Expat couple looking for advice investing in London

by Readers Question

10:14 AM, 15th October 2013
About 8 years ago

Expat couple looking for advice investing in London

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Expat couple looking for advice investing in London

First off, great site! As a wannabe investor/landlord for several years, I’ve been a keen follower of this and similar landlord online resources, which have been a great source of inspiration and learning about the landlord business. Many thanks!

My wife and I are now planning to take our first steps into residential property investment in the UK and would be really grateful for any advice and tips to help us in this journey. I have detailed our rough plan and somewhat non-standard situation below and would welcome any advice, thoughts and expert insight from the community.

My wife and I are both British expat who have been living/working overseas (currently Singapore) for close to 4 years now. We are both in our early thirties and are in employment; I do contract consultancy work and my wife has a permanent role with a large multinational.

We are now set on settling back in the UK in the next 1 to 2 years. Living abroad has been a great experience but we would now like to settle down and be closer to family. We plan to continue our careers and, at the same time, build/manage an investment property portfolio.

We are both Londoners and want to invest in London as we feel we know the area and view this as a long-term investment to benefit from capital gains. We are of course aiming for positive cash flow on rental income but do not anticipate huge month-to-month profit given the areas we are considering buying in.

We currently have a sum of £500k to invest and plan to take on BTL mortgages to initially purchase a few 1 to 2 bed flats. From our initial research and calculations, we anticipate that this should allow us to purchase 4 – 5 properties, assuming 75% LTV mortgages, purchase costs etc. We plan to rent these out and have these managed by a letting agent.

We do not currently own property in the UK as we sold our residential home in London before we left. While we do plan to stay abroad in the short/medium-term, we are keen to start investing asap and to start preparing the ground for our permanent move later, including me establishing contacts and looking for work etc.

As such, I am planning on taking an extended trip to London for 2-3 months to start the above process (with the possibility shuttling between London and abroad thereafter). The aim is to better understand the market/our options, start making connections, and scouting/purchasing property if possible. During this period, the wife will remain in her job in Singapore and I will not be formally employed.

A big step for us but one we feel is necessary to make our jump home smoother and to start our property investment plans. It would be great to get your thoughts/advice on this i.e. Does the plan seem sound? How would you go about investing in this situation? What should we look out for?

In particular, we would like to:
– better understand the likelihood of us being able to secure BTL mortgages. I understand that being expats and not currently owning residential property in the UK can make this more complicated.
– get your recommendations on good mortgage brokers/advisors in London (as well as other trusted professional e.g. solicitors, letting/mgt agents) who I could possibly get in contact with.
– get an understanding of the landlord/investment networks, clubs or communities that are around and that I could possibly plug into.

I have purposely put down a lot of detail but do let me know if you have any further questions.

Thanks a bunch!

PaulSingapore Expat

Comments

Vanessa Warwick

11:17 AM, 17th October 2013
About 8 years ago

Glad you found the links helpful Paul! 🙂

My personal strategy was to buy good quality new build 1 and 2 bed flats with discounts. That was 6 to 10 years ago though!

If I was in buying mode now, I would look for apartments in good areas where I could add value through a basic refurb or remodel. For instance, if the flat has a large open plan living area and separate kitchen, I would consider moving the kitchen into the living area, and turning the kitchen into a bedroom.

By "upmarket", I mean quality finishes and private blocks with parking and security ... not ex-LHA flats.

London is a series of micro markets and it can be very easy to get it wrong. Like I said, intense due diligence is required ... .

Mark Alexander

11:25 AM, 17th October 2013
About 8 years ago

I'm also out of buying mode as I've already filled my boots after 25 years in this business.

However, I would recommend my brothers model which is to buy very run down suburban bungalows on a very large plot. Refurb the bungalow, split the deeds, obtain planning to build another property on the plot, then sell the plot. The last one of these he did resulted in a 50% profit in 8 months after taking into account all costs and paying £11k over the asking price to the estate of the deceased vendor when the sales went to sealed bids. In this particular case he also sold the bungalow as the rental yields would not have been good but in other cases he retains them as investments.
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