Category: 
30/01/2008
Why do I like property investment so much? In my eyes Property Investment seems like an easy lazy mans way to make some money and provide passive income. Why do I think this?
I can only speak with my own experience and this is my experience of property investment:
In February of 2002 I bought my first house, this was against advice from my work colleagues and friends who were telling me houseprices which averaged £92,256 (Halifax data) were too expensive and will drop any time soon. Against all the advice I recieved I decided to take the plunge as I needed somewhere to live and I didn’t want to rent forever.
My first house was a 2 year old 3 bed semi-detached property on a fairly new estate. The house had been repossessed by the bank and the estate agent had it on the market for a few months with little interest. The house was on the market for £80k so I put an offer in for £78k It was a price that I could comfortably afford. To my disappointment the agents already had a higher offer and were going to proceed with that one. I was quite dissappointed and carried on my search for a house.
About 3 weeks later the same agents called me back to ask me if I was still interested in the property as their buyer had pulled out. Of course I was still interested, she then proceeeded to ask me if I would like to pay any more for the house? Well of course not! I asked her if I needed to pay any more to secure the house and she said NO. I think she was a little inexperienced as an agent, but a very nice lady. And bingo that was my first purchase.
Boom, Boom, Boom!!
I lived in that house for a couple of years, doing some small home improvements to the garden, bedrooms etc. By mid 2003 the UK had experienced a boom in house prices, the average UK house price then was £132,589 (Halifax data). The house that I bought was now worth about £110k estimated by comparing average sales of similar properties in the area. I was more than delighted with this as I could sell the house and make a cool £30k in profit. The profit was on paper but I’d never made so much money without doing too much before. I was hooked I wanted more, more, more!
I wanted to repeat this sucess and went about looking for books that could teach me, I was hungry for more information and quickly put together a small library of property investment books. Check my recommended book list. After reading these books I put together a plan to buy more houses. I bought my second and third property in 2004. In 2004 I bought four properties. In 2005, 2006 and 2007 I kept buying and buying going on and on.
Today average UK house prices are at £197,039 (Halifax data for December 2007) my first house is now worth about £145k again estimated by comparing to other sales in the area. That is very healthy growth in value and I think we are safe in thinking that this growth is in line with the belief that UK house prices double every seven years. I now have over 40 proprties in my portfolio which is worth nearly £4million on paper. Business is good, except for some problem tenants, but tenant problems are just part of the job of being a landlord.
Oh BTW I’m not too worried about the property prices dipping this year as I’m in it for the long term.
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There are 21 comments
Passive income is the way to go! This is great info, proves that you don’t have to work your butt off 24/7, all you need to do is think and analyze
Kudos to you my friend.
No hunny, we’re both in it for the long term. Remember your money is mine and vice versa lol
miesszkania, thanks for your comments. passive income is great but work is needed to setup the income stream to start with.
hunny, yes whats mine is yours too, but dont forget you’ll have to share the hardwork with me too! xx
Jesus, that is huge portfolio. Are you going to slow down in your purchases with respect to the present economic situation or you will keep pace? I really do feel property values will go down by 10% in the next year or so.
Hat off to you. Alot of people say they are going to do something about quiting their day job, start their own business, build passive income yet there are only a few who actually do something. There are too much procrastination going on, but you have actually gone out of your confort zone to take action and now reaping the rewards.
I am not in property market yet, but I am making a killing online.
pua, i think it will pay to take a little back seat in the current climate.
don’t get me wrong though, if the bargains start pouring in i’ll be there with my wads of cash to buy them up!
glad to hear that you are making good doh online. hopefully i can start making some online income.
Wait a minute, correct me if I’m wrong, doesnt’ the addage say to buy when everyones selling and sell when everyone’s buying? Just my two cents. Thanks for a stimulating post, Dave!
ames bros,
yep i know thats what they say and at the moment it seems like everyone is selling if you talk to estate agents. if you talk to investors well, everyone is buying!
more food for thought!
Dave,
Do you manage all your properties yourself? Also, I wanted to ask you what is the best buy-to-let mortgage rate at the moment. I have just been quoted 5.9% and I’m not sure whether I should go with this deal.
Noms
Noms,
i currently manage most of my properties myself as agents are pricy and i’m a hands on kinda guy.
which mortgage product was that rate with as it seems very high. I tend to go for tracker rates at the monet as the outlook for rates is DOWN for the next few years.
BMS do a 5.09% 3yr rate which is great.
jus wana say respect to you mate, only just got started in the porperty game…….hopefully i’ll have more than 40 properties on my portfolio these days, how much did you put down for deposit on average? and where are your properties mostly??
Jon, on average i put down 15% for my deposits, the trick is too either not put a deposit down or get it back as quickly as possible. You should only do this if you are buying below the market value.
my one tip is to ignore new build property especially flats. ready made and established houses will provide you with much better deals and cashflow.
most of my portfolio is based in the midlands.
hi dave, so how do you not put down a deposit? i dont get it? you have to put down a deposit for every BLT dont u? if you dont mind me asking, how much is your portfolio bringing you in a month cash wise? over 7k?i kinda figured your portfolio was in midlands as london is so expensive, but hey hats of to you mate, your in a position i wish i was in!!good work
Hi Dave,
Thanks for getting back to me. The mortgage deal was with C&G but they also wanted to me to pay £1000 to fix the rate and they will pay my legal fee and valuation fee.
I saw some deals for 5% but they wanted me to pay £5000 booking fee which is ridiculous. Do you go through a mortgage broker or do you do your own research?
Do I need to pay for mortgage fees even though I am remortgaing?
Regards
Noms
Sorry, I meant do I need to pay for legal fees even though I am remortgaging?
I like Boom, Boom, Boom!! section but tell me what is “size” of house which price is £197,039?
hi Naomi and sorry for the late reply!
if you are remortgaging you do normally need to pay the legal fees as a solicitor has to do some work with the title deeds and releasing money.
some products include this for free, but of the BTL products i know of that have free legals it actually works out worse as they give you a higher rate.
if you are not remortgaging to borrow more money (be good) then you maybe able to stay with your current lender and move to a better fixed rate. i’ve just done this and the process was simple. no legals or survey fees to pay.
Thanks for the great article. I’ve been thinking about buying a few foreclosure properties now that there are some great deals out there.
There’s this cool game called Flip that House Real Estate Cashflow Game.
It teaches you how to purchase property, how to fix them up, and flip them for a fast profit.
For those that haven’t done fliping before, this is a great way to learn about foreclosure investing!
Dave thanks for sharing what you have done in the past. but in my opinion today uk property market is at saturation. are you agree with me?
40 properties, That is amazing! Are you renting these properties out?
Hey Dave, just reading back on ur blogs and was quite shocked to see.. “Today average UK house prices are at £197,039 (Halifax data for December 2007)”
What a difference 12 months makes eh!!?
yeah 12months can really make a big difference. i guess we are at the end of the boom for the current cycle.
my mate Dan mentioned that its like someone has hit a big reset button on everything; property, shares, gold etc.