Buying a place

[MarillionFan]

We've (my friend) has approached local housing associations who can't (apparently) get enough houses. He's fairly local, although, obviously, I am not. This wasn't meant to be a plan B, and the friend is getting slightly carried away on numbers, but I thought buying 5 would minimise risk, given if the money was paid up front, you could either recoup the money, or reinvest to mitigate the risk. I simply cannot imagine the houses getting cheaper. However, on a larger property, I can; I dont see how that end of the market, in that location, could marginalise more than a larger house in the area could, if that makes sense.

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There is a poster who infrequently posts on here who already does this with quite a few houses. I dont believe you want to buy outright though as any income will be fully taxed, so a balance of mortgage / income needs to be struck. Wrapping up in a Ltd & providing shares/divvy payments to the shareholders(which could include the kids) could be a good investment.

[rootsnall]

I simply cannot imagine the houses getting cheaper.

They can, housing benefit puts a floor under it to some extent but streets and areas do descend into the boarded up stage and then they are worth nothing. Thats why you can get them for 30K when interest rates are so low ! If interest rates took off then I think you'll find pockets of the North could quite easily become worthless once DHSS people don't want to live in them.

[Old Hack]

There is a poster who infrequently posts on here who already does this with quite a few houses. I dont believe you want to buy outright though as any income will be fully taxed, so a balance of mortgage / income needs to be struck. Wrapping up in a Ltd & providing shares/divvy payments to the shareholders(which could include the kids) could be a good investment.

I am selling up in Spring, and was thinking, with this friend, of pumping £100k into a ltd (each) as a loan, then take the loan repayments from the rent, or simply reinvest and pull out the money at a later date.

His ideas are a little more ambitious, with pumping in one house a year from our contracting money (he's a Java code monkey) and building a portfolio, in which we could eventually draw down the money, from the continual loans, then use as a legit business. I believe that's a bit of a pipe dream, but am tempted on the potential 10% yield on the money, given my mortgage would only be around 3% if I kept a smaller one.

It all depends on the inevitable question with the wife, as we'd not be mortgage free as planned.

But if you look through the auctions, and then check the rentals in the area, you'll see what I mean. I can't get anywhere near that on my places, no where. On the 3 bed we only get £1300 and couldn't get more. So currently, if you ignore the mortgage, on the house and bungalow we get about 4.2% yield (combined). The only area the houses are better in Surrey, is that the prices have increased by a small margin (2%) year on year. That end of the market in Stoke has plummeted in the past 4 years.

[Old Hack]

They can, housing benefit puts a floor under it to some extent but streets and areas do descend into the boarded up stage and then they are worth nothing. Thats why you can get them for 30K when interest rates are so low ! If interest rates took off then I think you'll find pockets of the North could quite easily become worthless once DHSS people don't want to live in them.

Why would they no longer wish to live in them?

[Bunk]

10k for you to prove you own a gypsy caravan and a bedsit in the France. You could buy both for <10k you chippy loon.

How about 10k for me to pop outside, write Old Hack is a Chippy Loon and place it in front of a San Diego roadsign. :Rollin:

Wait a minute, you told me you've already been doing that all over California

[Old Hack]

There is a poster who infrequently posts on here who already does this with quite a few houses. I dont believe you want to buy outright though as any income will be fully taxed, so a balance of mortgage / income needs to be struck. Wrapping up in a Ltd & providing shares/divvy payments to the shareholders(which could include the kids) could be a good investment.

MF, serious note here. Do you not think aloud about plan B's at all? In my down time, I don't think I think of much more than how to get out, to do something else. The only thing that has stopped me, thus far, is that I'd have to work much harder for, if I am lucky/succesful, similar reward, and that's what keeps me contracting. Plan B's? I have plan B's, C's and right on through the alphabet, but none give as much, for as little. The only way I could see me getting a good plan B, would be to take 12-18 months out developing the idea I have, and I have seen people penniless from doing similar.

Contracting is the vicious mistress whom you long to leave, but can't, she's a bitch, but she's such a good **** you can't leave her behind. That's the problem with it, in my opinion.

[mudskipper]

Trouble at home? Who's moving out him or you

Him - hopefully - as in eldest son who moved in for 2 weeks last February...

[MarillionFan]

MF, serious note here. Do you not think aloud about plan B's at all? In my down time, I don't think I think of much more than how to get out, to do something else. The only thing that has stopped me, thus far, is that I'd have to work much harder for, if I am lucky/succesful, similar reward, and that's what keeps me contracting. Plan B's? I have plan B's, C's and right on through the alphabet, but none give as much, for as little. The only way I could see me getting a good plan B, would be to take 12-18 months out developing the idea I have, and I have seen people penniless from doing similar.

Contracting is the vicious mistress whom you long to leave, but can't, she's a bitch, but she's such a good **** you can't leave her behind. That's the problem with it, in my opinion.

Of course I do. So does TestMangler, we sometime discuss them. We were both talking about a Loan Pay Day company about 18 months ago. I think TM has done something.

I've had a go at a number. I talked about it and opened a shop in 2003, then another in 2005. I decided that I wanted to import Tat from aboard. Talked about it on here, eventually got on a plane, spent a few years importing. Wanted to build a house. Bought a plot, still haven't done anything with it. Had an offer in on a wine shop year before last, didn't get accepted. Put in an offer on a pub about 9 years ago in Bath, got outbid. Was buying a shop up near the Circus in Bath about 6 years back, and the seller changed their mind at the last minute and screwed me over for a couple of grand. TestMangler has done a few. Loan business, Cafes, Boats, Chip shop. AtW took years of ribbing over his Plan B, now look at him. He's managed to attain a rented bedsit, few ever thought it would happen.

As I mentioned before, I like to plan my year ahead. When looking at a plan B, I model it in detail in Excel. I use Daltons & the like to get accounts, I research it & then normally decide I'm better off contracting and don't have enough time anyway.

You need to recognise opportunities, sometimes you take them. Most just spout off.

[Old Hack]

Of course I do. So does TestMangler, we sometime discuss them. We were both talking about a Loan Pay Day company about 18 months ago. I think TM has done something.

I've had a go at a number. I talked about it and opened a shop in 2003, then another in 2005. I decided that I wanted to import Tat from aboard. Talked about it on here, eventually got on a plane, spent a few years importing. Wanted to build a house. Bought a plot, still haven't done anything with it. Had an offer in on a wine shop year before last, didn't get accepted. Put in an offer on a pub about 9 years ago in Bath, got outbid. Was buying a shop up near the Circus in Bath about 6 years back, and the seller changed their mind at the last minute and screwed me over for a couple of grand. TestMangler has done a few. Loan business, Cafes, Boats, Chip shop. AtW took years of ribbing over his Plan B, now look at him. He's managed to attain a rented bedsit, few ever thought it would happen.

As I mentioned before, I like to plan my year ahead. When looking at a plan B, I model it in detail in Excel. I use Daltons & the like to get accounts, I research it & then normally decide I'm better off contracting and don't have enough time anyway.

You need to recognise opportunities, sometimes you take them. Most just spout off.

I think that about sums it up perfectly.

We're actually going to build a plan this weekend, for the year, this year, is the year we intended selling up and buying a small holding. However, the Stoke idea is just so tempting. It would leave a smallish, in the big scale of things, mortgage, and we could use the return many ways. Something to look at.

Cafes seem the only growth areas, and I am currently enjoying the flack all of the big boys are getting over cafe ownership, leaving the small independent cafes doing extremely well. The soft plays are doing well here too, we went to one last week, twice, and couldn't get in either time.

But then, you look at contracting, having spent most of 2012 at home working, doing very little, in all fairness, and think why bother. I have small overheads, I demand a good rate, I get paid weekly, and have all my free time with my family, worrying about nothing: I can milk this cow for at least another 5 years.

The contractors dilema.

[rootsnall]

Why would they no longer wish to live in them?

Because there are £400 a month rental houses available in better areas. That's probably the doomsday scenario but be careful what you are buying. I wouldn't go for the cheapest and hence roughest area in town. I think it can only really happen in areas that are losing population. It happened in the last housing slump in quite a few bits of the North, do you not remember the stories of being able to buy a whole terraced street for buttons. That was because interest rates were too high to make low end BTL viable, so there were no buyers.