Reply to: 3-bed BTL Newcastle, £50k purchase price, rent £800 pcm

[d000hg]

Speaks massive volumes what's wrong with the UK housing market that does.

You'd still make a decent profit - but only with the interest rates as they are. All the people who bought pre 0.5% are fine - long-term landlords - but it seems everyone I know owns or wants to own a student let here in Durham since it's a bit of a trapped market. Not sure if the rates rise, if student rates will just go up since they still need somewhere to live, or if all the johnny-come-latelies will be forced to sell up. If they do, the long-term landlords who own entire streets will snap them up. Or just maybe actual people might move back into the city centre, which is almost exclusively students it seems these days.

[minestrone]

Bought a studio flat in shawlands 8 months ago for 50k currently rent out at 375 a month. Reasonable return. Doubt that £800 is correct. Got a lot of friends from Newcastle, and that doesn't sound right to me.

The 70s ones across from the park?

[speling bee]

Buy one in Berwick, annex the town and then prices will go through the roof with all the oil wealth. Then sell it and buy one in Lerwick for when Shetland does the same trick.

[ChimpMaster]

We looked at buying up north - Luton for example ...but seriously we also considered further up like Newcastle.

Eventually we decided to stick to where we know, in certain pockets around the SE (not London). Yes it's a lot more expensive to buy but yield still works out OK. BUT the main thing is that you get the asset price inflation, which you won't get up North - nowhere near the same anyway.

[ChimpMaster]

Please don't do it. I did alot of these round Burnley 15 years ago. I considered myself lucky to get out with building society interest levels. It could have been alot worse.

The only advantage is because its cheapo you can do smaller lots. But the tenants inevitably end up being a mixed bag.

The only time i might consider it is if used for students.

What do you mean, what happened?

[d000hg]

With even quite modest rental properties selling for way over £250k in many areas now, many people are priced out of doing this. Are there schemes where you can buy into a group who own several properties and you get back the profits like dividends on shares? Why shouldn't you be able to put in £5k to such a scheme like you can shares - even as part of an ISA in a fund or something?

[BlasterBates]

No comparison, you wouldn't get more than 300 for that rather squalid flat, and no doubt paper thin walls and surrounded by drunken bums.

The house is cool.

[alreadypacked]

I was recently in Rhodes and property is very cheap. I was thinking about until I looked at Trip Advisor holiday rentals, some people are offering places for £20 a night.

If I buy something in Rhodes, I think it could be 5 years before rentals recover.

If something is too cheap there is a reason, find the reason and see if you can live with it.

[TheFaQQer]

Please don't do it. I did alot of these round Burnley 15 years ago. I considered myself lucky to get out with building society interest levels. It could have been alot worse.

The worst areas got compulsory purchased - maybe you should have hung in there. The former Labour MP (allegedly) made a killing by buying up a few houses in areas which then were purchased and demolished...

There was some good money to be made - houses that were £3k about 12 years ago are now £30k. I remember hearing some bloke arguing in the Halifax that he was prepared to pay "Tooo n'alf grand, but nah mooeh"

[BrilloPad]

Please don't do it. I did alot of these round Burnley 15 years ago. I considered myself lucky to get out with building society interest levels. It could have been alot worse.

The only advantage is because its cheapo you can do smaller lots. But the tenants inevitably end up being a mixed bag.

The only time i might consider it is if used for students.

[Jeebo72]

Always a con. I've got a 1-bed in pollokshields, £615 a month, I'm just wondering if there's elsewhere in the country I can take the money to make it work better. Glasgow is not delivering the yields I'd like.

I you're interested in a small risk look at NN1.

Loads like this:
1 bedroom apartment for sale in Wellington Street, Town Centre, Northampton, NN1

Will get below asking so close to 50K. Rental £550. Flats were going for over double 6 years ago.

[d000hg]

Don't know NCL well but in the NE outside town centres you can easily get somewhere for £50k. But rental value would typically be more like £400pcm and you are very likely to have benefits claimants as tenants in that price bracket... not exclusively, you might get PhD students perhaps. We own such a property and it's not really fun.

£150k would typically get you a fairly decent place you could rent for £800pcm I reckon; 3-bed run of the mill semi.

[scooterscot]

Bought a studio flat in shawlands 8 months ago for 50k currently rent out at 375 a month. Reasonable return. Doubt that £800 is correct. Got a lot of friends from Newcastle, and that doesn't sound right to me.

Always a con. I've got a 1-bed in pollokshields, £615 a month, I'm just wondering if there's elsewhere in the country I can take the money to make it work better. Glasgow is not delivering the yields I'd like.

[Jeebo72]

Wondering what to do with £50k cash. To my utter astonishment I could buy a 3-bed in Newcastle and let it for £800 PCM.

Am I missing something? The absolute best I could do with that last year on stocks was about £6k, whereas the BTL would have returned almost £10k.

What would you do?

Bought a studio flat in shawlands 8 months ago for 50k currently rent out at 375 a month. Reasonable return. Doubt that £800 is correct. Got a lot of friends from Newcastle, and that doesn't sound right to me.

[scooterscot]

The two items are not comparable.... I doubt that flat rents at more than £495 a month..

Still a decent return but not what you think it is...

Don't invest in areas you don't know perhaps. I could not really tell the difference, albeit apart from the interior quality.