Hi all,
I've created a new site as I'm finding the blog is a little restrictive.
The address is: http://propertyforincome.websitewizard.com.It's a little basic at the mo, but I'll be adding more content soon.Please take a look and post a message on The Forum.If you're interesred in the site, please use the Subscribe link fromthe home page. Apologies if this email isn't appropraite to you.
Happy investing!
Matt
Tuesday, 19 June 2007
Tuesday, 3 April 2007
How to raise £48k in 2 weeks!
First off, apologies for the lack of recent updates but the last month has been a particularly stressful one!
One of my readers said he looked forward to hearing stories from me of "how not to do it" as much as "how to do it" and, sure enough, I have such an experience to recant!
I agreed to purchase a flat for 40k on 30th March. Due to a miscommunication with my solicitors, I was legally bound to buy the place on the 30th even though I didn't have a firm mortgage offer in place. The lender for the buy-to-let mortgage insisted on mortgage statements for my own home for the last 12 months. I contacted the lender (who shall remain nameless but it begins with B and ends in ritannia) for the mortgage on my own home, who after 3 attempts to send them out, finally sent them over 3 weeks later. By this point, it became clear that the buy-to-let mortgage wouldn't be ready in time for the 30th.
So, I had to find 48k (I also had another mortgage due to complete on the 30th so needed 8k for the 15% deposit) to buy the place cash whilst the mortgage was going through. I had 2 weeks to do it or face interest penalties or - if I couldn't complete within 2 weeks of the 30th - potentially up to 6k in fees! I pulled in money from wherever I could - selling shares, cashing in saving accounts, drawing cash from my business, drawing cash from credit cards and even borrowing money from a friend. And I did it - I raised 49k (leaving 1k to spare!) within 2 weeks so that I could complete on time. There were other options open to me for raising the finance quickly including bridging finance, personal loans.
So what did I learn from this:
One of my readers said he looked forward to hearing stories from me of "how not to do it" as much as "how to do it" and, sure enough, I have such an experience to recant!
I agreed to purchase a flat for 40k on 30th March. Due to a miscommunication with my solicitors, I was legally bound to buy the place on the 30th even though I didn't have a firm mortgage offer in place. The lender for the buy-to-let mortgage insisted on mortgage statements for my own home for the last 12 months. I contacted the lender (who shall remain nameless but it begins with B and ends in ritannia) for the mortgage on my own home, who after 3 attempts to send them out, finally sent them over 3 weeks later. By this point, it became clear that the buy-to-let mortgage wouldn't be ready in time for the 30th.
So, I had to find 48k (I also had another mortgage due to complete on the 30th so needed 8k for the 15% deposit) to buy the place cash whilst the mortgage was going through. I had 2 weeks to do it or face interest penalties or - if I couldn't complete within 2 weeks of the 30th - potentially up to 6k in fees! I pulled in money from wherever I could - selling shares, cashing in saving accounts, drawing cash from my business, drawing cash from credit cards and even borrowing money from a friend. And I did it - I raised 49k (leaving 1k to spare!) within 2 weeks so that I could complete on time. There were other options open to me for raising the finance quickly including bridging finance, personal loans.
So what did I learn from this:
- It's important to be clear in your communication with solicitors!
- It's possible to raise large sums of money within a short period of time by being creative
- Pressure brings out the best in me!
Thursday, 1 March 2007
A site that caught my eye
My aim is to create streams of passive income so the site below caught my eye. The author is being made redundant in 35 weeks and so he's trying various ways to generate income.
Here's the site: http://samvane.blogspot.com/index.html
Creating multiple streams of income is crucial if, like me, you want to free yourself from the rat race. Robert Allen's 'Mulitple streams of income
' is a bit of a classic on the subject.
Robert Allen also favours property as an investment and is famous for the 'No money down' concept - i.e. buying property with none of your own money involved. I've read and listened to a bit of his stuff and although a lot of it isn't possible in the UK market, there are some interesting ideas that would work here or could be tweaked to fit the UK market.
Anyway, that's all from me tonight. I'm not in a position to retire just yet, so I still have to be up early in the morning for work!
Here's the site: http://samvane.blogspot.com/index.html
Creating multiple streams of income is crucial if, like me, you want to free yourself from the rat race. Robert Allen's 'Mulitple streams of income
' is a bit of a classic on the subject.Robert Allen also favours property as an investment and is famous for the 'No money down
' concept - i.e. buying property with none of your own money involved. I've read and listened to a bit of his stuff and although a lot of it isn't possible in the UK market, there are some interesting ideas that would work here or could be tweaked to fit the UK market.Anyway, that's all from me tonight. I'm not in a position to retire just yet, so I still have to be up early in the morning for work!
And now a bit about me
Ok, now that I've covered what this blog is about, I guess I should tell you a bit about myself. I own 7 properties so far, with another 4 purchases going through at the moment.
I became fascinated with property when I was younger as I was excited by the idea that tenants would effectively buy a whole house for you! I also thought that it would be impossible for me to do it as you'd need to be rich to start with. I now know that both of those ideas is untrue. Tenants don't normally buy a house for you as, typically, property investors will go for an interest only mortgage where the capital isn't paid off. You don't need to be rich to start buying property, though it does help if you have enough cash for a 15% deposit (though there are even ways round this).
I bought my 1st house for myself to live in 1999. I still live there today. I bought my 1st investment property in 2004 for a relative to live in who was looking for rented accomodation and receiving disability benefits.
I then watched the property market in my home town (where both properties are located) boom and thought that it was far too expensive to buy another place. I decided to hold off for a while, wait for what I assumed was an inevitable crash, and start buying again.
During this time, I was reading voraciously about property investment. One of the key books I read was 'The Buy-to-let Bible
'. This taught me the concept of hotspots - i.e. areas where rental yields were high. I did some more research and discovered that there will still areas - if not my own area -that offered high yields. I could keep investing in property!
Last year, I decided to go for it and bought a couple of flats. Because I was new to the game I made a couple of mistakes: I put the flats on the market with the wrong letting agent and I didn't think to contact the local council until the flats had been on the market for a few months (some councils will rent property directly from private landlords to house tenants). The letting agent didn't find a tenant but the council were happy to rent them from me. They agreed to pay me rent regardless of whether any tenants were there and return the places to me in the same condition as when they first took them. The rent they offered was a little less than the market value but the difference was negated by not having to pay a letting agent or worry about missed rent or damage. Each flat gave me a monthly profit of around £100 per month. I now see that the same places are on the market for 25% more than I paid for them just under a year ago!
Later last year I bought 3 more places. 2 were let out via a local housing association charity who did a great job of finding tenants for me almost instantly. They generate a monthly profit of around £120 per month each. The other place was let within about 6 weeks via a letting agent. This one gives a profit of around £60 per month.
I've got another 4 purchases going through at the moment which should give a profit of around £600 per month. So that's a combined profit of around £1100 per month -not enough to retire on but a decent start!
I'm no expert, am still learning and have made a few mistakes. But I think I'm proof that it's still possible - and not that difficult - to find decent high-yielding, income-generating investment property.
I became fascinated with property when I was younger as I was excited by the idea that tenants would effectively buy a whole house for you! I also thought that it would be impossible for me to do it as you'd need to be rich to start with. I now know that both of those ideas is untrue. Tenants don't normally buy a house for you as, typically, property investors will go for an interest only mortgage where the capital isn't paid off. You don't need to be rich to start buying property, though it does help if you have enough cash for a 15% deposit (though there are even ways round this).
I bought my 1st house for myself to live in 1999. I still live there today. I bought my 1st investment property in 2004 for a relative to live in who was looking for rented accomodation and receiving disability benefits.
I then watched the property market in my home town (where both properties are located) boom and thought that it was far too expensive to buy another place. I decided to hold off for a while, wait for what I assumed was an inevitable crash, and start buying again.
During this time, I was reading voraciously about property investment. One of the key books I read was 'The Buy-to-let Bible
'. This taught me the concept of hotspots - i.e. areas where rental yields were high. I did some more research and discovered that there will still areas - if not my own area -that offered high yields. I could keep investing in property!Last year, I decided to go for it and bought a couple of flats. Because I was new to the game I made a couple of mistakes: I put the flats on the market with the wrong letting agent and I didn't think to contact the local council until the flats had been on the market for a few months (some councils will rent property directly from private landlords to house tenants). The letting agent didn't find a tenant but the council were happy to rent them from me. They agreed to pay me rent regardless of whether any tenants were there and return the places to me in the same condition as when they first took them. The rent they offered was a little less than the market value but the difference was negated by not having to pay a letting agent or worry about missed rent or damage. Each flat gave me a monthly profit of around £100 per month. I now see that the same places are on the market for 25% more than I paid for them just under a year ago!
Later last year I bought 3 more places. 2 were let out via a local housing association charity who did a great job of finding tenants for me almost instantly. They generate a monthly profit of around £120 per month each. The other place was let within about 6 weeks via a letting agent. This one gives a profit of around £60 per month.
I've got another 4 purchases going through at the moment which should give a profit of around £600 per month. So that's a combined profit of around £1100 per month -not enough to retire on but a decent start!
I'm no expert, am still learning and have made a few mistakes. But I think I'm proof that it's still possible - and not that difficult - to find decent high-yielding, income-generating investment property.
Sunday, 25 February 2007
About this blog
This blog is dedicated to helping you find, finance and let high-yielding buy-to-let property in the UK.
What's a high-yielding property? I would define a high-yielder as 8%+. Yield is calculated by taking the annual rent and dividing it by the purchase price, e.g., £1000 annual rent / £100,000 purchase price = 10% yield.
Why high-yielding property? Because high-yielding property will, if chosen wisely, put money in your pocket each month. What's more, the idea that capital appreciation is sacrificed for a higher-yield isn't true in my experience. Properties which offer a high-yield are always attractive to property investors. As the rental income increases, the yield gets higher and so becomes more attractive to investors, which creates upwards pressure on the price.
What's a high-yielding property? I would define a high-yielder as 8%+. Yield is calculated by taking the annual rent and dividing it by the purchase price, e.g., £1000 annual rent / £100,000 purchase price = 10% yield.
Why high-yielding property? Because high-yielding property will, if chosen wisely, put money in your pocket each month. What's more, the idea that capital appreciation is sacrificed for a higher-yield isn't true in my experience. Properties which offer a high-yield are always attractive to property investors. As the rental income increases, the yield gets higher and so becomes more attractive to investors, which creates upwards pressure on the price.
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Perhaps the best book I've read on property investing! Unlike many buy-to-let books, The Buy-to-let Bible provides specific, practical advice that you can use rather than woolly theory.