Considering Options: Studio Buy To Let?

Rautavaara

Just considering all my options. I was thinking, there are a number of really nice Studios for sale, in really good locations. Having checked out various EAs the monthly rental on studios in the same location range from between £700 - 800+pm.

If I went for the studio option, I'd have a vastly smaller mortgage. That, and going down the buy-to-let route, ensuring there are tenants, I'd earn a few hundred every month after costs/repayments etc.

Now, I don't have to move out of where I am. I can stay and save, for a while longer at least, although preferably I'd like my own place. That being said, if there are benefits to me staying put, then I'd be happy to do so.

One of my concerns is with regards to the re-sale of a studio. They seem easier to buy, but not so easy to sell. The other concern is whether there would be much appreciation in price say over the next couple of years. London is the only place seeing price rises at the moment, but that is no guarantee ... who knows what is around the corner?

The other side is, come the worst, I'd at least have a place of my own, albeit a little smaller than what I would hope, and I would have saved/repaid almost enough to half the mortgage amount.

Is this a potentially good route to go down if I want to both a) continue saving, b) make money, c) sell on at a profit? What are people's experiences?

Advice would be welcome

BitterAndTwisted

I wouldn't live in a studio-flat if you paid me. The only reason people rent them is because they can't afford anything else and would rather live in a shoe-box on their own than share a larger place with other people. This probably makes them great for BTL but not ever for a home of your own.

If you don't own any other property I don't understand why you're considering a BTL rather than buying a home for yourself to live in long-term.

Rautavaara

BitterAndTwisted wrote: »

If you don't own any other property I don't understand why you're considering a BTL rather than buying a home for yourself to live in long-term.

Because I can stay where I am more or less free of charge, make money from rental, continue to save, and in doing so build up more cash + equity to buy a bigger place in a couple of years time.

The other option is to simply continue saving, and not invest in a BTL property. Currently, buying a home where I want will prove to be difficult, and leave me with a pretty big mortgage. This is why I am considering different options.

Where I an considering there is definitely a market for Studio rental and at good rates.

Marvel1

Rautavaara wrote: »

Because I can stay where I am more or less free of charge, make money from rental, continue to save, and in doing so build up more cash + equity to buy a bigger place in a couple of years time.

The other option is to simply continue saving, and not invest in a BTL property. Currently, buying a home where I want will prove to be difficult, and leave me with a pretty big mortgage. This is why I am considering different options.

Where I an considering there is definitely a market for Studio rental and at good rates.

The only advise I can offer is don't think as a BTL as just simply renting out and making money, there is a lot more to it. What happens if the tenant falls behind on payment? Damages the property? If something needs repairing like the boiler, this needs to be fixed asap.

redped

Rautavaara wrote: »

there are a number of really nice Studios for sale, in really good locations.

One of my concerns is with regards to the re-sale of a studio. They seem easier to buy, but not so easy to sell.

come the worst, I'd at least have a place of my own, albeit a little smaller than what I would hope

Alarm bells would be ringing for me ... while the potential rental income would be good, if you can't sell it in the future then you're stuck, especially if you're not overly keen on living in it yourself.

ILW

In the property crash of the early 90s, studios were virtually unsellable at any price.

Rautavaara

With regards to repairs, that wouldn't be such an issue, as with the rental income + savings it could be easily covered (unless every item in the property decided to fall apart!)

My biggest concern was the sell-on. I guess the fact that I have seen the same studios still on the market for some time says a lot. Some don't seem to want to budge on their advertised asking price, although I can't help but think they'd have to reduce it significantly in order sell.

Running_Horse

I remember a recent programme saying some lenders won't touch studios at the moment.

That may change if things boom again, or you may be stuck with a lemon that nobody could buy even if they wanted to, which they probably won't.

If you can afford to stay where you are and save, then why not just do that? BTL is not a license to print money any more, and not many do it to increase their purchasing power in a couple of years.

Sounds like you are getting distracted from your mission to buy somewhere.