This is something I have a lot of experience with and will very soon use to fund an epic (RVF inspired) location independent lifestyle. It's nothing new but in my eyes one of the best financial strategies available: buy to let investment - buy property, rent out, profit. Property, especially in the UK but also most major cities worldwide, is a solid low risk investment with a consistent, reliable income and capital appreciation through the asset itself - I don't think you can beat that! And more specifically with this strategy of student/multi-room letting you can achieve much higher returns and income. This is all based on my experiences with the UK market but I'm sure could be adapted for you guys in the States or elsewhere.
It's worth saying early on that you do need a decent chunk of money to start this - either through savings, loan from family or other means ... Most of the purchase is funded by a Buy to Let mortgage where the interest only is paid back BUT this type of mortgage usually requires a minimum 25% deposit, so a £120k property = £30k cash needed up front, not including the money to renovate! You also need some existing income to qualify for a mortgage - speak to a decent mortgage broker that specializes in this type of thing, they will give free advice on what options are available. A pro-tip that isn't exactly illegal is to instead take out a residential mortgage, as you only need a 5 or 10% deposit, you play it as though you are going to live there but instead rent it out - it could become complicated if the mortgage lender finds out you are doing this (and possibly invalidate your house insurance!) but I do know many that have used this method to fund their first house - myself maybe/maybe not included![[Image: wink.gif]](https://rooshvforum.network/images/smilies/wink.gif)
Whichever way you do it, once you have this finance in place you're ready to put in serious offers on properties. To start, find a suitable house through a property search website like Rightmove: you want to find somewhere in the typical university/student area of your city, location is key but it also needs to have 3 double bedrooms ideally, with a separate front lounge/living room you can use as a 4th. This type of layout is perfect:
![[Image: Floorplan.jpg]](https://s24.postimg.org/vr5hhhyw5/Floorplan.jpg)
In general I hate estate agents but you have to get along with them - play it right and they will tell you exactly what to offer to get the best price or give you first refusal on new to market properties. To complete the purchase you also need a solicitor/lawyer to deal with the legal side and this usually costs around £600. This is the hardest and most frustrating part for me - finding a property, financing it and dealing with the bullshit 'buying process', but with the right team it makes it easier.
Another essential contact you need is a letting agent. There are plenty around these days and some are much better than others - they will find you tenants, do all the paperwork including legal contracts and credit checks, collect rent payments, general admin etc... With an agent you have little to no contact with your tenants which can be great although also has a risk attached. A scumbag agent could easily screw you over in numerous ways so it's important to find someone you can trust or close enough. You could do their job yourself but that would really change this whole thing from semi-passive to a part time job so for their small percentage a good agent is worth a lot.
A month or 2 after having an offer accepted you will have the keys and want to start work straight away: completely renovate the house - new everything, don't go crazy but don't skimp either as this will be a long term investment, a little extra money and time spent now will give you less headaches and more income over the years. A full renovation can be done for around £20-30k (Central Heating £4K, Electrics £2-3k, Joinery/Kitchen £4-5k, Bathrooms £3k, Windows £1-2k, Plastering £2-3k, Painting/Decorating £2k, Carpets/flooring £2k, , Appliances/furniture £2-3k) and should take 2-3 months max. These figures is pretty rough but I've never spent more than £30k on any property and my most recent will be way under £20k. Also the more you can do yourself the better to a certain extent, as long as it doesn't take forever and you can actually do the work to an acceptable finish.
A key point is to complete the house with a good standard, with quality fittings/furniture/appliances and that doesn't necessarily mean expensive. There's no guarantees but what I've found is the better the house = better tenants = higher rent. There is tons of poor quality rental housing already and you want to be as far away from that as possible. As an example/inspiration/humble brag, here are some pics of the house I finished this week:
![[Image: collage_2017_01_18.jpg]](https://s28.postimg.org/qaxwk6lzh/collage_2017_01_18.jpg)
![[Image: collage_2017_01_18_1.jpg]](https://s28.postimg.org/d3dekzmcd/collage_2017_01_18_1.jpg)
This took me 3 months to complete, was signed up to be rented before it was even finished and I have (hopefully) good tenants booked up until June 2018.
Ok now the good part: INCOME Good quality student houses in most UK cities will easily rent at £95/room with bills included. So 4 rooms @ £95 x 48 weeks (mine always rent 48 not 52 as aren't there in the summer) = £18240 Gross rent Less 10% agent fees = £16416, Less utility bills of £2k max. = £14416 less Mortgage interest (£90k @ 4%) £3600 = £10816 profit So with 2 or 3 of these you are looking at £1800-2700/month before tax - enough to fund a decent life in plenty of EE, SEA or SA countries!
(NOTE I've been pretty conservative with these figures - I've never paid more than £110k for a house, all mortgages are actually less than 3%/year at the moment and my agent fees are only 7%![[Image: banana.gif]](https://rooshvforum.network/images/smilies/new/banana.gif)
)
As per title this is semi-passive income, although you use a lettings agent who deals directly with the tenants, does all the paperwork, checks rent payments, general admin, you will still get phone calls/emails if there are any problems. The agent can sort most things out but obviously you pay for the privilege. The good thing is that if you have done a house up properly, with all new plumbing/electrics, appliances etc. there's not a lot to go wrong. With my 3 houses I get around one 'problem' call a month about something very minor that takes a few minutes to fix (or if I'm away could be sorted at the end of a phone and a £50-100 handy-man call out charge). As I've gone along and learnt more, each house has been done to a better standard and I've had less and less problems each time.
I've built this 'side business' up alongside a full time job over the past 5 years, it wasn't easy and I worked very hard for what I have now. I've worked from 6am to midnight countless times and worked weeks straight with no days off to get projects finished - last week I worked nearly 100 hours to meet the deadline of new tenants moving in. A huge bonus for me is I really like doing this type of thing - project managing mixed with hands-on manual labour: transforming a run-down shithole into a great home that also makes good money. It's not quite a passion for me, but not far off so that definitely helps! My plan now is to explore the world and it's women for 6-9 months of the year then return to the UK to do another project during the summer, rinse/repeat until I get bored.
Once you get started it gets easier and easier as you go along - to find the right properties, get finance, complete the purchase and to carry out the projects. The hardest part is starting.
![[Image: image.jpg]](https://s24.postimg.org/o160ghk79/image.jpg)
It's worth saying early on that you do need a decent chunk of money to start this - either through savings, loan from family or other means ... Most of the purchase is funded by a Buy to Let mortgage where the interest only is paid back BUT this type of mortgage usually requires a minimum 25% deposit, so a £120k property = £30k cash needed up front, not including the money to renovate! You also need some existing income to qualify for a mortgage - speak to a decent mortgage broker that specializes in this type of thing, they will give free advice on what options are available. A pro-tip that isn't exactly illegal is to instead take out a residential mortgage, as you only need a 5 or 10% deposit, you play it as though you are going to live there but instead rent it out - it could become complicated if the mortgage lender finds out you are doing this (and possibly invalidate your house insurance!) but I do know many that have used this method to fund their first house - myself maybe/maybe not included
Whichever way you do it, once you have this finance in place you're ready to put in serious offers on properties. To start, find a suitable house through a property search website like Rightmove: you want to find somewhere in the typical university/student area of your city, location is key but it also needs to have 3 double bedrooms ideally, with a separate front lounge/living room you can use as a 4th. This type of layout is perfect:
In general I hate estate agents but you have to get along with them - play it right and they will tell you exactly what to offer to get the best price or give you first refusal on new to market properties. To complete the purchase you also need a solicitor/lawyer to deal with the legal side and this usually costs around £600. This is the hardest and most frustrating part for me - finding a property, financing it and dealing with the bullshit 'buying process', but with the right team it makes it easier.
Another essential contact you need is a letting agent. There are plenty around these days and some are much better than others - they will find you tenants, do all the paperwork including legal contracts and credit checks, collect rent payments, general admin etc... With an agent you have little to no contact with your tenants which can be great although also has a risk attached. A scumbag agent could easily screw you over in numerous ways so it's important to find someone you can trust or close enough. You could do their job yourself but that would really change this whole thing from semi-passive to a part time job so for their small percentage a good agent is worth a lot.
A month or 2 after having an offer accepted you will have the keys and want to start work straight away: completely renovate the house - new everything, don't go crazy but don't skimp either as this will be a long term investment, a little extra money and time spent now will give you less headaches and more income over the years. A full renovation can be done for around £20-30k (Central Heating £4K, Electrics £2-3k, Joinery/Kitchen £4-5k, Bathrooms £3k, Windows £1-2k, Plastering £2-3k, Painting/Decorating £2k, Carpets/flooring £2k, , Appliances/furniture £2-3k) and should take 2-3 months max. These figures is pretty rough but I've never spent more than £30k on any property and my most recent will be way under £20k. Also the more you can do yourself the better to a certain extent, as long as it doesn't take forever and you can actually do the work to an acceptable finish.
A key point is to complete the house with a good standard, with quality fittings/furniture/appliances and that doesn't necessarily mean expensive. There's no guarantees but what I've found is the better the house = better tenants = higher rent. There is tons of poor quality rental housing already and you want to be as far away from that as possible. As an example/inspiration/humble brag, here are some pics of the house I finished this week:
This took me 3 months to complete, was signed up to be rented before it was even finished and I have (hopefully) good tenants booked up until June 2018.
Ok now the good part: INCOME Good quality student houses in most UK cities will easily rent at £95/room with bills included. So 4 rooms @ £95 x 48 weeks (mine always rent 48 not 52 as aren't there in the summer) = £18240 Gross rent Less 10% agent fees = £16416, Less utility bills of £2k max. = £14416 less Mortgage interest (£90k @ 4%) £3600 = £10816 profit So with 2 or 3 of these you are looking at £1800-2700/month before tax - enough to fund a decent life in plenty of EE, SEA or SA countries!
(NOTE I've been pretty conservative with these figures - I've never paid more than £110k for a house, all mortgages are actually less than 3%/year at the moment and my agent fees are only 7%
)As per title this is semi-passive income, although you use a lettings agent who deals directly with the tenants, does all the paperwork, checks rent payments, general admin, you will still get phone calls/emails if there are any problems. The agent can sort most things out but obviously you pay for the privilege. The good thing is that if you have done a house up properly, with all new plumbing/electrics, appliances etc. there's not a lot to go wrong. With my 3 houses I get around one 'problem' call a month about something very minor that takes a few minutes to fix (or if I'm away could be sorted at the end of a phone and a £50-100 handy-man call out charge). As I've gone along and learnt more, each house has been done to a better standard and I've had less and less problems each time.
I've built this 'side business' up alongside a full time job over the past 5 years, it wasn't easy and I worked very hard for what I have now. I've worked from 6am to midnight countless times and worked weeks straight with no days off to get projects finished - last week I worked nearly 100 hours to meet the deadline of new tenants moving in. A huge bonus for me is I really like doing this type of thing - project managing mixed with hands-on manual labour: transforming a run-down shithole into a great home that also makes good money. It's not quite a passion for me, but not far off so that definitely helps! My plan now is to explore the world and it's women for 6-9 months of the year then return to the UK to do another project during the summer, rinse/repeat until I get bored.
Once you get started it gets easier and easier as you go along - to find the right properties, get finance, complete the purchase and to carry out the projects. The hardest part is starting.