Getting into property (Help with the learning process)

[dimraj]

Hey guys, i have been a lurker on this forum for a little while, i have recently read the fastlane book.

A little bit about me, i am a 23 year old living in England UK.

I worked in a slowlane job until about 6 months ago when i quit to go back to university for my masters degree. I managed to launch an ecommerce store in the month when i quit my job. I already had some experience on instagram running a niche account but i never monitized this as i didnt know how to.

Anyway in the first month of launching my online store i managed to surpass the income i got in my full time employment job before i quit to go back to university. Replacing my full time income in the space of a month always makes me question why i never started sooner, as if not for the fact i had to go back to university to study i never would have figured out i had the potential to launch a business of my own and would still be slaving away at my slowlane job.

Anyway that is a little introduction about me, in the space of 6 months i have managed to build my personal savings to just about £18,000 i have no debts not even student loans. I know my savings is not much by any means for a 23 year old in this day and age with many people my age making this in a day from their online vlogs detailing their progress etc. But my ecommere store is only 6 months old and still growing positively and i am positive in the space of a year i can more than double my savings.

Now to my main question, i am interested in putting some of my money maybe into securing a property. I live in the north of England (Leeds) and you can get a few decent houses for about £100,000+ These houses would be for rental purposes. I know the general requirement in the UK with banks is to have 10% of the money to secure a deposit.

Now my question is before making a big jump into the unknown are there any forums where i could learn about getting into property, i am not asking for a mentor, i am just looking for some helpful advice on how to go about starting and "learning the ropes".

Too long didnt read: I would like to put my money made from ecommerce into something else as i am not sure how long my current niche would remain profitable.

 

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[jon.a]

biggerpockets.com

 

[PurpleMonkey]

Do you own a home or do you rent? In the first instance, there could be benefits to buying your own place and paying down a mortgage rather than paying rent to someone to pay down theirs.

Some things for you to consider:

Buy To Let mortgages tend to require a bigger deposit than buying a house to occupy. I think 25% is more the standard amount (rather than 10% for owner occupied). I'd speak to a broker or do some online comparisons.

I recall terms of BTL mortgages require that the rent is at least 125% of the monthly mortgage payment.

Second houses (inc those for BTL) in the U.K. now have to pay higher stamp duty.

The risks of non-payment of rent and maintaining the building (heating, roof, etc) need to be considered.

Congrats on the success of your ecommerce site and good luck.

 

[Chazmania]

I'm a small-time landlord but I've owned rentals for years and I'll give you my quick opinion since you asked:

• Find a good property in a good location. These properties hold their value well and rise quickly in an uptrending market.
  
• Pay less than the market value for that property so you create 'instant equity' the day you buy it. Make aggressive offers while shopping around.
  
• Be sure that there will be a healthy positive cash flow - and add in a margin for unexpected expense increases when doing your calculations.
• Make sure that property fits the profile of 'desirable' to 'good & decent' tenants (pay on time, keep a clean house, etc).
• Keep those good tenants happy, paying, and staying in the house. If there's a problem with the house, fix it quickly.
  
• Rinse and repeat.

I've owned good and not-so-good properties over the years. I sold off the not-so-good ones over the past 2 years and I've never been happier. They threw off a nice income and ROI but over time I judge success differently. There are many ways to make money - why not make it a point to enjoy yourself along the way too?

Rentals that meet the criteria above will often be a joy to own and make you wealthy over time. Good luck.

 

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[MidwestLandlord]

I'm a small-time landlord but I've owned rentals for years and I'll give you my quick opinion since you asked:

• Find a good property in a good location. These properties hold their value well and rise quickly in an uptrending market.
  
• Pay less than the market value for that property so you create 'instant equity' the day you buy it. Make aggressive offers while shopping around.
  
• Be sure that there will be a healthy positive cash flow - and add in a margin for unexpected expense increases when doing your calculations.
• Make sure that property fits the profile of 'desirable' to 'good & decent' tenants (pay on time, keep a clean house, etc).
• Keep those good tenants happy, paying, and staying in the house. If there's a problem with the house, fix it quickly.
  
• Rinse and repeat.

I've owned good and not-so-good properties over the years. I sold off the not-so-good ones over the past 2 years and I've never been happier. They threw off a nice income and ROI but over time I judge success differently. There are many ways to make money - why not make it a point to enjoy yourself along the way too?

Rentals that meet the criteria above will often be a joy to own and make you wealthy over time. Good luck.

Awesome comment.

I'll add since I own some rentals as well.

Like @Chazmania said above, make sure the property fits the profile of the tenant you want. When you hear people say things about problem tenants, they are usually referring to properties that attract that kind of tenant in the first place. You want people that have the means to pay, hold themselves to a higher level, and are more likely treat your property well? Than buy property those people would WANT to live in!

You will not attract quality tenants with garbage. Buy for the tenants you want.

"Find a good property in a good location"

Keep in mind this may not be where you live. I made this mistake over and over again. I recently went outside where I live, and found properties with almost double the cash flow, and easier to rent. Don't be afraid to look around, it's a big world. @JScott schooled me on proper cash flows then I first joined this forum, and I am making moves to improve that. Including selling some properties.

Also, some landlords are against having a property manager. I've found though, that if you find a good one, they are wonderful to have.