BTL - Studio/1-bed in London or 3-bed in Midlands?

balsingh

I am trying to get some personal opionions on the above scenarios.
Do I buy a tiny studio/1-bed in London Zones 1/2 to rent out to a single professional or a couple ....

Or do I buy a nice big 3-bed house up in the Midlands (Leicester/Nottingham/Northamton) to rent out to a group of 3/4 students.

I assume total rental income to be a tad higher from the students ... but I am told its a lot easier to get a place in London rented. Also, in the long term, havign property in London is always a safe bet.

Any opinions on the above scenarios?

Doozergirl

If the competition was between a 3 bed house rented to a family in the midlands or a studio/1 bed in London, the London property would win hands down. Rent is far too low in the Midlands.

A student let? You'll get a better return if you let out the rooms individually but there's a lot of administration involved, a lot of regulation surrounding Student lets and a house full of students are more likely to trash the place and cost you more in redecoration and maintenance than one professional would.

Ultimately, the decision should be down to the return you get. For me, if the return wasn't much higher on the student let, I'd still pick the London flat.

lynzpower

Depends whereabouts the studio flat is in london. Im of the opinion that returns are not that great rental wise in london at the mo, from anecdotalevidence of mates of mine getting real bargains rental wise. Also to say, that if I had £200 a week, or even 150 a week for me & OH we certainly wouldnt choose to rent a studio flat when there are one and even 2 bedroom flats going for the same price

All boils down to figures in the end.

Also to say, If I had a 3 bed house anywhere, I personally would rent to the LA housing dept for higher rates and no voids.

EdInvestor

Watch out for the new rules on Houses of Multiple Occupation (HMOs) re the student let idea.

These could be very expensive: I've heard lots of landlords are selling up such properties now because of them - so there may be "bargains" on the market which turn out not to be so cheap after all.

I'm surprised anyone can make any money on BTL these days, yields being so low.

balsingh

lynzpower wrote:

Also to say, If I had a 3 bed house anywhere, I personally would rent to the LA housing dept for higher rates and no voids.

Do the LA usually have people availabel for the houses? How are the rates determined? Can you ask for any amount (within reason)?

amboy

EdInvestor wrote:

Watch out for the new rules on Houses of Multiple Occupation (HMOs) re the student let idea.

These could be very expensive: I've heard lots of landlords are selling up such properties now because of them - so there may be "bargains" on the market which turn out not to be so cheap after all.

I'm surprised anyone can make any money on BTL these days, yields being so low.

Quite right, take a close look atthe 3 bedroom property, the main aspect being fire safety, tenants should not have to exit through a high risk area to get out if there was a fire.

ie. you cannot exit through a kitchen or bedroom as means of escape,

The LAs are gong to have a lot of powers now to make you do things, if a tenant complains about damp for instance, they will come round and do a FULL housing and health risk on the property. Even if there are minor issues unrelated to the damp they wil issue you an improvemnet notice, charge you £300 for the privelige and give you a strict 6 months to do the work. no grants available unless you have a 3 storey licensable property.

IMO, BTL investors who are entering the market now should be very wary as to what they buy, you could also argue that a lot of us have had it good for a long time

Now is the time however to make sure you are profssional and work with the LA to bring your houses up to standard.

amboy

lynzpower wrote:

Also to say, If I had a 3 bed house anywhere, I personally would rent to the LA housing dept for higher rates and no voids.

Do you have any experience of this scenario, may be interested, but wuld like to know who sets rent levels etc.

bamberbamboo

lynzpower wrote:

Also to say, If I had a 3 bed house anywhere, I personally would rent to the LA housing dept for higher rates and no voids.

what is the LA housing dept?

balsingh

bamberbamboo wrote:

what is the LA housing dept?

Its the Los Angeles Housing Dept.

Just kidding ... Local Authority Housing Dept.

bamberbamboo

balsingh wrote:

Its the Los Angeles Housing Dept.

Just kidding ... Local Authority Housing Dept.

Brilliant.... lol



So does that mean rent directly to your local housing association? as in they pay the rent to you and they rent the house out??

balsingh

in simple terms .... yes!

they usually have DSS people who need a place. obviosuly the house must meet a set criteria and I assume the amount of rent has to be discussed too. The housing association are alos very strict that when things go wrong at the house, they must be put right asap.

Its not always as clear cut though. My parents had a flat rented through their local housing association for a year. When the tennant moved out, the housing association (for some reason) couldnt find anyone else to go in. My parents waited a month, eventually they advertised and found someone themselves anyway.