Invesment Property

[Celeste7]

Hi Everyone,

I am looking at buying my first property. Since I live with my boyfriend it would be an investment property. I have a few questions about a few bit I am not sure about (and yes tried google but on some websites details are not clear)

If I have bought a house that needed renovating and was done up within 10-12 weeks can I put it back on the market? What sort of fees and taxes I should expect?

If I have decided to rent out first I would need to get a buy to let mortage? How is that differrent from a normal mortage?

I am looking at a lovely terraced house in Great Yarmouth, has anyone had any experience selling/letting a house in that area? Is the market buzzing there?

Any advice when buying an investment property?

many thanks for the help guys x

So you want to be a landlord. That's fine, despite the screams you'll get here, but it is a business and this needs lots more research.

Start at the library and lurk on landlordzone. And do the full.sums.

Have you spent a day, or longer, in Great Yarmouth?

Don't do this if you want to make any money

You need to learn the law as it applies to landlord and tenant. Learn about income tax, and capital gains tax. A buy to let mortgage is interest only because you can claim tax relief only on the interest. To be frank, from what you have said, you aren't ready to do this yet. You really need to know what your rights and responsibilities are because the penalties for cocking it up can be huge. You also need to know the area in which you are buying.

Correction. BTL mortgages can be both interest-only or repayment. You should not get a residential mortgage. A lot will be broker only, so you may be better contacting a fee-free whole of market broker like London and Country. You will probably need at least a 40% deposit.

However having said that I agree with the pp. It’s very difficult to make figures stack up, plus there are ever increasing rules and regulations. Simple answer is......don’t.

From experience, however much you think it's going to cost to do up a property, you can add add at least 25% and very likely more. And it is almost bound to take a lot longer and be more faff and hassle than you imagined. I don't know whether you've been at all influenced by Homes Under the Hammer, but I swear most of the people featured lie through their teeth about what they've had to spend to do a place up.

Unless you can both pay cash, or mostly cash, and have done a LOT of very diligent research into values/rents/the lettings market in the area, and already know it reasonably well, I wouldn't advise anyone to go into it now.

Most of the landlord disaster stories I've ever heard of have involved someone buying in an area they don't know, having done little or no research of their own. However nice a property may be, that doesn't mean it's going to be a good prospect from a rental POV.

As a landlord you will have responsibility to keep the property in good order and have all the correct fire certificates electricals and has etc

You may encounter difficult tenants who wreck the house and don't pay the the rent and be prepared to go to court for evict

Buying a house to do up can be done quickly if you have the right contacts - it's hard enough getting workmen round when you own a house let alone have a time Schedule ans they know you're making money.

A good example if you miss mortgage payments on a buy to let the mortgage company don't need a possession order they just appoint a receiver. That gives you very little legal protection.

Do you already own a property or are you buying cash? If not, it's very hard to get a buy to let mortgage.

My god, it's bad enough when people watch a single episode of Homes Under the Hammer and then declare their intention to become ''property investors'' ... but you don't appear to have even bothered with that level of research and analysis.

God help you (and even more so any potential tenants who might be unfortunate enough to find themselves renting from you)

Why the sarcastic/mean comments?! The truth is I have some savings thats just sitting on my account and was thinking of doing something with it. Is that so bad?! And yes I could probably be a cash buyer or would only have to get a small mortgage and no I do not want to be a landlord I just thinking of the house wouldn't sell I could possibly rent out ?!
Geez people relax just cause your life is so miserable doesn't mean mine is and if I have an idea and search on the internet or god save me I dare to ask it on here it doesn't mean I'm a clueless idiot. I have started doing research the same time as I posted this thread and please do forgive me I dared to do it as clearly I never be as 'clever' as you guys.

Ps I do not have a TV and no idea what homes under the hammer is but thanks for the tip I'll check it out

homes under the hammer is the last thing you want to watch.

if you don't want to be a landlord, don't rent out a property. If you do, you'll need to grow a much thicker skin as at some point in your landlord career you WILL get a kicking from the deal/steal/trash brigade.

you may also want to lurk on landlordzone for a while to read just how much can go wrong.

We look at this every so often when we look at our finances. Apart from not really being morally comfortable with the idea, we always come down on the side of "no" because:

• one really bad tenant can wipe out any profit for a full year or even more
• I hate having to sort stuff on our own home (eg boiler, leaks) and I don't want to do it on someone else's home
• yields are really pretty low thesedays
• don't want to tie up cash in a house at a time of life when things can change quickly. If you split up with your DP or have kids for example you may want access to your savings quickly

Re the property development side, unless you are a builder who can do most of the work yourself / call in favours, there isn't going to be much money to be made. If it was that easy surely everyone would do it. If you're wanting to make sure your savings keep pace with inflation I agree that a cash savings account isn't a good idea, but a lowish risk (or high risk, if you're less risk averse than us) stocks and shares account or similar is probably the place.

I dont think posts were meant to be less than constructive. Certainly mine was not. I am often asked by others thinking of becoming landlords and my advice is usually not to. We have made really good money over the years, but are in the process of divesting. It is very hard to make the numbers stack up.

Rather than Homes Under the Hammer (I too had wondered about their renovation costs), I would watch one of the programmes about nightmare tenants, to get a better feel for downside risk. When things go wrong they can go very wrong, especially if you are not completely on top of regulations and paperwork. Lots of nice ordinary people caught up in a nightmare.

The fact you can't take honest, well meant and contrucitve advice without hitting back at posters who are not saying what you want to hear, suggests you may not be cut out for the tricky job of working with tenants.

Some friends of mine rent out 3 or 4 properties in a similiar/nearby area. They spent bit extra on nicer furnishings and decor - they're very handy so do their own decorating etc, and son in law is a qualified electrician/builder - so any work is done well but very cheaply, and she has a really good idea of how to present a house attractively so it's rented out quickly. They price at the very top end of the market and get largely better quality tenants in who can pay promptly and don't trash the place. However I think more people are doing this now as I don't think they're doing as well as they were with their rentals.