Buy To Let Basics : Hear It From The Experts

In this article I’m going to be giving an introduction, a beginner’s guide to buy-to-let property investing, maybe you’ve considered buying a house and renting it out, but you’re not sure what the pros and the cons are versus other things like cryptocurrency business or maybe buying your own house to live in so. I’m going to outline the good and the bad the pros and the cons of buying, a select property investing. I’m going to be using my experience to talk about the due diligence that you need to do before you buy a property, the types of mortgages that you’re going to need where the best areas are in the UK in 2022, and also what the next steps

If you do decide to buy a property as a buy to let how do you find it? Where do you go? Who do you talk to and what are the next steps? Firstly, by tonight investing is it good? Is it bad? There’s a lot of talk about buy-to-let being dead by till it being hard, and I don’t agree with that, because I remember people saying that 10 years ago when I first started building my buy-to-let portfolio everybody always complains and the reason I think they complain is that they haven’t got the funds.

But actually, if you have got the money, I think it’s a great investment. Let me explain why, if you put say 20,000 pounds into the stock market, let’s say on average the stock market trends up and it goes up by 10 per annum, which is about standard, and after 10 years your money has doubled. That would be a really good investment. You’D be really happy with that. I imagine. You’ve doubled your money in 10 years, but the property market historically also doubles on average every 10 years I mean.

Certainly, if you look over the last two years, it’s gone up by 10 per annum. If you look at the last 10 years, the last 20 years, that’s 50, 100 years properties double in value every 10 years. Generally speaking, if you put 20 000 pounds down in stock and it doubles after 10 years, you’ve doubled your money.

But if you put 20 000 pounds down on a buy-to-let house with a buy-to-let mortgage and rent it out, not only are you going to be getting an income from that property every single month but if that property doubles in value, you’ve not just doubled your money, have you? Because the twenty thousand pounds was the deposit? If the house was a one hundred thousand pound house and you put down 20 grand, the house doubles in value, not the deposit, so your 20 grand has now become a 200,000-pound house, so you’ve effectively not just doubled your money, but you’ve made a hundred thousand pounds profit on 20 grand.

We call that leverage and the great thing about property is that you can do this. You can’t do this with bitcoin. You can’t do this with the stock market. You can’t do this with gold and silver. You can’t borrow money from the banks to buy gold.

You can’t borrow money from the banks to buy stocks, because they’re too volatile the banks would consider it too high risk. But property is a very safe investment. It’s a very nonvolatile investment that gives you capital, appreciation, and rent, and that’s why people that make a lot of money, invest it into property ninety percent of the time, so I personally think that buy-to-let investing is a very good investment. It’s very safe sure. You can make more fast money, doing business or rent to rent, but I think buy-to-let is a very good, safe investment, and it’s done me very very well.

So where should you buy buy-to-properties? I think it’s a myth to say that you have to buy where you live, people that say they have to buy where they live.

I’ll say why and they’ll say, because if there’s a problem I’ll be able to step in that’s a terrible plan, because you know why there will be a problem and then you will have to step in and that’s not financial freedom.

That’s called a rope around your neck. That’s called a financial burden, that’s a headache. So what I would advise if you’re looking at buying today investing, is to find an area that actually works. Well, people moan, oh boy to that, doesn’t work because it might not work very well where they live, but actually find somewhere that it does work and then put a management team in place.

Typically, a management company for biotech properties will charge 10 of the rent. So if the rent’s a thousand pounds a month, they’ll take 100 pounds and then they’ll give you 900 pounds. People say: oh no! I want to make more money.

I want to make the 4 000 but then you’re going to have to manage it. You’re going to have to find and vet the tenants you’re going gonna have to collect the rent you’re gonna. If there’s any maintenance, you’re gonna have to deal with the maintenance man, the letting agent there are companies out there in pretty much every single city across the UK, where companies will offer a completely hands-off management experience for landlords and investors and them on average charge 10 of the rent, so what I would say is find an area whereby you can make good returns.

What do I mean by that? This is really really interesting, and you need to know this if you’re wanting to invest in buy-to-let property – and that is – that there is no direct correlation between house prices and market rents.

What do I mean by this? I mean if you’ve got an area whereby the house prices are a million pounds. Okay, the million pounds or the average houses are a million pounds. They’re saying I don’t know some nice part of york or something well, the rents might be a thousand pounds, but if you then find another area where the house prices are a tenth of the price they’re, not a million pounds, a hundred grand the rents will not Be a tenth of the price: the rents won’t be a hundred pounds, so there’s no direct correlation between house prices and rents, which is why I believe if you’re going to be a buy to let investor you should buy low and rent high.

I’m going to give you a poem right now. This poem pretty much sums up everything I know about biotech investing and it goes like this buy low rent high with a property manager nearby that pretty much sums up a buy-to-let property investing so find areas where you can buy houses, cheap, rent them for as high as you can with a management company so that it can be completely systemized, so where do you find these types of houses? What areas exist? Well, I’ve bought houses in places like Middlesbrough on the outskirts of manchester hall block switch.

I’ve built up a lot of my portfolio in block switch, some of the houses that I bought in blocks, which were like 65 grand they’ve now doubled in value. I’ve had the same tenants in there for over a decade, so I don’t live there.

I live in Buckinghamshire if I’m on holiday, I’m not worried thinking about what happens if there’s a problem. Why? Because my management company is taking care of everything, so, if you’re looking for a property to buy these are the things you need to do number one.

You need to look at the EPC certificate online and check that the energy performance certificate is at least a d they’re. Changing the rules and they’re saying that it needs to be a c by 2025. What this means is the house needs to be energy efficient.

So if the windows are single-glazed, the walls aren’t insulated. Then it’s probably going to be a bad energy performance house which is going to mean your bills are expensive. The tenants are going to be unhappy and you’re going to have to make improvements to the house.

You can check this on. If you just google the EPC certificate postcode, it will come up with the council website. You can search for the address and you can find out what the EPC is. You can also find on the web other interesting information like how big the house is, and how many square feet the house is.

If you know how big the house is because it’s on the EPC, you can then go on right, move, look at sold house prices, look at all the houses that sold in the street find out how much they sold for find out how big they were, and Then you can work out the value of the house before you offer on it, and you can use this as negotiation power when offering on a property number two make sure you get a server on the house before you buy it.

You want an independent building survey on the house before you buy it really really really really important number three. You want to make sure that the management company is a good management company check their reviews build rapport with them.

Make sure that the management company is good. Number four: don’t buy the first house that you see be prepared to walk away view lots of houses be prepared to walk away and work out. The return on investment return on investment is how much cash am i putting in deposit stamp duty, legal fees – let’s say 50 grand great. How much cash am am I getting back the rent minus the mortgage payments, the maintenance, the voids the management? How much profit am I expected to be making each month take your annual profit and divide that by your total investment, and that will give you your return on investment and i never buy a property unless the return on investment is a minimum of 15 per annum.

Lastly, you just got to take action.

So if you’re wanting to get into valets, pick up the phone right now and start calling estate agents telling them what you’re wanting to do, and go out there and view some houses. If you get stuck along the way message me on Instagram and I’ll help, all I can.

I am going to be running a one-day property investors crash course where we’re going to be finding live property investments across the UK. I’m going to be talking about how to package and sell deals, different investment alternatives and, ultimately, how to find your patch and how to kill it in the property market.