Am I Crazy to be Starting My Property Journey now?

[josephbrown1997_gmail_com]

Hi everyone,

Just interested to hear your thoughts and (I hope, reassurance ) on my position/plans going forward. 

I'm 23, have been saving, reading and learning for years, and last year brought my own home for £165k. Then in March just gone, I had an offer of £131k accepted on a property with tenants in situ paying £670pcm, which is due to complete in the next few weeks. I've also today had another offer accepted on another property of £114k with rent expected between £575 & 600.

I'm hoping to have both these through, up and running by the end of September, giving me a profit of around £6500 per year extra to my income (which stands at approximately £42k per year from regular work) I then plan to spend this year saving heavily again (possibly dabbling in some share investments to diversify a little and make the most of the stock market slump) and in a few years to use this property income to fund some time traveling abroad.

But am I crazy to be jumping into this now? Not only gritting my teeth and going ahead with my first btl which was agreed in March, but also being stubborn and pushing ahead with my original plans/goals regardless of corona and buying a second??

I am looking long-term and personally think we're in a middle-cycle wobble and that things will improve significantly in the next 12-18months. I also only plan to buy two buy to lets (plus my own home to convert to a buy to let at some point) in the next few years anyway, so feel like I may as well do this now, get them both setup in one go together and then I can move onto other focuses/projects in my life.

But would you guys from an outside perspective think I'm being too bullish? Should I be more worried? I know no-one knows, but opinions from others who also understand property and the idea of pursuing success is always interesting to read!

Cheers, Joe 

[nicholas_b]

Hi Joe, 

They sound like good, realistic yields so the figures seem to stack up from a cashflow and investment perspective. In terms of capital growth, both Robs seem to think we are due to have some form of mini boom due to quantitative easing so there is potential for capital growth too. 

Hard to comment on if the houses are good value or not from an outside perspective, as only you will know this based on your research. If you are worried about prices dipping then I wouldn't let that deter you if you are in it for the long term, because over time the majority of property prices generally go up at a good rate (better than inflation) so it's better to invest then leave the money sat in the bank. It also gives you the opportunity to remortgage and grow in the longer term.

If you're wondering about property prices dipping then it is really difficult to say, most of the changes in the economy generally affect renters opposed to owners. The govt knows how important house prices are and an active market because it makes people feel rich and encourages spending so theyll do all they can to keep it buoyant. 

If the numbers are there then go with it...there's rarely the perfect time to buy. Also at 23 if you hold them, I believe you will see a good return over the years.

Best of luck.