Best of luck with your investment. Personally I can’t wait to get rid of my last property having had five at one time. Those trips to B&Q will be never ending. In your figures where is your budget for EPC, Fixed wiring electrical check, gas checks and service costs, smoke and Co2 checks carried out by the letting agent, quarterly property inspections, re-decorating and letting fees when tenant moves out each year and so it goes on with new legislation coming along every year. Water checks next I understand. Sorry if I sound a bit negative but I think the good times have long gone for landlords.
Thank you for calling this out. I have just purchased a property from a landlord so got to understand my home as an ex-rental. Mitch has vastly under estimated the costs, which I would be extra surprised about this endeavour if he's not already a home owner. But, judging by the Audi and Lotus he has something (or someone) paying the bills.
Congratulations mate! I have been tempted to do this but i just keep throwing all my spare money into my VUSA isa. I just don’t think I could handle the stress of managing a property!
Thanks! I’ve done a bit of both, started off investing in equities and now diversified into property. I’ve got the estate agents managing the property so hopefully I get a good tenant and it’ll be less stressful!
Congrats. Don’t get your strategy of interest only? At some point when you start paying a repayment mortgage your payments are going to skyrocket and you’ll be lucky if you break even.
Been thinking about dipping a toe in these sometimes treacherous waters. Been offered a deal by a family business that locates, refurbs and tenants and property before selling on to the investor and rents (6%, they get 2%) are guaranteed plus any refurbs needed in first 3 years. Sounds champion. Except a bit or research immediately shows that the sell on price to the investor is upto 20% over market value. So they are immediately taking out any future increase in value. One example is a 3 bed house they want 77k and in the same street is a property at 60k with a sitting tenant who has been there 12 years.
Congratulations 🎉 I would invest in Stocks and Dividends get same ROI without hassle of none paying Tantent and Interest rates hikes. Secondly I can sell my shares anytime and no hassle of chasing buyers, agents and solicitors for paperwork. I might get 1-2% less but I will be stress free 😀
Yeah it’s a fair point. It’s the only feasible way for me to utilise the money I have within my business though. If I were to withdraw it and pay income tax at 40% it wouldn’t leave me anywhere near as much to invest in stocks
Well done brave thing to do it’s not for everyone as things sometimes go wrong. Look forward to seeing your journey on this product, thanks for sharing.
5.59% rate is huge Mitch ! waaw 111.30 interest on 391.30 represents 28%. Either you found a good opportunity either you over estimate the rent. The viability of this investment is made by the fact that you bring 25%. I would never pay 850 pounds/month for 1 bed apartment except in London in UK to be fair. it's like throwing money by windows..
I am not saying it's a bad investment, not at all, it's fine. I mean from the renter view, it looks so obvious that they can do the same operations instead of throwing so much money by windows. I ve got a fixed rate of 1.3% on 20 y for info by bringing 2% only.
@@jonathantennantphotography2869 well it's like paying 2 times the price at this rate. it's not a real problem for Mitch because it's the renter that pays. In the case of 15%, it's like you pay back 3 times the appartment to the bank. The question of interest rate applied might change easily your cash flows.
Also, I noticed your msaintenance for taps/leaks is 41 quid per month, you can go to British Gas for unlimited call outs for leaks on taps, toilets, blocked drains inside and outside your home for around 180 per year.Or that plus home electric and the boiler breakdown cover and the entire central heating (radiators) for at least 300/400 per year which is still LESS than your maintaintence you put aside for taps. Just thought let you know
Congratulations. I know someone who buys properties with interest only mortgages and they wait for the property value to go up and then sell it at a profit and pay the bank off. They do this on multiple properties. Probably more risky.
Congratulations Mitch🎉 must’ve been a great feeling once it had all gone through. Me and my partner want to do this and are currently saving towards a deposit amount and all the extras👍
I love this channel, the content is always excellent and the attention to detail is awesome. Out of interest, what region are you based in to get this ROI?
Hi Mitch, massive congrats. Just to let you know some solicitors will pay to get on the lenders board for you, so you can still go through that. My solicitors did this recently on two purchases I had going through.
Well done Mitch 👏🏾, the first one is always a goody. Your rate was pretty good though, will have to chat with my mortgage broker about my rates with Precise.
I’ve just had a look at your figures, and you seem to not have included. Voids ground rent and service charges. I’m guessing that you will not make a profit in year one. You will, however, make a profit as interest rates go down. Whenever that happens. Where you make money on property is when you remortgage if your figures are correct here. Then I personally would sell all my buy to let’s straight away.
Thanks Luke - no just figured it all out myself as I went along! For the more part solicitors, mortgage brokers and estate agents can help give you the answers regarding the process once you’ve started
Congrats Mitch, don’t forget to add annual gas boiler services and smoke detectors etc! These are your legal responsibility now. Did you mention buildings insurance also ? Also expect more £ for maintenance. Well done though. I have a few now after many years of being put off by watching “bad tenants” TV programs 😂
Hi Mitch, thanks for the upload, absolutely loved your financial breakdowns and its very detailed and helpful as always. Sorry for bothering if you have time but may i know how you got to the 7.81% on your Post Tax ROI? Sorry I am a beginner but really want to get into the property ladder....
To allow the property to positively cash flow in the short term, with the aim to reduce the principle over the next 2 years to allow me to put it on capital repayment afterwards and for it to positively cash flow still👌🏼
Why the interest obly mortgage ? Are you not missing a benefit of accumulating the principal equity? Or was it just the 2 year fix to get it over the line and remortgage later with the hope of lower rates?
Mate your channel is unreal , you have a new subscriber. I wanted to ask and do you think it’s sensible to buy a property now considering that the interest rates are so high even though the property prices have been extremely low ?
What rate did the lender measure the stress testing at ? 125 percent of the rent or 145? Presumably it is leasehold as well how did the lender find that ? That is a good yield for a property worth 112k . I would like to set my own limited company up for my next property purchase as I will be pushed into a higher tax bracket if I do it in personal name was it hard to do . Thanks
Hi Mitch, can you clarify something for me please. I thought you could no longer take your mortgage payments from your top line to work out your taxable profits? Have i picked this up wrong.
Hi can you please explain this I don’t understand with the BTL if you pay 20% of the value of the house and get a 2 years does this mean at the end of the 2 years you would have to pay another 20% and start again
That is always so painful! I am in the proces of purchasing my 2nd BTL flat and the service charges are taking a big chunk of the profits. When it comes to my 1st BTL they went up from £70 to £150 in a space of 2-3 years. Be aware of that.
@@annastachowiak2692 yeah the same happened on this property recently annoyingly! Everyone seems to be hiking their rates just generally. I’m also happy to sacrifice a little on the rental income if I need too
@@MitchShoesmith lots of it seems to be due to tightening fire risk regulations separate to EWS1 requirements. I also believe it is still worth to invest. Good luck!
i'm looking to buy my first home too in the next year or so. is there a specific company you use for mortgage advisors? or does it just depend on where you're based and the local companies there?
@@MitchShoesmith I'm looking just to buy my first home. I'm from Scotland so not sure if there are other ways to get help from government toward it/deposit. I have a good deposit and even more spare, but I'd rather keep some of it for doing the house up etc and use any gov schemes to cover the rest. any tips?
@@MitchShoesmith really? That sounds very unusual are you sure? Usually the landlord pays those fees as they are to do with the property maintenance side etc?
He has to make a profit to pay tax inside the company. I think it’s unlikely you’ll make any money. He needs the interest rate to drop then he’s going to be in profit. After five years, he will take out the extra value from the property in the form of a mortgage.
Just sold all mine....no money in it, pain of upkeep and not liquid.
And pay capital gains?
Yup. 30k worth
Should have done Airbnb
Happy Wednesday! I hope you enjoyed the video and seeing my first hand experience of stepping into the world of property investing 🏠
Best of luck with your investment. Personally I can’t wait to get rid of my last property having had five at one time. Those trips to B&Q will be never ending. In your figures where is your budget for EPC, Fixed wiring electrical check, gas checks and service costs, smoke and Co2 checks carried out by the letting agent, quarterly property inspections, re-decorating and letting fees when tenant moves out each year and so it goes on with new legislation coming along every year. Water checks next I understand. Sorry if I sound a bit negative but I think the good times have long gone for landlords.
Thanks! Haha yeah I can imagine with 5 on the go! Hoping my B&Q trips will be over for a while now 😂
PS. I have been following you for some time and do enjoy your channel. Keep up the good work.
Thank you for calling this out. I have just purchased a property from a landlord so got to understand my home as an ex-rental. Mitch has vastly under estimated the costs, which I would be extra surprised about this endeavour if he's not already a home owner. But, judging by the Audi and Lotus he has something (or someone) paying the bills.
@@Rowan126 never took a handout from anyone, everything I own has come off my own hard work 👍🏼
@@MitchShoesmith well done mate, fair play to you then. I hope this works out for you.
Congratulations mate! I have been tempted to do this but i just keep throwing all my spare money into my VUSA isa. I just don’t think I could handle the stress of managing a property!
Thanks! I’ve done a bit of both, started off investing in equities and now diversified into property. I’ve got the estate agents managing the property so hopefully I get a good tenant and it’ll be less stressful!
Congrats. Don’t get your strategy of interest only? At some point when you start paying a repayment mortgage your payments are going to skyrocket and you’ll be lucky if you break even.
Been thinking about dipping a toe in these sometimes treacherous waters. Been offered a deal by a family business that locates, refurbs and tenants and property before selling on to the investor and rents (6%, they get 2%) are guaranteed plus any refurbs needed in first 3 years. Sounds champion. Except a bit or research immediately shows that the sell on price to the investor is upto 20% over market value. So they are immediately taking out any future increase in value. One example is a 3 bed house they want 77k and in the same street is a property at 60k with a sitting tenant who has been there 12 years.
Congratulations 🎉 I would invest in Stocks and Dividends get same ROI without hassle of none paying Tantent and Interest rates hikes. Secondly I can sell my shares anytime and no hassle of chasing buyers, agents and solicitors for paperwork. I might get 1-2% less but I will be stress free 😀
Yeah it’s a fair point. It’s the only feasible way for me to utilise the money I have within my business though. If I were to withdraw it and pay income tax at 40% it wouldn’t leave me anywhere near as much to invest in stocks
@@MitchShoesmithwhy is it less tax to earn your income via being a home owner vs withdrawing your funds from stocks/ your RUclips business?
although dividends is low risk, housing is still king. no matter what, land will forever have value. rain or shine, society or no society.
@MitchShoesmith you could pay into your pension account directly from your company
thanks for this. 32 myself and maxed the last 4 years isas. considering doing this myself! good info thankyou
Well done brave thing to do it’s not for everyone as things sometimes go wrong. Look forward to seeing your journey on this product, thanks for sharing.
Yeah for sure! Appreciate that, thanks!
Congrats Mitch, enjoyed this video. Some good yield there, hope it goes well
Thanks Tom!
This was a great watch, definitely more of this please
Thanks!!
Well done mate , I try and listen to your videos as regularly as I can.
Congratulations Mitch! Looks like a great flat 😎 Great job turning it around and good luck with the new property venture mate 🏠👍
Thanks !
5.59% rate is huge Mitch ! waaw 111.30 interest on 391.30 represents 28%.
Either you found a good opportunity either you over estimate the rent.
The viability of this investment is made by the fact that you bring 25%.
I would never pay 850 pounds/month for 1 bed apartment except in London in UK to be fair.
it's like throwing money by windows..
I am not saying it's a bad investment, not at all, it's fine.
I mean from the renter view, it looks so obvious that they can do the same operations instead of throwing so much money by windows. I ve got a fixed rate of 1.3% on 20 y for info by bringing 2% only.
5.59% is standard. I remember interest rates at 15% so there's still more to come. I'm looking at studio apartments 300 sq feet in london on for £300k
@@jonathantennantphotography2869 well it's like paying 2 times the price at this rate. it's not a real problem for Mitch because it's the renter that pays. In the case of 15%, it's like you pay back 3 times the appartment to the bank. The question of interest rate applied might change easily your cash flows.
Also, I noticed your msaintenance for taps/leaks is 41 quid per month, you can go to British Gas for unlimited call outs for leaks on taps, toilets, blocked drains inside and outside your home for around 180 per year.Or that plus home electric and the boiler breakdown cover and the entire central heating (radiators) for at least 300/400 per year which is still LESS than your maintaintence you put aside for taps. Just thought let you know
That’s interesting - thanks for sending that over, definitely worthwhile considering a policy like that!
Well done Mitch great to see your progress and how you share your journey with us. Onwards and upwards!
Thanks mate!
Top man Mitch! I love it, your doing great! Your videos are very informative and helpful, thank you for being so transparent.
Thanks Jacob, glad they’re useful!
Wow, congrats mate! I'm very pleased for you - well done 👊
Thanks so much!
@@MitchShoesmith btw, has anyone mentioned that you like kinda like iBallisticSquid? 😆
Big ups Mitch, checks you whipping in the lotus loveeee it! Appreciate the work bro 💸💸
Thanks man!
good vid mate, very bold in these times! how are you coming to 7.8% on that Post Tax ROI?
Great video Mitch. Very insightful!
Thanks!
great video! I had a quick question if I may. What is your ground rent/maintenance fees since this is a flat?
Great video!! Thanks for sharing your journey
Thanks!
Congratulations. I know someone who buys properties with interest only mortgages and they wait for the property value to go up and then sell it at a profit and pay the bank off. They do this on multiple properties. Probably more risky.
Thanks! Yeah that’s definitely one strategy that investors use, I may also look to lump sum off the principle too at points in time as well.
Congratulations mate, well done🎉
Thanks Patrick!
Congratulations Mitch, noticed you have a Lotus and an Audi also! 🎉 £825 a month?! Strewth
Thanks mate!! Yeh £825 a month if I achieve is insane
Congratulations Mitch🎉 must’ve been a great feeling once it had all gone through. Me and my partner want to do this and are currently saving towards a deposit amount and all the extras👍
Great video, very informative for people like myself looking to get into real estate, keep up the good work👌
Thanks! Glad it was useful!
Bravo! Mitch! Congrats!
Thanks so much!
Well done Mitch ......great time to buy. Unsure where you are but there's a huge demand for rental as a lot of landlords are getting out
Thanks Jonathan! Yeah that’s what the estate agents have said to me too
There is a reason why landlord are getting out
@@MeMe-wz5hv I can totally understand why if it’s in their personal name, slightly different if it’s being run as a Ltd co
Great vid mate. Good luck with it! Have recently discovered your channel, love it. Subbed
Thanks mate!
I love this channel, the content is always excellent and the attention to detail is awesome. Out of interest, what region are you based in to get this ROI?
Really appreciate that mate! Based in the midlands
Hi Mitch, massive congrats. Just to let you know some solicitors will pay to get on the lenders board for you, so you can still go through that. My solicitors did this recently on two purchases I had going through.
Thanks Josh! Really useful to know 👌🏼
@@MitchShoesmith You’ve got my email if you need anything else. I purchase sleep 16+ holiday let’s normally, good cash flow right now.
congrats mitch well deserved.
Thanks mate!
Well done Mitch 👏🏾, the first one is always a goody. Your rate was pretty good though, will have to chat with my mortgage broker about my rates with Precise.
Thanks Anthony!! Yeh they were one of few lenders left on the table but fortunately worked out
I’ve just had a look at your figures, and you seem to not have included.
Voids ground rent and service charges. I’m guessing that you will not make a profit in year one. You will, however, make a profit as interest rates go down. Whenever that happens.
Where you make money on property is when you remortgage if your figures are correct here.
Then I personally would sell all my buy to let’s straight away.
Great detailed video!
Thanks!!
Congrats Mitch.
Thanks!
Congrats man really enjoy ur channel
Awesome man
Thanks!
Love the original content!
Thanks!
Congrats on your first purchase Mitch - about to start the process myself. Did you get any advice/external consultation on the process?
Thanks Luke - no just figured it all out myself as I went along! For the more part solicitors, mortgage brokers and estate agents can help give you the answers regarding the process once you’ve started
Congrats Mitch, don’t forget to add annual gas boiler services and smoke detectors etc!
These are your legal responsibility now. Did you mention buildings insurance also ?
Also expect more £ for maintenance.
Well done though. I have a few now after many years of being put off by watching “bad tenants” TV programs 😂
Thanks! No gas in the property which is good, all on electric, and yes I've got buildings insurance for the property too :)
@@MitchShoesmithNo Gas means no one can afford to heat the flat. Welcome to the world of black mould.
bro...is there a lease on that flat?
How long is your lease & did you equate for service charges too Mitch? Well done you. onwards & upwards 👊🏾
Hi Mitch, thanks for the upload, absolutely loved your financial breakdowns and its very detailed and helpful as always. Sorry for bothering if you have time but may i know how you got to the 7.81% on your Post Tax ROI? Sorry I am a beginner but really want to get into the property ladder....
What's the thinking behind going for an interest only mortgage agreement?
To allow the property to positively cash flow in the short term, with the aim to reduce the principle over the next 2 years to allow me to put it on capital repayment afterwards and for it to positively cash flow still👌🏼
No service charge? That is often the biggest expense.
Why the interest obly mortgage ? Are you not missing a benefit of accumulating the principal equity? Or was it just the 2 year fix to get it over the line and remortgage later with the hope of lower rates?
Yeah exactly, just to get it over the line to begin with, will reassess in a couple of years
Mate your channel is unreal , you have a new subscriber. I wanted to ask and do you think it’s sensible to buy a property now considering that the interest rates are so high even though the property prices have been extremely low ?
What rate did the lender measure the stress testing at ? 125 percent of the rent or 145? Presumably it is leasehold as well how did the lender find that ? That is a good yield for a property worth 112k . I would like to set my own limited company up for my next property purchase as I will be pushed into a higher tax bracket if I do it in personal name was it hard to do .
Thanks
Congrats Mitch. Why do you have to pay stamp duty on a property at that price?
Thanks! It’s because it’s a buy to let rather than a residential purchase
Yeh mate, sounds good on paper.. kinda sick mate Charging 850pm for 1 bed in Birmingham. Keep the poor poor. Your what’s wrong with this system
That’s it, keep blaming everyone else for your issues 😂
No the issue is an over population - something is worth what someone is willing to pay
Hi Mitch, can you clarify something for me please. I thought you could no longer take your mortgage payments from your top line to work out your taxable profits? Have i picked this up wrong.
Hey, I think you’re referring to the tax changes when you buy a BTL in your personal name, when it’s a LTD co it works different ☺️
Hi can you please explain this
I don’t understand with the BTL if you pay 20% of the value of the house and get a 2 years does this mean at the end of the 2 years you would have to pay another 20% and start again
Hello! May I ask about ground rental and service charges costs please? Unless you found a freehold flat
Service charge & ground rent is quite expensive, it’s around £200 a month
That is always so painful! I am in the proces of purchasing my 2nd BTL flat and the service charges are taking a big chunk of the profits. When it comes to my 1st BTL they went up from £70 to £150 in a space of 2-3 years. Be aware of that.
@@annastachowiak2692 yeah the same happened on this property recently annoyingly! Everyone seems to be hiking their rates just generally. I’m also happy to sacrifice a little on the rental income if I need too
@@MitchShoesmith lots of it seems to be due to tightening fire risk regulations separate to EWS1 requirements. I also believe it is still worth to invest. Good luck!
i'm looking to buy my first home too in the next year or so. is there a specific company you use for mortgage advisors? or does it just depend on where you're based and the local companies there?
For the BTL I used LnC mortgages (just found them on google), if I’m honest though they weren’t great and would probably use another company next time
@@MitchShoesmith I'm looking just to buy my first home. I'm from Scotland so not sure if there are other ways to get help from government toward it/deposit. I have a good deposit and even more spare, but I'd rather keep some of it for doing the house up etc and use any gov schemes to cover the rest. any tips?
Good insight. However I’m assuming you’ll have to pay ground rent and annual service charge as the property is a flat / leasehold?
Thanks Tom, yes, but I’ll pass that cost on to the tenant though
@@MitchShoesmith nice one. Good video and it’s great to see real figures
Excellent video, what area are you achieving this in? A 1 bed flat in my area starts at about £250k 😢
Thanks!! It’s in Birmingham! Where do you live? Surely down south?
@MitchShoesmith hi Mitch, yes I'm in Surrey, Guilford area.
112k is a bargain 🎉
Will you be paying of the mortgage every year in term of long term on keep intrest only as is it
I’ll keep it interest only for the first 2 years and likely lump sum a chunk off after the first 2 years is up for renewal
1 bed flat, no ground rent or service charge etc?
Yeah ground rent and service charge but it’ll be payable by the tenant which I why I didn’t include it in the figures
@@MitchShoesmith really? That sounds very unusual are you sure? Usually the landlord pays those fees as they are to do with the property maintenance side etc?
Nice Video, have you managed to get a tenant in yet ?
Not yet, only went on the market yesterday. Got block viewings on Saturday so fingers crossed!
is it just me or is the video FPS really low?
How long is the lease?
BTL is a terrible business idea. You get taxed at the same rate as your income rate. The bank takes its cut from intereat
He has to make a profit to pay tax inside the company. I think it’s unlikely you’ll make any money. He needs the interest rate to drop then he’s going to be in profit.
After five years, he will take out the extra value from the property in the form of a mortgage.
What area of the uk is this property?
Will your tenant be responsible for the ground rent?
Zero profit then. 100% transparent?
This is why capitalism is Cole.