New to Investment - advice required

[Derek Curtains]

Hi all,


I’m looking to get into the property game but need some advice on what I should do, and that’s right back to the basics of buying / selling, or buy to let. Here are my parameters:

• I have a mortgage free flat that is currently let out
• I can release approx. £110-115k equity from this
• Timewise I’d be able to put a couple of hours a day into this (I have a 9-5 job that I need to take care of too).
• I have a bit of experience of renovations (done two so far that I’ve lived in at the same time and have made decent money on both)

As I see it from a beginners point of view:
Buy to let:

• Once set up will take less time to manage
• I can’t see how, once it is set up and on the go with say two more buy to lets than I already have, to progress onto more buy-to-lets in the future. How do I expand the portfolio?

Buy to sell:

• Takes more time
• Quicker returns possible
• Would probably be more interesting and enjoyable (maybe stressful!)

Any advice is much appreciated!


Thanks very much

Derek C

 

[FWL]

Personally I think the key to buy to let is building your portfolio slowly to give it firm foundations. Once the first buy to let is paid off you have more equity to play with and maybe look to grow a little quicker. However, always ensure that you have decent headroom between your financial liabilities and your income.

Why not utilise both strategies in your portfolio? Give yourself some long term income and capital growth with the buy to let side, and then renovate and resell properties where you see the opportunities. You seem to be in quite a unique position with your skills, finance and experience.

 

[diyhelp]

If possible a mix of the two would work best - the BTL investments would give you solid long term rental income, while you could also pick and choose your times to get involved in the revamp market. Many people fail because when looking to revamp and sell on they are at the beck and call of the markets, if they turn down they might be left with a property for a while. This takes away their investment capital in the short/medium or long term and reduces their income.

 

[realdeals]

If your investment pool is large enough I would look to take in BTL and "flipping" investment strategies - especially with the skills and experience you have to hand.

 

[Daniam]

Hi Derek I am also in a very similar position, have a flat which is on the market to be rented, but looking to get onto more properties,
I have identified a few areas to invest in, the only problem is travelling to see these properties with my full time job.
How does everyone else fit it in when you have a 9-5 job?

I would like to eventually quit work but have enough passive income coming in to still be comfortable.

 

[diyhelp]

Hi @Daniam

Maybe in the early days it might pay to "stay local" and then when your business grows and becomes fulltime, you will have the time to look further afield? The last thing you want to do is stretch yourself and end up in a situation where your full time work is suffering as I presume this is your "bread and butter" income at the moment?

 

[nmb]

There is nothing wrong in focusing on local markets in the early days - better to make any mistakes closer to home (so hopefully they can be rectified) than hundreds or even thousands of miles away. As long as you learn by your mistakes there is not really a problem making them - its people who make the same mistakes time after time who should be concerned.

 

[realdeals]

The best bit of advice I could give would be to take at least a couple of years to find your feet in the property market before you start looking outside of your comfort zone. On paper property investment is simple but in practice there is a lot more to consider than many people appreciate.

 

[Daniam]

thanks guys, I think i need some financial advice, before i buy another property i don't know if i should do it through a business, sole trader or as an individual.
Do you guys go through a business ? or have a good financial advisor at hand?

 

[nmb]

It will depend on your personal situation as to whether a company might be the best route for you. I think a company is the best option if you are looking to grow the business to a decent size as there are a number of tax benefits which are not available to those investing in their own name. However, your financial advisor should be able to help you - if you have the right personal advisor they are worth their weight in gold in the long term.