Clubbing together to buy a property, buying property without having to obtain a mortgage, how to get on the property ladder with as little as thirty grand

We live in a world where governments and bureaucrats interfere in every aspect of our lives and prevent us from being able to act without infringing some mindless regulation. I would love to be able to invite anyone with as little as ten grand to club together and buy a property but this apparently would fall foul of the financial services.

Start of article about property prices.

Previous page about the banking crisis.

Large companies who have the funds to pay for expensive lawyers can plough ahead and set up property investment companies but the little guy in the street who really needs help at the moment is strangles by bureaucracy. We couldn't all get together for a coffee and decide we like the look of each other and decide to club together to buy a property without attracting the attention of the Financial Services Authority and without investing huge amounts in legal fees.

However, there is nothing to stop me and 2 or 3 friends, or my wife and I getting to together and buying a property. You just can't go looking for likeminded people you have never met. So there is nothing to stop you form talking to friends and family who may be sitting on money in the bank and clubbing together and buying a property.

BUYING PROPERTY WITHOUT HAVING TO OBTAIN A MORTGAGE

So let's suppose there are four of you who all have at least £30,000 sitting in accounts that are earning you £1500 pa each (5%). I have plucked this figure out of the air to make the sums simple.

There are plenty of 3 and 4 bedroom properties for sale in the UK available that can be obtained for less than £120,000 that would produce a rental income of £800/1000 per month. You should be looking for a return of at least 10% in rental income plus future capital growth.

The thing is to be able to go in with the intention of paying as little as possible and be prepared to walk away if your offer is not accepted. Do not negotiate, do not get over excited and panicked into paying more because you might lose the property; there are hundreds of thousands of the damned things for sale. You are looking for someone who has to sell or a bank only too pleased to get some cash back.

HOW TO GET ON THE PROPERTY LADDER

There has never been a buyers market like this at least not my lifetime. Do your homework and find out what properties in your area are being rented at; not what landlords are asking. Attend a few auctions and see what properties are being sold for. Ask estate agents to advise you of any properties where they know the vendor is under pressure to sell. Don't take any notice of what properties are being advertised at in the estate agents windows; this is not what they are selling for.

Be prepared to do a little work but unless you are a builder, don't take on any major work. Don't buy any property where you may have to employ a builder to do major improvements unless you are converting a property into apartments. If you are planning a property conversion, get approximate estimates first.

Don't believe what you see on television programmes where someone has bought a property and spent tuppence doing it up. These types of opportunities come along on rare occasions and they don't show you all the people who come unstuck. It isn't as easy as they make out and that is why so many amateur buy to let landlords have got their fingers burned.

I am not a builder and rarely get my hands dirty. However, I have enough experience to be able to look at a property and have a fairly good idea of what any work is likely to cost and where I can save money. Cheap kitchen units serve just as good a purpose as designer kitchens.

CLUBBING TOGETHER TO BUY A PROPERTY

Finally, if you are clubbing together to buy a property, make sure you are all in agreement and not likely to fall out over something stupid. If in doubt about the personality of someone, leave them out of the equation; as some pedantic individual could cost you money.

Sit down and agree your aims, do your sums and make sure that everybody is onside and isn't suddenly going to need to lay their hands on their money in the near future. And when you are viewing properties - let your eyes be your guide and your money be last thing you part with.