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I've just sold and rented for 6 months until my work is more sorted. Feels weird. I'm also renting out my first house to my ex's mum, which is also weird 😅

I'm going to do exactly what I've just done. Buy a rundown £180k house, renovate over 24 months with a £30k spend, sell at £275k. Now I've done it once, seems a no brainer. Plus add a few more rentals.

Jamie, surely the framing of this question is wrong? As a property investor would'nt you use the same strategy for a BTL, BRR for the purchase of your own home and instead of it cash flowing you would be reducing your amount of debt, plus you get the capital growth as a bonus Vs do you rent and use your capital to grow a BTL portfolio? That is probably a much more complex comparison too? Or would your company own the house and you pay the rent to it and then reinvest that or get back in dividends.......

Great video! I would however suggest that 5% capital appreciation is highly unlikely going forwards! Perhaps 2% might be more realistic over the longer term!

Nice one Jamie! If you don't have a family could you buy a house on an interest only mortgage and take on lodgers to get additional income to raise a deposit for a separate BTL? So on your residency you get cashflow and capital growth?

Amazing video Jamie ... clarifies a lot of discrepancies between your and Cardone's strategy. Appreciate you bringing up this video !

One calculation that no one take into account is what the total cost of the property with the interest payment after 25year, say a property is worth 190k, I put a deposit down of 40k, and with fee it come to 50k, mortgage amount is 150k. After 25 year the repayment it has cost me £201,903, based on 2.5% rate. Included the 50k I had to spend, the total cost of the property is 250k,unless the property is worth more then 250k I would not have made anything , plus if I move out after 10/15 year then what would me cost be,

Hey Jamie you missed out the idea of what if you rented and simultaneously invested the £35k in an investment property or even just index funds? Also as for capital appreciation for something you live in, it feels kinda irrelevant as if my home is appreciating then so is everything else I would want to buy! Don't get me wrong I agree with you, buying is better however I do think it's over estimated how much better it actually is! Probably the biggest argument in my mind for buying though is you get the capital appreciation benefit with only 10% cash in for deposit (and of course 5% with a scheme) whereas buy to lets you need 25%...

It's such a complex one too due to the tax rules regarding transferring from personal to LTD company... I bought my place for £182k 3 years back and is now worth a solid £200k, £18k up. Intention is to never sell and rent it out once I move out however our friends at HMRC mean it would be a net loss each month without transferring it across to my LTD company and pay the stamp and legals all over again... I have two other flats so 3% stamp plus another £2k for legals and i'm £8k down on the capital appreciation I've "earnt" and that's ignoring the cost of capital from back when I bought it! If I rented my place and took that £20k from when I bought it and stuck it in an index fund at 10% a year then i'd have £6k back there so only £3k difference over the 3 years which can easily be made sense of for the flexibility and lack of responsibility for the boiler etc...

When it really comes down to it I think the factor that tips the balance is the mental security of owning like you say rather than a financial decision!

Another factor is actually as you go up the price range then you can add bedrooms cheaper and cheaper, £700pm rent for one bed, £800pm rent for two bed... If I rent out the one I own (1 bed) and maybe it profits £300pm then rent something for £800 it's effectively £500pm, then nothing stopping me from renting out the second room using my rent a room allowance for £400pm, and boom my monthly living expense is down 90% and "costs" £100pm due to the fact I rented... This is ignoring all the maintenance benefits you don't have to think about when you're a renter....

It's such a complicated topic I can make my head spin trying to work it out! Another factor are these all in one payment blocks we're seeing pop up much like what they have in America, simply one rental bill which includes absolutely everything (taxes, internet, utilities etc), has an onsite gym and pools often get's very efficient not to mention the benefit of having literally only one bill to think about... (I'm sure I'm over paying for my internet and utilities but never get round to sorting it, none of us do!).
.

Anyway just my brainstorming, thanks for all the great content, we battle on!

Josh

Hey Jamie - How is the Property Market in Britain at the moment. I am in Australia, Queensland (Sunshine Coast) and it has just gone Crazy. Most Reasonable people thought that with the Closed Borders to Australia and the Reduced intake of people, that Supply and Demand would go down. It is the complete opposite and that is basically all along the East Coast of Australia. Reasonable people would have thought that with people NOT working and getting a Wage, that Mortgagees would not be able to pay the banks and would have to Sell their property rather than default on the Loan and therefore = More supply of Properties on the Market, so Less Demand. Complete Opposite, Less properties to Buy or Rent and the Prices have exploded by 20% to 25% or more in some cases in both Rentals and Sales Prices, in less than 18 months. Why?? Would you Agree that Too Many people out their are in FOMO = Fear Of Missing Out? I saw similar back in 2007, 8, 9 with people panicking with FOMO just before the GFC, but in Australia it did not Bust the Property Market, because of Govt. intervention. Are you seeing the same in the UK or is Australia a bell weather - What are you thoughts, if you have any on the Austalian RE Market, both purchasing and rentals?

enjoyed watching that, good stuff

Totally agree Mr York! Yes tax free capital growth and the comfort of knowing u own your 4 walls 💚 I have been in the property market in terms of owning my own home for 25 years and will be drawing down some accumulated equity for a couple more BTLs while I can. I'm with u Jamie... I've always loved the pride and security of owning my own home... I think it's quite a British thing!

House prices fell for most of the 19th century. Capital appreciation is good but it’s not guaranteed.

Could you please do the maths for buying a Flat in Manchester and if it makes financial sense to buy or rent.

Service charges and Ground rent come to close to around 1.7k-2.7k per annum as well here.

Love your channel and your accent!! You are helping me a lot to improve my English and understand the real estate in the UK. Thank you so much!

Rent where you live, rent out what you own 👌

Hi Jamie great vid!

One more reason to BUY is that your monthly mortgage payments will stay more or less same over time. Meaning that for example in 10 years time you’d still pay £750 pm. While your rent would have increased to at least £1150 pm by then.

Of course all of this assuming you are remortgaging on fixed rate and supply/demand stays on what has been historically. On average.

Hence, why we see people in their 50s having mortgage monthly payments of £200-300 right now. And not to mention that mortgage was with the old fashioned high interest rate. While their property now worth at least x5 what they bought it.

I’m buying!

Really helpful video - thank you!!

imho owning a house or more and passing it to your child is an incredible legacy you can leave. Now, if you rent a property all your life and want to pass on the rent feels like you did not achieve anything throughout your entire life. Think I`ll stick to owning the property and make the next generation happier than I am now.

Key point is : don’t listen to billionaires when you’re in different position. So true! Thanks Jamie 👍

That is not a fair comparison really, if a house worth £260,000 to buy, for similar house rent would be more than £700

Is the 5 year minimum guideline a good estimation to use? I would think that buying a house with the plan of staying in it for 5-10 years would leave you vulnerable to market fluctuations? Especially right now when house prices are so high compared to wages. Any thoughts?

Thanks Jamie much appreciated, would you get the longest mortgage possible on your example house? seen a new 30 year fixed mortgage recently.

Very nice and informative video. Have you got one about help to buy London?

If you plan to live in the same property for over 5 yrs owning makes more sense in the UK. Capital gain will almost always cover your cost.

On a separate note, a property at £700 rent vs £750 mortgage.... We're certainly not talking about a like for like property.

I feel the exactly the same way 👍👍

Thanks - good video. 👍

Hi Jamie. I have been watching your vids for quite a while now so first of all, thank you for taking the time and effort to do these video's I have learnt a hell of a lot from you. I have a couple of questions if i can. You don't sound like you have a Leeds accent (I am south of London myself) so I assume you moved there at some point. Was that move before you got into property or did you move there to take advantage of the property prices and run your business from there? I live 4 miles from Croydon and I'm not sure what the average house price is but where I am a 3 bed semi is about £650.000 and up. I have been looking at property with a view to buy to let for a long time and to do this in my part of the country seems very much out of my reach with the prices as they are here. I have no cash as such but I have about £500.000 in equity in my house. First off, I assume this could be used in some way to finance my first buy to let (perhaps remind me which vid to watch that explains how) and secondly, your thoughts on being able to do this by buying property in the North of England whilst still living where I do. Is that realistic? Happy to email you if it would be a better platform to reply back on.

Rent where you want to stay, Buy where other people want to stay.

i.e. if you want to live in near a major City, rent a property. Then go and buy a property in the suburbs, where others would like to stay..

Very well presented and logically explained . Aimed at young professionals perhaps ? I am a British citizen ,living in Hong Kong , approaching retirement and planning to purchase a house in the UK within the next 12 months . How much of your philosophy applies to me ? Thanks and good health.

I understand if u buy your deposit money is in the bricks and not working for you and becomes a liability but I own my home as would hate for a landlord to rock up to say he’s selling and Iv gotta move my family. Also the money in ur home is just a bank account so can use for deposit pots later down the line

Thou i agree with buying my house surely the opportunity cost of using the £35k to leverage up to invest is the real cost analysis here. USA have depreciation against tax liability benefit uk doesn't

Thank you great information

Totally agree with you. You don't feel free in a rental property.

£5100 is over-egged

Hi Jamie, thank you so much for your content, learning a whole lot from here. Question: If for example you have managed to get into property investment without owning your own home, would you then go ahead to get a repayment mortgage for your home or would you live in one of your interest only buy to let properties (for the first 10 years at least)?

was about to buy pandemic hits house prices rise 10%, priced out of the market :(

Bit of an old video now but I'm well and truly down the rabbit hole and love your videos. A couple of points;
-Stamp duty is 1% as it's a primary residence so is £1250 is it not or will this change if you own btl and then buy a house for yourself?
-Secondly the person paying £700 rent will presumably be paying £1400 in 10 years time whereas the home owner will still be paying £750 unless they've pulled out the equity.

Hi Jamie,
I have just watched your buy or rent. It’s left me in a quandary. I can go ahead and buy a place to live but it would mean using all o f our money and spending the rest of our days paying an interest only mortgage as this is all I can afford for the size/location of house we need/want.

This is why I thought it would be better to spend all of our capital (180k) on buy to let’s which would pay towards our rent we are paying and also give us a steady capital growth.

Love to hear your thoughts on our
Situation.

Excellent content, well said, you are good at what you do, it’s not often I say this as an investor myself – only thing I would add is it also depends if you are planning to be a portfolio landlord yourself and use equity in the future towards your rental portfolio.

Great content as ever, makes alot of sense 👏

Great video, I think for many people who aren't interested in property portfolios and investing the deposit money in stocks etc, for me is that in 10 years time you will be making the same payments on a mortgage where your rent would have doubled.