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First time BTL Investment : 40K budget

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Dear Forum Members
I have started my search for BTL property at Manchester / Liverpool area. This will be my first BTL. I live near greater London.

Can anyone share their experience on
1) Specific postcodes to buy
2) Rental demand
3) Is Salford good for an investment area

4) HMO vs traditional residential property

5)  Is it better to invest near flat near London considering long term rental demand and capital growth ?

6) Risk of investing into HMO as first BTL



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Hello @Sachin Welcome to the forum.

I don't think HMO with this budget is feasible and you will not have any lenders available to finance HMO or conversion to HMO as a first BTL. They need to see you already have BTL and/or own property.

Can you please elabotate more on your goals and what you are looking to achieve with your first BTL and long term goals?


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You will learn a lot with your first BTL and I personally think that HMOs are much more complicated so may be best left until you have learned the basics.

I also prefer to buy close to where I live as it is much easier to keep an eye on things and you are less dependent on someone else to look after your property. You can also keep the costs down if you are on hand to do minor repairs, decorations etc. I appreciate in London this may be tricky.

Is your £40k budget your total - deposit + mortgage? It's a bit low to be honest and you may be very limited to what and where you can buy.

Good luck :)

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@julia urquhart

Thanks a lot for your advice. 40k is my deposit + any other expense and hoping to get first property around 150K-175K

I will focus more on local area (Slough/Maidenhead) + residential property as many experienced investors suggested earlier. 

Any handful tips where I get balanced capital growth and rental yield ?  

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@sachisd I tagged the wrong person in my previous reply :D

For BTL, you would need to have 25% deposit of the purchase price. It would be stretched to get a house in the price you are looking for. I guess your first purchase would be a BTL mortgage, and not looking for a BRR property?

This is why I was wondering about your long term goals if to grow a portfolio.

Finding a place with the good balance of capital growth, good rental and below 100k is a challenge :)

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Thanks @Alvin

My long term goal is to have property portfolio and generate good passive income.

I am newbie but can see BRR strategy is good way to generate money as long as correct purchase of property and overall condition of it.



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Hi Sachisd,

Some of the cheaper areas that I'm aware of close to London are Luton/Bedford if you want something to the North West of London. Might be able to get something in Stevenage/Hatfield but a bit more pricey. To the North East of London I believe Harlow is fairly Cheap. To the South East of London Chatham is cheap. Bare in mind many of the cheaper areas close to London are cheap because they are less desirable areas, but should give you good rental yields. Capital growth maybe not as great depending on how things go.

For 150k - 175k you may be able to get a studio flat in some parts of London like a Thornton Heath or similar areas, but would take patience and maybe some haggling.

Maz Tzeggai
Mortgage & Protection Adviser

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