Buying to rent

mahoney

I'm looking to buy a small property to rent. I need it to be rented constantly so I'm thinking a flat near a station... Possibly Surrey / London as that is where we live. But of course it's such an expensive area to buy, so maybe further north - as far up as Yorkshire. Leeds / Sheffield? Looking to spend max £100k inc solicitors.
I believe flats are more easily rented than houses.
Any tips?

dimbo61

So many questions I dont know where to start!
Have you got £100K sat in the bank
Why do you want to become a landlord
How are you going to sort out a broken window or faulty boiler if you live 100/150 miles away ?
Why do you think flats are easier to rent than houses ? do you live in a flat. Service charges, Gas safety checks, etc TAX on profit if you make any

Werdnal

Every LL I know, including myself, would love a property that would be "constantly" let, but come on, we live in the real world!

Read this:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

and every other page it links to, so you understand what becoming a LL is all about. There is a lot more to it than many people think - buying the property is the easy bit, so if you have questions at this stage, me thinks you have a lot to learn!

By the way, flats are often impossible to let - if they are leasehold, the head-lease could forbid it, so thats your first step on your LL educational ladder!

mahoney

Thanks for your reply. The 100k would be part mortgage. I'd like to have a second property to aid pensions later in life - possibly sell one day for a profit. I'd like to an agency to take care of the property as far as repairs go. I've just heard that flats are easier to rent, but I imagine that a house in the right area would be as good.

mahoney

Werndal, I'm posting as I would like help and pointing in the right direction. Yes I do have a lot to learn as I'm sure you once did.

mahoney

That's a very useful link, thanks. Good starting point.

Werdnal

mahoney wrote: »

Werndal, I'm posting as I would like help and pointing in the right direction. Yes I do have a lot to learn as I'm sure you once did.

And my reply was helpfully pointing you in the right direct to an excellent thread by a fellow member here (GM) which is a guide to newbie LLs.

You don't have to thank me, but no offense was meant to you either!

Perhaps I'd better keep my advice to myself in future as you obviously don't appreciate it!

If you get offended so easily, wait until you have a smoking, pet owning, non-paying tenant in a flat which has a non-smoking, non-pet keeping tenancy and no rent coming in!

MiserlyMartin

I think too many people have been watching too much property !!!!!! on TV...

I blame the idiot broadcasters for putting so much of it on

mahoney

I do appreciate the advice . I've just read the thread and there's a lot in there. Some scary bits too about tenants from hell. I rented once and seem to remember the deposit was quite high - wouldn't that cover any damage - depends on the damage you say.

What makes people want to be LLs then?

Werdnal

mahoney wrote: »

Thanks for your reply. The 100k would be part mortgage. I'd like to have a second property to aid pensions later in life - possibly sell one day for a profit. I'd like to an agency to take care of the property as far as repairs go. I've just heard that flats are easier to rent, but I imagine that a house in the right area would be as good.

Remember that selling a 2nd property at a profit would incur Capital Gains Tax.

Werdnal

mahoney wrote: »

I do appreciate the advice . I've just read the thread and there's a lot in there. Some scary bits too about tenants from hell. I rented once and seem to remember the deposit was quite high - wouldn't that cover any damage - depends on the damage you say.

What makes people want to be LLs then?

Mine was similar reason to you. I was made redundant in 2000, and used my redundancy pay to buy a cheap flood-damaged flat, did it up and rented it ever since (with a few voids and one bad tenant along the way). Provides income from rent, and hopefully a profit (less CGT) when/if I sell it. TBH the way the property market is going, it may also become a first home for my son when he needs somewhere, as doubt he'll be able to afford to buy.

It can be great when you have 100% solid gold tenants, who abide by every last comma and full stop in your tenancy agreement, who never waiver on paying their rent on the dot every month, who devote many hours caring for your property as if it were their own, and when/if you want the property back, move out at the merest mention of giving them notice. BUT, you must do your homework as life is not like that!

There is a lot to learn, it is not rocket science or brain surgery, but learn it you must. You cannot prevent tenants defaulting on rent, you cannot prevent tenants damaging the property, but you can prepare yourself - emotionally, financially and legally for when the worst happens.

As you will be buying with a mortgage, you must also keep a good contingency of cash in reserve for missing rent, emergency repairs etc. Some LLs will quote something like 6 months rent and the cost of a boiler!

Deposit is meant to cover small amounts of damage, cleaning and minor repairs necessary at the end of the tenancy, but having read nightmare stories here, it rarely covers the wanton vandalism some disgruntled tenants can leave behind!