General (main property discussion here) - portfolio size?

replying to sarah's thread made me think. what sort of size should an investor get to in order to really benefit from economies of scale and diversity?

my guess is around 10?

tom

Tom,

Personally I think it comes down to the types of properties you are buying. I have always bought in central London where admitedly the yields are lower but the again so are the voids and arrears therefore less diversification is required.

Therefore if you are investing here probably 5-6 properties is sufficent.

FS

It looks like you are both playing at different ends of the property ladder.

I believe the more properties you have them better from a diversification point of view. However, the need for diversification (by number of properties) does reduce as the risk profile of the property reduces.

Julian

good point. i think the quality of the tenants and the value of the properties is very important in calculating this.

tom

The bigger the better! Size is everything.

The Daddy

do we have some insecurities around size daddy? is the size of your portfolio making up for something else?

tom

I'm only going to make a portfolio big enough so I can get out of this work type rubbish!

500K per year is not on my mind like Leggy!

A mediocre 30K to 50K would be good enough for what I want!

What about everybody else? Has anybody got a target to achieve or are you just going to carry on so you can brag on a forum every night like Leggy?

For me, I'll be sunning it up on the beaches of Phuket as soon as I can. Letting my portfolio pay for my Chang beer and Pad Ped Nuang (Beef curry).

Anybody else got aspirations to retire in the sun, or is there someone out there who already has and is just using the forum from their pad in the Caribbean to keep up with the property business? Keep there eye in so to speak!

Simon

nice idea simon.

ill probably stay in the uk though hopefully ill be able to have a quiet life and not have to work for other though.

tom

I hope to have a portfolio that I can grow as a business. 20-30 properties is what I see is my ideal number.

FS

Thats a good target to set Francesco.

I'm looking to have around 10 by the end of the year, that is my first target, I'll see when I get there, what target I can set myself then. It all depends on voids and rental achieved to that point really.

Simon

Nice thread, my original target was 10, then i hit the student market and realised id make far more money in this market though the house prices are higher, ive now got 5 in this area. I also split a house into two flats and also brought a house which was already converted.

Ive set a target this year of reaching 25 this should push my rental income up to about 45K net, i think i can then chill for a bit. My problem is i manage them all myself as well as run my own mortgage business and also run an advertising business which is not doing much at the mo.

Alex

Blimey Alex. 25 props and a net rental of £45K, that sounds good.

If I got that far, I think I'd be in Thailand now....but then again I suspect you get the bug and keep on buying.

nice going alex - is that £45k after interest charges. if so you should be treating yourself with something nice soon?

simon - you'll get there. key is to not try and grow to quick though. steady as she goes.

tom

I never have a target in mind.

Whether an opportunity is worthwhile is independent of your personal circumstances, size of portfolio, etc. Either you're in a position to move on it or not, and given you're in that position, I'll search out my 20th house with as much care as my first.

John

"i manage them all myself as well as run my own mortgage business"

And may I add very well. I would highly recommend Alex to anyone on this site. All round good advice, polite prompt and courteous as well as advice on other matters.

p.s I am a newbie and hope to have at least one property by the end of the year, but may have two, hopefully adding one every 6 months.

Yeah cheers Tom, its all too easy to go too fast and land yourself in trouble.

But the high yields that can be found in Scotland arent going to last for much longer, so I'm trying to buy as many good ones as possible.

The properties up there are going on the market and within 2 days being snapped up by investors. So vendors are starting to put there prices up as investors are paying the asking price and sometimes more straight off.

This is good for the owners and if rental yields are good too, it has to be a good investment.

Anybody else thought of buying in Scotland?

Hi guy's, thanks for the compliment Frank, yes you do get the bug and it becomes a hobby, when i got past 10 the misses said "you said 10 and thats it", my reply was now it's 20.

I think you go with what's confortable at the moment the tenants dont give me any greif so it makes it a lot easier. I found having a few DSS helped as they tend not to leave as often as employed do so i try to keep it 50/50 and it does make the job a hell of a lot easier.

Regards the income of 45K NET im lucky as again i changed from employed to DSS to make things easier then started to buy to rent to students at £60 per room so the profits double, not every area has a university with not enough accomodation. so lucky for me. I have 5 student houses with 22 student. Multi lets are a good thing.

Alex @oakhillmortgages.co.uk

best buy to let at the moment is Birmingham Midshires who are offering great discounts.

p.s. my property software programme is done im going to trial it this weekend if any wants a FREE copy then leave youre email on this thread and ill email it to you.

thanks

Alex @oakhillmortgages.co.uk

Hi Alex,

I'll take a peak at the software if you dont mind mate?

simon.heald@telecity.com

Cheers

Simon

I wouldn't mind a copy Alex. Email is zubair@ip3.co.uk Regards,

Zubair

me too please alex - tomharwood88@hotmail.com

thanks mate.

tom

Me too, Thanks.

sarah.clarke@environmet-agency.gov.uk

please send me a copy aswell

Thaks in advance

Russell

russell@propertyinnovations.net

please send me one to

thanks

leigh

leigh@lharrison.fsbusiness.co.uk

Hi Alex,

could you also please contact me regarding the software on nektarios.georgalas@bt.com

Thanks and keep up the good work guys!

Aris

Hi guy's, the free software stops now so please no body else ask as ive now got enough people to trial it with. You will all receive a copy this week ive just got to trial it first.

All the best

Alex @oakhillmortgages.co.uk

thanks for this alex.

tom

By the way guys you will all need Access on your systems as the database is built in Access, this automatically comes with office 2000 and above.

If you don't have this then you will have to email me your address and ill post you a copy out and this will upgrade your system to office 2000 which has Access on it. Not legal i know but im just trying to help out.

The database will then work.

yours

Alex

Alex,

Will Office 2000 supercede Windows XP. I have XP but don't appear to have access?

Regards

Russell

You will need Access to make it work as it's built in Access, i can send you a copy if you like.

Alex M

Hows the trial on your new software going Alex? Any good?

Hi Simon

At the moment it has to be said that i can actually use it and know what im doing, its dead simple and easy to use. It tells me when gas checks need doing and also when buildings insurance has run out and also keeps track of all money spent on a property, also keeps track of essential repairs.

Also tells me when rent is due weekly ot monthly, and it's dead easy to put multi lets in as i had it built for this reason, there is also a tenant application form attached to each tenant.

Ill know more by Friday and hopefully i can email you all a copy.

thanks for your interest

Alex M info@oakhillmortgages.co.uk