your breakdown before purchase, and ensure you know how to extract maximum value from your investment once you've got it.

Any half decent local letting agent should know most of this. Try and find somebody who has at least done some kind of training or qualification in this stuff otherwise they're as much use as a chocolate teapot to you when it goes pear shaped.

[Flossyfloof]

Whereabouts in the country are you? I think the days of massive profits have gone but there are still bargains to be had and money to be made. It is not easy though, or everyone would be doing it.
As with any house purchase, position location and where it is are key, ime.