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First Time Investor with £35,000 in Southeast of England


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Hi Everyone,

Im about to ask a question that i'm sure is posted on here on a daily basis but no matter how many pods i listen too or how many articles i read i find my head spinning and unable to make a decision.... maybe i'm suffering from analysis paralysis? 

The Facts:

Im 25 and own my own house (with a mortgage) i have £35,000 ready to invest and could potentialy take some more equity out of my current home if i needed to about another £15K.

I Live in Portsmouth and i know everyones stats and saying my area is probably the worst place to invest for capital growth right now.

In an ideal world I want to by distressed property add value and Re finance / let out to try and build up to 2 BTL in 2 years but i am time poor and will be looking to get someone to do the work for me.

I know if invest in an area away from me such as greater Manchester or Nottingham i would have better capital growth but the thought of investing far away stresses me out and if i'm honest scares me so i would like to invest locally in Portsmouth where i can be closer to the action and possible self manage. 

 

Should i be braver and invest further away or is there still room for some growth and opportunity locally in Portsmouth? im thinking the slow market may give me a chance to pick up a bargain in my area and give me the room for capital growth that way?

 

has anyone on here started in a similar position to me and can you give me any advice?

 

Thanks in advance!

 

 

 

 

 

 

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  • 2 weeks later...

Hi Lewis,

I just wanted to respond to your post - specifically about investing remotely and share some of my experiences.  I used to live in Newcastle Under Lyme, and then moved to Cardiff, which is around 150 miles away and rented out my own home instead of selling it.  I also remortgaged my own home at the same time to release some money for a deposit in Cardiff. 

The original house was rented out using a letting agency and to be honest I don't think I could have done it by trying to self manage - the distance is too great.  The letting agent is also a nice buffer between me and the tenants.  I just accept the agency fees as a cost and ensure I've got enough money to pay for repairs as and when they are needed.  I've gone up to 3 years in between visits and it's a very hands off investment.

For example, once tenancy was signed and then weeks later the people moved out and just informed the agency that they didn't want the house anymore.  The agency dealt with it all for me and we sorted it amicably without too much stress.  It was something that agents are used to dealing with so helped me out massively. 

I made the move in 2005 so 14 years ago and I guess at the time my decision was different than yours in that life changes decided that I was moving and I didn't see it as a conscious decision to invest remotely - rather a decision of "how can I keep the house"?

In hindsight it was a very good decision - so much so that when I recently started to expand my portfolio it felt like a "no brainer" to me to invest in Newcastle Under Lyme again and just use a letting agent to manage the property.

One thing I will say as a slight negative is that making several trips on several weekends to find a property can be a little time consuming, but my strategy is simply to buy nice houses (one or two every year) so I'm only looking every 5-6 months or so.

Also perhaps a slight head start I had was that I already had a relationship with one estate agent through my original investment - but to be honest having taken the time to speak to a number of agents and do plenty of viewings, the relationships with others have come quite quickly.

 

hope that helps inform your decision.  If I can be of any more help let me know.

 

cheers

 

Andy

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Spending a bit more time on your goals and what you hope to gain from investing in property might be useful. if you are purely after a good return, given that you are time poor, a hands off investment might be better. If you are a property addict and see your future career in property full time, then maybe something closer, more hands on allowing you to build your skills would be better.  

Additionally, you are 25.  If you think long term, then how much will those houses and houses in general be worth when you are 65? 100%/200%/300%/400%.... the value that they are now? The minor regional variations now are likely to be insignificant when compared with general house price inflation over the long run.

There is something to be said for investing in your own patch.  You know the area - the good bits and bad bits down to individual street or house level.  Yes, you can try to get this information from an estate agent, but it isn't first hand, its their opinion.

In your local area you have the ability to exploit your other networks to identify opportunities, rather than just relying on estate agents, sourcing agents etc.  

If anything does go wrong, you can easily nip round and fix it.   

HTH

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9 hours ago, AndyJ said:

Hi Lewis,

I just wanted to respond to your post - specifically about investing remotely and share some of my experiences.  I used to live in Newcastle Under Lyme, and then moved to Cardiff, which is around 150 miles away and rented out my own home instead of selling it.  I also remortgaged my own home at the same time to release some money for a deposit in Cardiff. 

The original house was rented out using a letting agency and to be honest I don't think I could have done it by trying to self manage - the distance is too great.  The letting agent is also a nice buffer between me and the tenants.  I just accept the agency fees as a cost and ensure I've got enough money to pay for repairs as and when they are needed.  I've gone up to 3 years in between visits and it's a very hands off investment.

For example, once tenancy was signed and then weeks later the people moved out and just informed the agency that they didn't want the house anymore.  The agency dealt with it all for me and we sorted it amicably without too much stress.  It was something that agents are used to dealing with so helped me out massively. 

I made the move in 2005 so 14 years ago and I guess at the time my decision was different than yours in that life changes decided that I was moving and I didn't see it as a conscious decision to invest remotely - rather a decision of "how can I keep the house"?

In hindsight it was a very good decision - so much so that when I recently started to expand my portfolio it felt like a "no brainer" to me to invest in Newcastle Under Lyme again and just use a letting agent to manage the property.

One thing I will say as a slight negative is that making several trips on several weekends to find a property can be a little time consuming, but my strategy is simply to buy nice houses (one or two every year) so I'm only looking every 5-6 months or so.

Also perhaps a slight head start I had was that I already had a relationship with one estate agent through my original investment - but to be honest having taken the time to speak to a number of agents and do plenty of viewings, the relationships with others have come quite quickly.

 

hope that helps inform your decision.  If I can be of any more help let me know.

 

cheers

 

Andy

Hi Andy,

 thank you very much for taking the time to reply to my post I really appreciate it.

 It’s great to hear from someone like yourself who has done it already and but the sounds of it not looked back. I suppose the concern for me is taking the time to build trust worthy relationships but like you say once I have one down the relationships will hopefully be easier to build. 

Do you usually buy property’s ready to go or have you ever brought and refurbed? 

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Hi Lewis,

just to answer your question - you asked if I usually buy properties "ready to go" or refurbish.  I don't think I've bought enough stuff to say that I usually do one thing or the other to be honest.  I've just bought 2 this year to add to my original home and as it happens they are both nice houses that don't need any work (well maybe a lick of paint here and there).

that's not to say that I avoid refurbs - just that I haven't found one yet that works for me.  if I'm honest what happened is that when I remortgaged my original home to release capital - that was the point at which I could (should?) have done one deal on a refurb as I had enough money to do one.  But I got excited and bought a nice terraced house leaving only enough to buy another terrace with the remainder.

I'm just getting started myself.  One thing you mention in your original post is you want to buy distressed property, add value and refinance.  I think this is commonly known as BRR and the main advantage of that is that you can recycle some or all of your money.  it's also apparently good if you can find deals that stack up as you can attract investment to scale up quickly.

My strategy is somewhat simpler in that I can afford to save a deposit for a nice house roughly every 9 months so I plan to just keep buying regularly with a "slow and steady wins the race" mindset.  Admittedly not everyones cup of tea but that's my plan for now and I'll see how it goes.

 

hope that helps.

cheers

 

AJ

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