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Should You Buy Cheap Rental Properties? - YouTube
Channel: Monoperty
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a question I'm often asked is do you
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recommend buying cheap houses as rental
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properties in their 30 to 70,000 price
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range and my answer is yes and in this
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video I'll give you several reasons
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while buying cheap houses where there's
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a demand can be a great investment
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especially when you're first starting
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out as a landlord
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hi I'm Andy Walker from Malathi calm and
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on this channel I'll share my
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experiences as a property investor in
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landlord and also interview other
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investors so we can learn from their
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advice too so if you new here
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consider subscribing for more videos
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like this now there's a common
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misconception that the more expensive or
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more attractive or property the more
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that can be charged for rent and the
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bigger return you'll receive and that's
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simply not true
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cheap rental properties can make very
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good investments now I've not bought a
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house in the thirty to seventy thousand
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price range yet but I plan to and in
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fact the cheapest property I have bought
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has been my best performing property
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it's been a good solid investment it has
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never been vacant for more than three
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weeks in a year and that's only happen
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once in the 14 years that I've owned it
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and I've also seen some nice capital
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growth in that time too I remember when
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I first viewed it I wasn't that keen but
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after listening to the letting agent
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about the demand in the area I decided
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to go for it and I'm so glad I did by
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owning a cheap single unit property
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you're still gain experience as a
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landlord and investor also depending on
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your approach you may decide to look for
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one that requires some cosmetic work to
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bring it up to scratch so you can add
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value before your first tenant moves in
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they say you'll gain some experience
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with renovations as well some people say
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they're not going to make a significant
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income with the cheap rental property
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and although that may be true when you
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compare it to a large HMO you have to
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consider that smaller single-family
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properties will require less capital to
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get started less time to get up and
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running and less time to be managed
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once the tenant is in situ typically
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they're less of a headache I would also
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add that your rental yield is likely to
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be better compared to buying a property
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in a city center or more expensive
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region I'll have a video on calculating
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the rental yield and the return on
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investment up here which you should
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watch if you're not familiar with these
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terms property investing is a long-term
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business and businesses are all about
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cash flow if your goal is to replace
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your salary from your current job in the
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future then buying several cheap
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properties will help you reach that goal
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providing you stay focused on the rental
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yield and cashflow are not the potential
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for capital growth each property you buy
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will be a stepping stone to the next one
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and your experiences are being both a
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landlord an investor will skyrocket it
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makes sense right the more you purchase
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and hold the more experiences you will
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gain recent research conducted by you
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pad has shown that two-bedroom
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properties for both houses and
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apartments bring in the best rental
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yield and I know from experience that
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these types of properties are rented by
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key workers such as teachers nurses taxi
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drivers both white and blue collar
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workers who don't necessarily want to
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buy their own property but want a nice
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place that they can call their home okay
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so if you're a first-time investor
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cheaper properties can really work for
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you for a number of reasons firstly
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lending will be far easier if you're
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looking to pour 40 thousand as opposed
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to two hundred thousand because when you
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start there'll be fewer lenders
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available to you once you have some
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experience with owning a rental property
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and operating as a landlord you will
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find that there will be more lenders
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that will be willing to do business with
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you there's a better chance that you'll
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be able to reduce your loan to value to
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increase your cash flow if you have
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thirty thousand to invest for example
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and you use that as a deposit on a
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120,000 property you will need a
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mortgage with the loan to value of
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seventy five percent and you'll find the
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interest you pay on your mortgage will
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be higher than if you used your thirty
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thousand to purchase a sixty thousand
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property and took out a mortgage with a
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fifty percent loan to value less capital
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will be required but you'll still gain
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the experience of purchasing an
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investment working with a mortgage
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broker and a solicitor and operating as
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a landlord as if you'd bought a more
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expensive property in a city center or a
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different region if you have a sizable
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amount to invest but you're not 100%
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sure if property is the asset class for
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you then the cheaper property will allow
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you to dip your toe in the water before
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you decide to go all-in running costs
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will be cheaper and I'm talking about
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buildings insurance as well as mortgage
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repayments and utility bills if you find
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yourself letting the property with bills
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included cheaper properties won't cost
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as much to fix compared to more
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expensive ones you'll gain experience of
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solving and fixing problems and any
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mistakes you make won't be as costly
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compared to the bigger more expensive
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properties there's also a good chance
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that the cheaper rental will
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be near where you live which will force
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you to look for a good managing agent
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and then allow me to put it at a back in
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mind once it's up and running so you can
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focus on your normal routine and enjoy
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the passive income that it brings
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experience with working with a letting
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agent is good to have in my opinion I
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think they're cheap rental properties
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are a great way to start as a landlord
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and shouldn't be overlooked start as
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soon as possible buy cheap gained some
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experience and start to build your
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empire and your legacy whilst providing
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a good service to your customers over to
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you have you bought cheap property are
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you thinking of buying a cheap property
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as your first investment let me know in
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the comment section below and I'll also
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be happy to answer any questions you
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might have please like and share if you
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found this video useful and definitely
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subscribe if you haven't already so you
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won't miss my future videos which it all
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begins always helping you start or
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improve your property business thank you
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so much for watching and I'll see you in
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the next video
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[Music]
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you
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