I’m a plumber and I,look for houses that need a bit of work , I buy then rent and sit back, but I have to work my arse of looking after them I’m always down a toilet or in a minging roof space , so they call it passive but I’d call it hard work, but I’m working for myself, I have took a bit of a hit with interest rate but I’m still making a decen5 profit and my houses are going up in value every year , I enjoy the work so I shouldn’t be moaning really I’m also bringing my son in on the business, working it’s a nice way of life
I used option 3 mainly, buying in a nice area, near good transport links and a major employer ( large hospital) . I’d researched the historical prices and noted a 7% average increase. Buying run down , smelly places in need of a refurb ( only one needing windows , so mostly carpets and paint), added value, but didn’t take long or much skill & cost. Then remortgaging to buy another ( very little work needed) was achievable. With just 3 properties ( with 3 there isn’t too much day to day maintenance and such), they achieve >£2800/month rent after cost + capital growth. I’ll wait to see what the budget brings. I’m not buying any more due to tax implications, the Gov sentiment and the uncertainty. But I have bought a large holiday let place.
@ It is straight forward rental, not HMO ( which would generate more) or SA. First choosing the right area - near a hospital, somewhere I’m familiar with, where no other houses can be built ( already a built up area) with good transport links. Find undervalued property ( run down, needing perhaps windows and all the carpets ripping out etc), get in first ( have notifications and visit all the estate agents to be on their radar), cash buyer ( or with a ready to go mortgage), an area that is a little nicer as it attracts better clients, keep an eye on the market and charge the market rate - don’t fall behind and then need to increase the rent more one year to cover unforeseen policy changes, costs etc. I’m reluctant to part with these but want to travel more. But leaving them with a manager is another option.
Buy smelly houses because you can get them really cheap. Upgrade them and if your total costs (Purchase Price/ Legals/ SDLT/ Refurb costs) are 75% or lower than the end valuation you can refinance all of your capital out and go again.
We use have used all of these strategies at some point over the past 10 years and managed to get 5 properties, with 330k in equity, with a £1.9k pm 'passive' income after expenses, and £100k cash ready to reinvest, so it can be done, even in these economic times. Being a landlord though is not entirely passive income, there always seems to be something that needs our time and attention, and that's using an agent to manage them!
It’s funny because I just broke through 3k and invested about 300,000. I didn’t refinance yet but that would be the best option for me. The tactic I used was to find short leasehold properties in high value areas and then factor in the cost of the lease extension in the purchase. This is abit of paper work but is better than the three methods above if you ask me
Alternatively open up a stock & shares ISA, invest up to 20k per year tax free on something stable like the S&P 500 that gets you on average 15-20% ROI. Property is more hands on and not to mention the extra cost like legal fees, agent fees, stamp duty, taxes etc.
History of the S&P's 500 ROI does not guarantee the same future returns. Personally, I would be very wary investing in a manipulated market, bot driven and financed by billions of quantitive easing. I can see a financial markets crash on the horizon and would rather invest in property. At the end of the day, property will always be worth something and people will always need a roof over their heads.
@@stevenhull5025 Everything these days looks to be the equivalent of an endowment mortgage!!! Oh take this endowment mortgage out with its projections (Note the word projections) of 5% 8% growth (In the beginning the projections are 3% but don't worry about that the projections will increase over the term of the mortgage!!! it will pay off your mortgage at the end of term!!!! hahahahahha We all know what happened with many of them....🤣🤣🤣 Annual shortfalls the endowment will not pay your mortgage!!!! ALERT ALERT!!!
Every time you remortgage though you make way less per month on the one you’ve remortgaged. On one of my properties the mortgage was initially £160 per month. Bought for £100k, mortgage of £75k. It’s worth £170k now so I could remortgage it upto £127,500, leaving £42500 deposit in, clear the current £75k and have £52,500 to buy a £200k house. I’m reluctant to do it though as the £162 per month mortgage has already jumped up to £262 at 4% when rates were rising. I’m going to almost double the mortgage, so say £460 per month. So that’s £200 less per month I’ll make on that property. At £650 per month rent I barely clear £300 per month as it is. Would that house be worth the hassle for £100 per month after £200 mortgage increase. Yes a £200m house may get me £800 rent so £400 net but take off the £200 loss on original one and I’m only £200 per month up after all that. Yes capital gains would be on two houses now instead of one but I’ll get taxed a huge chunk of that anyway. Kinda thinking I’m better just paying the £52k off my own mortgage which would equate to almost £100k over the term with interest. Tell me I’m wrong. 🤔
@@marky9117 you are totally correct . The government would take 40% of grass rent as tax. The government would also take 28% or 18% as capital gains tax when you sell. People making. such videos need an education in profit and tax calculation.
Its the stamp duty that puts me off by to let, that money is gone.......no tax write off, nothing. First two years income and growth already eaten up by taxes....so whats the point ?
What about buy a slightly bigger main residence, say worth 450k. Use your high income to pay off the mortgage within 10 years. That one property for rental at approx 1500£. Repeat once more all done. None of this flipping around.
I ve invested in properties since 2010.. currently have 12 properties … I am afraid all these strategies r perfect on paper but does not work in real life
@@maril8501 Lower your expectations… its much less Rosy in reality than what u see on youtube… the revenue as best modest. The expenses can be huge.. try to calculate every penny Build the staff around you… solicitor, accountant, mortgage broker, builder and project manager.. they all should be trustful, decent, high IQ, and easy to communicate with. Flipping does not work.. dont even try it.. if u bought a house of 100k, spend 30k renovate then sell it for 180k.. will this example is already a fairy tales.. but even if u manage to achieve it, the 50k will be eaten by legal fees, bridge mortgage, stamp duties, capital gain and cooperation tax or income tax whether u bought it on yr name or on a company name… plus u sometimes have to wait a yr to sell for 180k… if u thought rent it out, u wouldnt be able sell it
At 40 the wife and I have bought our first property to rent. The idea is to aim for 3 before I'm 50. With the high interest rates and unpredictability at the time we took a short term fixed mortgage. But in future will be going the interest only mortgage root in a bid to get the second and third property faster. We had to save for the 25% deposit and reckon it will take another 4 years to do the same again. But we're in it for the long haul as a pension/earlier retirement, so house prices won't be an issue.
When Starmer arranges matters so that 1. There's no right to evict and no court system to back it up 2. Rent caps 3. Capital gains hikes 4. Tightening EPC regulations and, added to this, causes the usual Labour crash of the economy, you'll be bankrupt. I'm pulling my investments out of the UK.
I’m reluctantly moving to flipping property. Strategies 2 and 3 are much more susceptible to down valuations from the bank. In which case you’re stuck. Flipping via a limited company also gives you a bit of wiggle room with claiming back the VAT spent on labour and materials.
Option 3 appeals to me most as well. What happens if there’s a crash a la 2008 and there are exceptional circumstances where the bank calls the note on your £XXXk of debt? Genuine question, as that is what happened to Dave Ramsey and I’m a subscriber of his too. Cheers. 🍻
If 2008 happens again, then 99% of the property guru channels turn into debt advice channels. You also hope you have not overleveraged and can sell enough property at a profit to cover the debt.
@@hustlinmagic This is my concern exactly. The video is put together very well, and he’s a property expert in spades. But there’s one factor that’s rarely explored or considered in any length, by anyone online in the property game- Risk.
I follow Dave too and when I hear theses property guru's encouraging people to refinance and to keep doing it Daves voice rings in my ear and make me cautious.
Very stressful, I’ve got 5 units and don’t want anymore stress. You also can’t sell effectively due to capital gains. Buy hold forever is the only strategy that works but comes with a ton of stress. I don’t care what anyone says.
@@marlonpdavidsso what do you think is the right thing to do is in your case? Keep holding on to them? And if you had a chance back in time, would you have invested elsewhere? Like stocks?
@@lifeofranco not the guy you're replying to, but having a diversified investment strategy is always the best thing to do. No-one can tell me otherwise. Personally, I think the housing market in the UK is going to have some turbulence over the next decade, regardless of what Labour do. Same with stocks, ETFs, bonds etc. Diversifying into different investments should mitigate some of the risk, though.
3 is more for capital growth. 5 to 7 years ago were Birmingham and Manchester with insane appreciation. You can still get them but the assets here are now pricy.... I'm sure there are other areas that might experience such growth but I haven't done that detailed research cos I don't need to
@@domever7899 I don’t have any mortgages. At one point I owed the bank 1.5m but I paid off the debt about 5 years ago. I used to profit from my company to clear the mortgages.
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I’m a plumber and I,look for houses that need a bit of work , I buy then rent and sit back, but I have to work my arse of looking after them I’m always down a toilet or in a minging roof space , so they call it passive but I’d call it hard work, but I’m working for myself, I have took a bit of a hit with interest rate but I’m still making a decen5 profit and my houses are going up in value every year , I enjoy the work so I shouldn’t be moaning really I’m also bringing my son in on the business, working it’s a nice way of life
I used option 3 mainly, buying in a nice area, near good transport links and a major employer ( large hospital) . I’d researched the historical prices and noted a 7% average increase. Buying run down , smelly places in need of a refurb ( only one needing windows , so mostly carpets and paint), added value, but didn’t take long or much skill & cost. Then remortgaging to buy another ( very little work needed) was achievable. With just 3 properties ( with 3 there isn’t too much day to day maintenance and such), they achieve >£2800/month rent after cost + capital growth. I’ll wait to see what the budget brings. I’m not buying any more due to tax implications, the Gov sentiment and the uncertainty. But I have bought a large holiday let place.
How do you get such high returns? Is this SA or a HMO strategy?
@ It is straight forward rental, not HMO ( which would generate more) or SA.
First choosing the right area - near a hospital, somewhere I’m familiar with, where no other houses can be built ( already a built up area) with good transport links. Find undervalued property ( run down, needing perhaps windows and all the carpets ripping out etc), get in first ( have notifications and visit all the estate agents to be on their radar), cash buyer ( or with a ready to go mortgage), an area that is a little nicer as it attracts better clients, keep an eye on the market and charge the market rate - don’t fall behind and then need to increase the rent more one year to cover unforeseen policy changes, costs etc.
I’m reluctant to part with these but want to travel more. But leaving them with a manager is another option.
I’m a first time landlord and this is helpful for a newbie like me. It’s the long game I’m focusing on. Thanks for sharing.
Buy smelly houses because you can get them really cheap. Upgrade them and if your total costs (Purchase Price/ Legals/ SDLT/ Refurb costs) are 75% or lower than the end valuation you can refinance all of your capital out and go again.
Buy 3 numbers of 5 bed HMOs in a good area, rent it to social housing associations , each can make up to 1000£ net per month.
We use have used all of these strategies at some point over the past 10 years and managed to get 5 properties, with 330k in equity, with a £1.9k pm 'passive' income after expenses, and £100k cash ready to reinvest, so it can be done, even in these economic times. Being a landlord though is not entirely passive income, there always seems to be something that needs our time and attention, and that's using an agent to manage them!
It’s funny because I just broke through 3k and invested about 300,000. I didn’t refinance yet but that would be the best option for me. The tactic I used was to find short leasehold properties in high value areas and then factor in the cost of the lease extension in the purchase. This is abit of paper work but is better than the three methods above if you ask me
300k in equity or total property value?
Alternatively open up a stock & shares ISA, invest up to 20k per year tax free on something stable like the S&P 500 that gets you on average 15-20% ROI. Property is more hands on and not to mention the extra cost like legal fees, agent fees, stamp duty, taxes etc.
History of the S&P's 500 ROI does not guarantee the same future returns. Personally, I would be very wary investing in a manipulated market, bot driven and financed by billions of quantitive easing. I can see a financial markets crash on the horizon and would rather invest in property. At the end of the day, property will always be worth something and people will always need a roof over their heads.
@@stevenhull5025 Everything these days looks to be the equivalent of an endowment mortgage!!! Oh take this endowment mortgage out with its projections (Note the word projections) of 5% 8% growth (In the beginning the projections are 3% but don't worry about that the projections will increase over the term of the mortgage!!! it will pay off your mortgage at the end of term!!!! hahahahahha We all know what happened with many of them....🤣🤣🤣 Annual shortfalls the endowment will not pay your mortgage!!!! ALERT ALERT!!!
It's easier to leverage property
Every time you remortgage though you make way less per month on the one you’ve remortgaged.
On one of my properties the mortgage was initially £160 per month. Bought for £100k, mortgage of £75k.
It’s worth £170k now so I could remortgage it upto £127,500, leaving £42500 deposit in, clear the current £75k and have £52,500 to buy a £200k house.
I’m reluctant to do it though as the £162 per month mortgage has already jumped up to £262 at 4% when rates were rising. I’m going to almost double the mortgage, so say £460 per month. So that’s £200 less per month I’ll make on that property. At £650 per month rent I barely clear £300 per month as it is. Would that house be worth the hassle for £100 per month after £200 mortgage increase. Yes a £200m house may get me £800 rent so £400 net but take off the £200 loss on original one and I’m only £200 per month up after all that. Yes capital gains would be on two houses now instead of one but I’ll get taxed a huge chunk of that anyway.
Kinda thinking I’m better just paying the £52k off my own mortgage which would equate to almost £100k over the term with interest. Tell me I’m wrong. 🤔
The remortgaging over time only works if the rent has gone up sufficiently
@@marky9117 you are totally correct .
The government would take 40% of grass rent as tax.
The government would also take
28% or 18% as capital gains tax when you sell.
People making. such videos need an education in profit and tax calculation.
What do you think in off plan properties??
Its the stamp duty that puts me off by to let, that money is gone.......no tax write off, nothing. First two years income and growth already eaten up by taxes....so whats the point ?
If you do nothing, you'll get nothing. What is a small amount of tax if you could be building a portfolio.
What about buy a slightly bigger main residence, say worth 450k. Use your high income to pay off the mortgage within 10 years. That one property for rental at approx 1500£. Repeat once more all done. None of this flipping around.
Enjoyed this video, Rob. I think Option 2 is the way forward
I ve invested in properties since 2010.. currently have 12 properties … I am afraid all these strategies r perfect on paper but does not work in real life
What would you say are the main considerations to minimize the risks, based on your experience please 🙏
@@maril8501
Lower your expectations… its much less Rosy in reality than what u see on youtube… the revenue as best modest.
The expenses can be huge.. try to calculate every penny
Build the staff around you… solicitor, accountant, mortgage broker, builder and project manager.. they all should be trustful, decent, high IQ, and easy to communicate with.
Flipping does not work.. dont even try it.. if u bought a house of 100k, spend 30k renovate then sell it for 180k.. will this example is already a fairy tales.. but even if u manage to achieve it, the 50k will be eaten by legal fees, bridge mortgage, stamp duties, capital gain and cooperation tax or income tax whether u bought it on yr name or on a company name… plus u sometimes have to wait a yr to sell for 180k… if u thought rent it out, u wouldnt be able sell it
What method did you choose while building your portfolio?
With flipping if you aren't careful you'll end up.being flipped . Even the seasoned developers get flipped as well
How much do you clear each month?
At 40 the wife and I have bought our first property to rent. The idea is to aim for 3 before I'm 50. With the high interest rates and unpredictability at the time we took a short term fixed mortgage. But in future will be going the interest only mortgage root in a bid to get the second and third property faster.
We had to save for the 25% deposit and reckon it will take another 4 years to do the same again. But we're in it for the long haul as a pension/earlier retirement, so house prices won't be an issue.
I'm at a similar age and thinking about doing the same. Good luck.
I’m shocked that the HMO strategy wasn’t addressed!!!
Crime infested. Councils cutting down on HMO licenses. Too many criminals.
When Starmer arranges matters so that 1. There's no right to evict and no court system to back it up 2. Rent caps 3. Capital gains hikes 4. Tightening EPC regulations and, added to this, causes the usual Labour crash of the economy, you'll be bankrupt. I'm pulling my investments out of the UK.
I’m reluctantly moving to flipping property. Strategies 2 and 3 are much more susceptible to down valuations from the bank. In which case you’re stuck.
Flipping via a limited company also gives you a bit of wiggle room with claiming back the VAT spent on labour and materials.
Right, and what about the people who can save 20k in 5 years?
With 20k capital, what can we do?
(Specially alone, no wife, gf)
Not sure I understand the part about you saying 36k 7roi etc
You don't mention affordability checks done by lenders, which would make option 2 very difficult
Option 3 appeals to me most as well. What happens if there’s a crash a la 2008 and there are exceptional circumstances where the bank calls the note on your £XXXk of debt? Genuine question, as that is what happened to Dave Ramsey and I’m a subscriber of his too. Cheers. 🍻
If 2008 happens again, then 99% of the property guru channels turn into debt advice channels.
You also hope you have not overleveraged and can sell enough property at a profit to cover the debt.
@@hustlinmagic This is my concern exactly. The video is put together very well, and he’s a property expert in spades. But there’s one factor that’s rarely explored or considered in any length, by anyone online in the property game- Risk.
And what happent if the interest rate goes up like before 18%
I follow Dave too and when I hear theses property guru's encouraging people to refinance and to keep doing it Daves voice rings in my ear and make me cautious.
ROI in London is nothing like 7%.. Significantly lower than this.
The '3+1 Theory' (book) by Bret Algre-Wood ?
Your video .. 7% is way off mark ... after factoring inflation tax repairs
The video could be realistic..by saying ...a blueprint to achieve 3.5%
And for the Sanjay’s out there what would you recommend?
Property is stressful. It’s not passive. I have a 6m portfolio.
Not bad considering your full of shit.
Very stressful, I’ve got 5 units and don’t want anymore stress. You also can’t sell effectively due to capital gains. Buy hold forever is the only strategy that works but comes with a ton of stress. I don’t care what anyone says.
@@marlonpdavidsso what do you think is the right thing to do is in your case? Keep holding on to them?
And if you had a chance back in time, would you have invested elsewhere? Like stocks?
@@lifeofranco not the guy you're replying to, but having a diversified investment strategy is always the best thing to do. No-one can tell me otherwise.
Personally, I think the housing market in the UK is going to have some turbulence over the next decade, regardless of what Labour do. Same with stocks, ETFs, bonds etc. Diversifying into different investments should mitigate some of the risk, though.
@4:40
Then the tax authority chases you for not paying tax on the £20k.
Number 3 sounds too slow lane. 12 years to make £3k a month, by which time won't be worth close to what it is today.
Inflation will eat it and that's excluding taxes. So in real terms £800 considering the way things are going up
3 is more for capital growth. 5 to 7 years ago were Birmingham and Manchester with insane appreciation. You can still get them but the assets here are now pricy....
I'm sure there are other areas that might experience such growth but I haven't done that detailed research cos I don't need to
@Dipo_Miller don't forget, rent and property goes up with inflation generally.
Small problem: I don’t have £100,000 lying around ready to invest
Property is stressful. It’s not passive. I have a 6m portfolio.
Out of interest, is your equity 25%? Which method did you use to build the bulk of your portfolio?
@@domever7899 I don’t have any mortgages. At one point I owed the bank 1.5m but I paid off the debt about 5 years ago. I used to profit from my company to clear the mortgages.
@@domever7899 I used the profits from my company to clear the mortgages.