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Newbie worried to take that leap!


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Hello!

 

So I'm a 24 year old that's been a little bit obsessed with getting involved in the property market for the past 3 years or so.

I've had decent jobs, I've been travelling for the past year and now I'm back in the UK ready to 'start my career'.

I've managed to secure a really good graduate scheme which I will start next week. Now the initial plan was to buy my first home within the next 8 months of working, live in it, do it up, move onto another home and turn this first house into a rental. Great. But this takes time and money. And I'm impatient and have little money (travelling for 10 months instead of 5 will do that to you).

 

I've listened to the recent podcast Rob Dix shared talking with petra about her rent-to-rent business. I didn't even know this was a thing! I've watched hours of webinars and read so many articles and really feel like this is something I could get involved in. You need little start up money. You need the drive to do it. A lot of profit can be made with the conversion of a home to a HMO and I feel I understand the student and young professional market enough to do that. 

 

Now here is my dilemma. This would be my first actual step. My first leap into the industry. I'm forever doubting myself on my knowledge so I thought I would come here to seek the answers I think I already know.

 

I'm looking at properties in the Manchester area, outside of the city centre, either Salford or adjacent to Oxford Road for the Student/Young Professional market. I am on rightmove constantly and can't believe the amount of properties that are 'Available now!'. Does anyone have any insight as to why this is? Is it just that the demand is there so it's a thriving market, or is it the opposite and properties aren't renting any more?

 

If anyone has any words of advice or can give me a kick up the backside to actually take that leap then please send it my way!

 

Thank you all!

Emma

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Hi Emma,

 

I'm in a similar position - mid-twenties and very inexperienced. I've got my first property under my belt, and am looking to grow my portfolio, but am super cautious about tying up too much capital or getting thing wrong. As to seeing so much property 'available now', truthfully, there's an enormous shortage. When you consider the variations people look for on price, location, size, style etc. and then the number of people actually looking, the handful of properties you're looking aren't really as many as you might initially think.

 

I'd recommend meeting a couple of people that are on the same kind of path as you. Some inexperienced, some more seasoned - speak to them regularly and by doing so you'll gain some confidence in your own abilities and insight. Eventually, you've just got to take a leap - that's the really scary bit, but honestly, if so many other people can manage it, why not you too?

 

Happy to chat further if you'd like - with new ventures, I sometimes find that having a weekly catch-up with someone is a useful motivator!

 

Kind regards,

 

Henry

 

 

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Reason you're seeing so many 'Available Now' may be because if you're renting out say a 6 bed HMO there's a good chance you'll always be only a few weeks / months away from needing a new tenant. So a lot of Landlords keep there properties on the market. Ever noticed some of the adverts will say 'Has been on the market for 2839 days'? That's those guys. 

 

R2R sounds great on paper, but the reality is very different. Finding Landlords willing to let you do this is going to be your biggest hurdle. The actual management of the HMO is pretty straight forward. But given the changes that have come about in tax recently, there aren't many landlords who are able to leave money on the table. So if you can rent it off them for £1k and sub tenant it for £2k... that's a big incentive for the Landlord to do it themselves. 

Sure there are always some that want the easy life, but nowadays that is going to be even more restricted to Landlords who probably don't have any finance on the property. 

If you go for it, be aware of the massive time investment up front to find your first deal. 

 

As an aside, that's why so many people are doing webinars and upselling you onto courses, because it's a great sales pitch - Make Loads of Money, No Money Required. 

Most of these people talk more than they do. 

 

 

Other thing to bear in mind. You've got minimal experience and minimal cash to invest. But you're keen to get into property. 

 

How many people does that describe? There are virtually no barriers to entry with this business model. So you might be the 4th or 5th person to ask a Landlord if you can R2R their property off them. 

The biggest barrier to entry is being a quitter, so most people will start and not be successful immediately so will give up. If you're willing to stick with it, I'm sure you'll eventually find something. Once you've got that first one under your belt it will become easier. 

 

 

 

Sorry to sound like a Debbie Downer on your plans, just think it's important to get a reality check before you spend a crap load of time on something. 

 

It's definitely doable and profitable if you can make it work though. 

Damien Fogg
MRICS CeMAP CeFA

Email: damien@theepinvestor.com

Web: www.theEPinvestor.com

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