Money - Making it and saving it

[TrentVilla]

2 hours ago, Xela said:

Cheers. Good tip about being near hospitals. Never thought about that. I guess from a local perspective that would mean Selly Oak, but that also happens to be student central.

I guess near a train station is also a good selling point

You're welcome. Or there are areas around Good Hope in Sutton that would be good, I nearly bought a couple of flats there a few years back.

Train stations, yes. I meant to say that, I'd look at properties close to the line from Sutton.

A question though, does it need to be in Birmingham? Its peoples natural thought process, buy local but there isn't really a need to do it. I'm assuming you'd use a letting agent (I strongly recommend it), in which case you will likely almost never step foot in the place. I've got a property I've not even seen in 4 years, the agent takes care of everything.

So have a think about that because if you are willing to go outside of Brum there are some great buys to be hand, with far better yields particularly in the North East. You could in some areas have 3 or 4 properties for your money, spread the risk of no rent periods and have a larger income.

[Stevo985]

I'm considering doing that.

I'd like to let my current house, but part of me thinks I'd be better off selling it and investing the equity into an investment property somewhere else.

I wouldn't really know where to start in terms of buying a property somewhere else though.

[omariqy]

I actually bought a flat near Brindley Place and the yield is fantastic. It's more an income play for me rather then worrying about massive capital growth. I live in London so as Trent says get the agent to manage it. I dont see the place and just let it run in the background.

[Stevo985]

I was also considering somewhere around the financial hub in Brum.

[TrentVilla]

7 hours ago, Stevo985 said:

I wouldn't really know where to start in terms of buying a property somewhere else though.

Which is why most people buy to let properties local to them or in areas they know well but it can be costly doing that.

First thing I've been doing is tap up people you know from other areas about the market. Not thought about it before but on here would be a useful source of info.

It just comes down to research, all the info is fair easily available with the internet. You can view the properties, look at recently sold prices, look at rental incomes and how many properties are on the market. You can also use Street View which is a great tool to use before travelling to view as nobody should buy without viewing.

The other thing I've been doing is speak to local agents once I've found possible locations, the ones that do lettings. If you tell them you are a buyer looking for a rental property they will tell you the areas, property types in demand (if in demand) and the likely rental incomes.

The two cities I'm going to look at are Sheffield and Newcastle.

[TrentVilla]

7 hours ago, omariqy said:

I actually bought a flat near Brindley Place and the yield is fantastic. It's more an income play for me rather then worrying about massive capital growth. 

With that sort of location you are probably okay anyway on the capital growth/protection.

My issue with a lot of city centre flats are quite numerous.

A lot post 2008 have been thrown up/together as cheaply as possible because they were already committed to the projects before the crash.

I know you say you aren't worrying about capital growth but that's an informed choice and decision. A lot of people have city centre flats that they are now in negative equity on or buy them thinking they will go up and they don't/won't.

In a lot of areas there are simply too many flats to meet demand which makes selling a property hard because why would someone buy in a private sale when they can buy in new developments. There also often too many on the rental market.

Then there are also things like service charges, ground rents and the obvious leasehold issue. 

So my personal preference is small 2/3 bedroom houses.

[omariqy]

5 hours ago, TrentVilla said:

.... there are also things like service charges, ground rents and the obvious leasehold issue. 

So my personal preference is small 2/3 bedroom houses.

All valid points and the service charge can be a killer. Luckily I purchased a flat which is about 15 years old and therefore it was quite reasonable. I looked at some flats near New St station which have just been built and some were charging about £3k for the year. That's crazy money.

[Xela]

Some good advice on this page, thanks chaps.

In terms of buying a property outside of Brum, its something I've never thought about. But you are right, there is no reason why I couldn't do that. 

Also, it seems that properties in less salubrious areas tend to generate a higher yield? A basic example being - a £200k flat in Sutton wouldn't generate twice the rental income of a £100k flat in Erdington

[Mark Albrighton]

1 hour ago, Xela said:

Some good advice on this page, thanks chaps.

In terms of buying a property outside of Brum, its something I've never thought about. But you are right, there is no reason why I couldn't do that. 

Also, it seems that properties in less salubrious areas tend to generate a higher yield? A basic example being - a £200k flat in Sutton wouldn't generate twice the rental income of a £100k flat in Erdington

Yeah that's it more or less it I believe. A house that's twice the purchase price won't guarantee twice the rental return.

I think if I wanted to get into renting out property and had £200k to spend, I'd be looking at a couple of £100k properties rather than spending £200k on one (more appealing) property. I think you stand a better chance of collecting a greater yield. Of course you potentially have twice the headaches with tennants, legal fees, etc

As has been mentioned before, location in relation to amenities is important. Going back a fair bit now (the 1970's), but when my Dad moved up here to work in Telford, the majority of employees either lived in Newport or Shifnal. The house prices were higher by around 10% in Shifnal mainly because of the train station (Newport not having one). 

Dion on Homes under the hammer has you covered mate!

[TrentVilla]

2 hours ago, Xela said:

Some good advice on this page, thanks chaps.

In terms of buying a property outside of Brum, its something I've never thought about. But you are right, there is no reason why I couldn't do that. 

Also, it seems that properties in less salubrious areas tend to generate a higher yield? A basic example being - a £200k flat in Sutton wouldn't generate twice the rental income of a £100k flat in Erdington

You're welcome.

And yes exactly that, only thing to counter balance that though is that you are unlikely to do as well on any increase in the property value. 

I'm currently looking for my next one also looking at the holiday let market.

[Risso]

13 minutes ago, TrentVilla said:

You're welcome.

And yes exactly that, only thing to counter balance that though is that you are unlikely to do as well on any increase in the property value. 

I'm currently looking for my next one also looking at the holiday let market.

We're doing some holiday lets at the moment and we currently have two on the go.  One was an old workshop in our garden, so we didn't want to do long terms lets, and the second is a cottage a hundred yards away or so.  We could have rented it out and got maybe £1,200 a month for it, but instead we're doing holiday lets and charge that a week.  There are more costs involved and obviously it won't be full every week, but it's still massively more beneficial than just long term renting.  Just about to start on a third one as well, so by the end of this year will have a decent little holiday rental business.  There was a fairly steepcapital outlay in getting them all done up, but everything we take now is pure profit, more or less.

[TrentVilla]

Just now, Risso said:

We're doing some holiday lets at the moment and we currently have two on the go.  One was an old workshop in our garden, so we didn't want to do long terms lets, and the second is a cottage a hundred yards away or so.  We could have rented it out and got maybe £1,200 a month for it, but instead we're doing holiday lets and charge that a week.  There are more costs involved and obviously it won't be full every week, but it's still massively more beneficial than just long term renting.  Just about to start on a third one as well, so by the end of this year will have a decent little holiday rental business.  There was a fairly steepcapital outlay in getting them all done up, but everything we take now is pure profit, more or less.

Very nice too.

I'm looking to buy somewhere in a little place on the Norfolk coast we visit 2 or 3 times a year pretty much every year. Would nice to stay in our own place rather than a rented one and it would more than pay for itself the rest of the year. Over the years I'd hope to rent it less and use it more.

Its just raising the required capital thats the issue as my mortgage lender has decided they will no longer release equity for other property purchases.

[Xela]

Thread necromancy

I'm lucky enough to have a decent amount of cash saving tucked away in cash ISAs and various other easy access accounts. Unfortunately they pay on average about 0.5% interest so in real terms my money is losing value every year. Looking to moving from saving to investing but very wet behind the ears. Any starter tips? Or podcasts/blogs/youtube channels that anyone can recommend. 

I get the basics - passive or active funds and levels of risk (i'd say i'm medium 75% high 25% - at my age I can afford to take a punt).

I do also have a fair number of shares in my employer which generate good dividends but i'm loathe to have too much exposure to one stock.

I've kind of cooled on the idea of a 2nd property chiefly due to the extra stamp duty implications for 2nd houses. If I can get a similar return with investing then i'd rather do that. 

[mottaloo]

1 hour ago, Xela said:

Thread necromancy

I'm lucky enough to have a decent amount of cash saving tucked away in cash ISAs and various other easy access accounts. Unfortunately they pay on average about 0.5% interest so in real terms my money is losing value every year. Looking to moving from saving to investing but very wet behind the ears. Any starter tips? Or podcasts/blogs/youtube channels that anyone can recommend. 

I get the basics - passive or active funds and levels of risk (i'd say i'm medium 75% high 25% - at my age I can afford to take a punt).

I do also have a fair number of shares in my employer which generate good dividends but i'm loathe to have too much exposure to one stock.

I've kind of cooled on the idea of a 2nd property chiefly due to the extra stamp duty implications for 2nd houses. If I can get a similar return with investing then i'd rather do that. 

Duuuur !!! Buy your own desi pub !! Job done 

[coda]

[Xela]

Just now, mottaloo said:

Duuuur !!! Buy your own desi pub !! Job done 

Talking of which, one has opened over our side... The Mount Tavern is now desi!

Quote

A rundown pub in the heart of Kingstanding has been reborn into an east meets west restaurant and grill following a six-figure makeover.

The Mount Tavern, situated on Kings Road near New Oscott, will open its Desi pub-style Indian grill on Friday, February 9.

https://www.birminghammail.co.uk/whats-on/food-drink-news/new-desi-pub-replace-landmark-14253339

[AvfcRigo82]

15 hours ago, Xela said:

Thread necromancy

I'm lucky enough to have a decent amount of cash saving tucked away in cash ISAs and various other easy access accounts. Unfortunately they pay on average about 0.5% interest so in real terms my money is losing value every year. Looking to moving from saving to investing but very wet behind the ears. Any starter tips? Or podcasts/blogs/youtube channels that anyone can recommend. 

I get the basics - passive or active funds and levels of risk (i'd say i'm medium 75% high 25% - at my age I can afford to take a punt).

I do also have a fair number of shares in my employer which generate good dividends but i'm loathe to have too much exposure to one stock.

I've kind of cooled on the idea of a 2nd property chiefly due to the extra stamp duty implications for 2nd houses. If I can get a similar return with investing then i'd rather do that. 

Do you have any areas specifically in mind where you might like to dabble or are you in the open mindset of looking into anything that could yeild some decent return?

[Xela]

6 hours ago, AvfcRigo82 said:

Do you have any areas specifically in mind where you might like to dabble or are you in the open mindset of looking into anything that could yeild some decent return?

Probably want to avoid magic beans and crypto currency and stick to more established investments like bonds, equities, gold etc. 

[Davkaus]

Depends what your goals are for the money. Is it a rainy day fund (that you might want to access at short notice), or is it going to be put away for several (5+) years? If the latter, a low cost index fund is the way to go.

My sensible investing ('m dicking about with canadian cannabis stocks at the moment, but only with money I'm prepared to lose :P) goes in to a Vanguard 100% equities fund. Minimal charges (about .45% including the platform fee) and it tracks worldwide indexes. Historically it'll return around 7%, though there's obviously no guarantees

If you want more short term access, cash is best. This is a good site for maximising interest in current accounts (which pay more interest than ISAs). I wouldn't bother with cash ISAs these days, unless you have a very large stack of cash meaning you want to max out your ISA allowance each year.

[Xela]

Cheers @Davkaus. I'm happy to play the medium to long game (5 years plus). I keep £20k-£30k aside as a emergency fund but the rest of it i need to get working harder as its just losing money in a 0.65% ISA and 0.45% instant access fund. 

I probably (nay, definitely) don't have the patience to keep switching accounts to get switching bonuses or introductory rates. 

A few people have mentioned Vanguard so I will check them out, thanks.