Should I buy to let?

Generali

Conrad wrote: »

C'mon dopester, this is going a bit far. You have failed to factor in the Human spirit and comparative investment yields into this. Yields will be outrageously high if your scenario comes to pass.
Having control your own space is a key Human driver, indeed the territorial imperative is within all organisms.

Even 6 years of WW2 didn't end the world as we know it. People dusted themselves off, and aspired, just as this will from this upheaval which is minor compared to WW2 in terms of impact on daily lives. If prices were going to fall for 20 years, then surely WW2 aftermath would have been the time.

To act as Devil's advocate, after WW2 there was a genuine shortage of housing as much of the country's housing stock had been reduced to smouldering piles of rubble.

If house prices fall, yields remain high only if rents hold up.

I'm not saying that this is likely, far from it, but it is a possible outcome.

Who would have predicted 18 months ago that 2 of the top 10 UK banks would have been nationalised, Lehmans gone bust, the US investment banks all cease to exist in a 'pure play' form and every developed country government (I think) be forced to guarantee most bank deposits?

MissMoneypenny

Generali wrote: »

If house prices fall, yields remain high only if rents hold up.

Some singingpig lls are saying that they are having to offer incentives to attract tenants because of the oversupply of rentals. Incentives like low rent with a rent review after 6 months and free broadband.

A girl my son works with, has been trying to rent out her own flat. She had to give bills included (not electric or gas) to get a tenant.

chucky

ad44downey wrote: »

In London that's more likely to be 2 to 3 thousand pounds per year

unless you have a lift or porter in the building you'd pay under £1,000.

just shows how much of a clue you DON'T have...

how's the council flat?

neverdespairgirl

chucky wrote: »

unless you have a lift or porter in the building you'd pay under £1,000.

just shows how much of a clue you DON'T have...

In my experience, most of the blocks of flats in central London have a service charge of at least £2k a year. Ours does.

While most of the blocks don't have porters, they do generally have lifts.

neverdespairgirl

This WC1 flat (3 beds) has an impressive SC of £5.5k a year:

http://www.rightmove.co.uk/viewdetails-19397536.rsp?pa_n=2&tr_t=buy&mam_disp=true

This flat, also WC1, (3 beds) SC £3k a year:

http://www.rightmove.co.uk/viewdetails-19828084.rsp?pa_n=3&tr_t=buy&mam_disp=true

WC1, 2 beds, SC £4k a year:

http://www.rightmove.co.uk/viewdetails-18348631.rsp?pa_n=10&tr_t=buy&mam_disp=true

WC1, 1 bed, SC £1.9k a year:

http://www.rightmove.co.uk/viewdetails-18126688.rsp?pa_n=13&tr_t=buy&mam_disp=true

WC1, 3 bed, SC £750 a year:

http://www.rightmove.co.uk/viewdetails-24066035.rsp?pa_n=13&tr_t=buy&mam_disp=true

WC1, 1 bed, service charge £2,850 a year:

http://www.rightmove.co.uk/viewdetails-19397362.rsp?pa_n=14&tr_t=buy&mam_disp=true

chucky

a high service charge is definitely a no go for a BTL then.
mansion blocks are the worst for these and there are lots of these in WC1 and the Marylebone area. they probably have a high sinking fund too that is for future repairs to the building. It just needs a bit of investigation before looking into diving into a BTL in one of these. unless there is a massive discount on the buying price there is no point in investing in one of these for BTL.

converted flats in terraced are usually best - very low service charges.
my maximum i have is around £500 + (£350ish for each flat) buildings insurance for a 2 bed.

none of the service charges i contribute to have a sinking fund, porter or lift.

stevetodd

chucky wrote: »

a high service charge is definitely a no go for a BTL then.
mansion blocks are the worst for these and there are lots of these in WC1 and the Marylebone area. they probably have a high sinking fund too that is for future repairs to the building. It just needs a bit of investigation before looking into diving into a BTL in one of these. unless there is a massive discount on the buying price there is no point in investing in one of these for BTL.

converted flats in terraced are usually best - very low service charges.
my maximum i have is around £500 + (£350ish for each flat) buildings insurance for a 2 bed.

none of the service charges i contribute to have a sinking fund, porter or lift.

This is one of the reasons that from now on I am only interested in freehold houses, although I would be interested in a very small block if I could buy them all with the freehold

chucky

neverdespairgirl wrote: »

WC1, 1 bed, service charge £2,850 a year:

http://www.rightmove.co.uk/viewdetails-19397362.rsp?pa_n=14&tr_t=buy&mam_disp=true

this one is just crazy. after all of your charges, fees etc it would be virtually impossible to get any sort of a decent yield off it. i'm working out at around 2.7% (being very, very top heavy too with a £400 a week rent) on a cash purchase which is not great at all. realistic rent on this would be under £300 i imagine.

this is an exception and there is much, much better than this around to invest in.

chucky

stevetodd wrote: »

This is one of the reasons that from now on I am only interested in freehold houses, although I would be interested in a very small block if I could buy them all with the freehold

there are quite few around still it's just finding them. leaseholds aren't a no go, you just have to be a bit more careful with them.

off the top of my head look at these with a low service charge and rental return would be ok too.

http://www.foxtons.co.uk/property-for-sale-in-westbourne-grove/nhgt0193226

similarly this

http://www.foxtons.co.uk/property-for-sale-in-notting-hill/nhgt0182882

but then you have this, that doesn't tell you about the service charge. however it's guaranteed to be high as NDG has pointed out on similar properties above.
http://www.rightmove.co.uk/viewdetails-10214796.rsp?pa_n=2&tr_t=buy&mam_disp=true

napoleon

chucky wrote: »

unless you have a lift or porter in the building you'd pay under £1,000.

just shows how much of a clue you DON'T have...

how's the council flat?

Oh dear. chuckey the clown gets it wrong again. :rotfl: