Seeking advice

[JackA]

Hi, I'm extremely new to property investment and feel ready to dip my toe into the world of property.

I have 50k ready to use for investment and was wondering what is best to do with it? Would you aim for flats or houses? Try for cheap and cheerful or relatively nice house/flat (obviously then cutting into profits)?

I live in Cambridgeshire and prices at the moment round my way are ok, but not as low as I would like. I have been looking at properties in hull and was wondering would it be wise to invest there, baring in mind the distance from my home and it being my first investment? Judging by the prices there I am confident I would make a lot of profit and perhaps not even need to use a mortgage?

Any advice or tips would be greatly appreciated, cheers.

Jack

 

[totallyproperty]

Hi JackA

First of all welcome to the forum, we hope you find it useful and informative.

I note your comments with regards to a 50k investment and it is obvious that you have been looking at different markets around the UK. Some factors to take into consideration:-

Location, location, location - this is vital

Research the overall UK market as well as local markets across the country

Rental yield - I presume you are looking to buy and rent out?

Is your 50k a long term investment? Is there any chance you might need it at short notice?

Do not rush in - wait and I am sure that opportunities will arise. You are in a powerful position with 50k in cash

Start small, cut your teeth in the world of property and look to build with a long term view. You will make mistakes, as we all do, so better to make these on smaller investments in the early days.

I hope these bullet points are useful to you.

Regards,


Mark

 

[JackA]

Cheers for your reply and thanks a lot for the advice. Mind if I ask how you got into property and what stage you at at the moment? Cheers

 

[totallyproperty]

Hi JackA

My background is from the financial services industry and I have been writing about worldwide property markets for many years now. I decided to make the switch and have been working full time online for around 7 years now.

Regards,


Mark

 

[UniversityOfProperty]

I suppose it depends on what market you are looking to make a dent into? (Student property, families, young workers, professionals etc)

If you were willing to rent out to students, I would look at 3-5 bedroom flats in close proximity to your local university/college.

Not all students are going to wreck your property. However, in the case of students, I'd recommend going for "cheap, yet durable". Students can't be picky with their budget. Therefore, as long as it does the job, and it's a reasonable price, it'll be fine.

Expect damages with students. However, expect long term tenants too. Students will likely remain in your flat for their whole term times at uni.

I currently live in Edinburgh. Which means I rent out to students September through to May. However, in Edinburgh we have a festival during the summer which attracts a huge amount of tourists. Rental prices shoot through the roof during the summer times here. Which is perfect timing for me! luckily haha

As for a more direct answer to "What should I do with the 50k". I don't know what housing prices are like in your area. However. If you were to go "very cheap and cheerful" you may possible be able to split that 50K in half and put a 25k deposit onto two different flats and rent to students and still cover your mortgage. Slightly more risky though, as there's less wiggle room incase of maintanence and repairs.

My advice. Sit down with a pad and paper, and start making some sums. Pick maybe, 5 properties from RightMove or something and approximate costs, mortgage, rental income, appreciation etc. Appreciation is a difficult one in this current economy, as it'll change once we get out of the recession.

Two flats in my home town bring in £350 each of rent a month, and I spend £107 a month on mortgage each. Clear profit. However, recently I had a pesky (Only reasonably PG13 word I could think of) tenant who's cost me time, money, and probably a few grey hairs. Remember to factor in potential disasters like that. They may not happen, but better to prepare for them and still make profit than be hit with a big sledgehammer if it does happen to happen to you.

That's my two cents anyway haha