ASK190: Help! My property isn’t making a profit! PLUS: Is there a minimum value that makes sense for a buy-to-let?

The Property Podcast

Rob Bence & Rob Dix

Business News, News, Business, Education, Investing

4.8 • 2K Ratings

🗓️ 11 June 2019

⏱️ 9 minutes

🔗️ Recording | iTunes | RSS

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Summary

The Robs are back again for another fantastic episode of Ask Rob & Rob. After a few weeks of mortgage questions with Dave Cookson, the trio is now back to a duo! First up we’ve got Horatio who’s in a bit of a pickle. He made an offer to purchase a buy-to-let investment property in Birmingham about six months ago and has recently completed. However, he’s run his numbers again and has realised that his investment property isn’t even making £50 a week! A situation no investor wants to be in. So how does Horatio get out of this sticky situation? Is there a way out? Could a change in strategy make him a small profit at least? Second up, we’ve got Nick. He wants to know if there’s a minimum purchase price to look for when purchasing a buy to let property? He’s wanting to know which works better for a portfolio; having six properties valued at £100,000 each or 12 at £50,000 each. Ultimately there are a number of variables to consider and, as always, it also depends on your goals. So how low should you go when you want to buy cheap buy-to-let investment properties? And does cheap always mean it’s an instant money saver? We’ve all heard the phrase “buy cheap, buy twice”... Find out on today’s Ask Rob & Rob. Do you have a buy to let or property investment related question for Rob & Rob? You could feature on the next episode by giving us a call on 013 808 00035 and leaving a message with your name and question (normal UK call rates apply). Or if you prefer, click here to leave a recording via your computer instead. The next question on Ask Rob & Rob could be yours. Have you joined us over on the Property Hub Forum yet? Our online community is friendly, informative, and the members are waiting to welcome you with open arms. So get yourself over and introduce yourself. See omnystudio.com/listener for privacy information.

Transcript

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0:00.0	Hi, I'm Rob. And I'm Rob. And this is Ask Rob and Rob.
0:06.0	Hello everyone and welcome back to Ask Rob and Rob, the show where you get your questions in and we answer them.
0:14.0	Yes it is that simple but luckily you ask great questions and sometimes we even give great answers.
0:19.0	This week is no exception. We've got two of those great questions on the way but before we do let's
0:24.0	remind you of how you can get on the show yes it's not difficult all you have to do is
0:27.7	give us a call on oh one three eight oh eight triple oh three five that's
0:32.0	oh one three eight oh eight 808,00035, or you can go to Property Hub.net slash Ask.
0:38.0	Dead easy, leave us a voicemail and you'll get your question answered.
0:41.3	Do however, remember to give us your name or we'll make up a silly one for you so this first
0:45.7	question today comes in from Horatio. Hey Robin Rob I have a question for
0:50.9	you I've got myself into a bit of a procurement. Well I made an offer to purchase a property six months ago and I've just received completion. It was actually a property in Birmingham. I've plugged my numbers in and I've very nice that the
1:04.5	five to that eventually is actually not profitable. So I know it's pretty bad on my side.
1:10.8	But once plugging in the numbers I'm very nice for that I'm actually not even
1:15.4	making 50 pounds on a weekly basis and considering all the expenses I pay for the
1:20.9	legal costs putting the property within a company has cost me additional
1:25.5	stamp duty, additional legal costs, etc.
1:28.4	What's happened is that the property itself right now as a by-to- let purchase is not profitable. I'm probably
1:35.0	breaking even or even losing money. How do I get out of this situation? Should I wait it out and
1:40.8	what strategy I should follow to at least get some sort of profit from this.
1:45.3	I don't think I can pay back additional amounts of a mortgage because there are fees for
1:50.2	early repayments. The mortgage is costing a lot because it's under a company, so there's high interest rates compared to
1:56.5	if I had the mortgage undermining. So I'm in a situation where I'm in a two-year fixed period
	...

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