Buying to let, can anyone with experience offer advice with this please?

king_walnut

I have seen a place go up near me on rightmove. It's a 5 storey place with 3 flats within, and all of them are currently occupied by tenants at a total of 18k per year. The property is on the market for 215k

I am new to the game so could someone with experience offer their insight onto whether or not they think it's going to be worth it? I'm going to look at it later, and I've already been myself to look at the outside of it and it does look pretty run down. I.E definitely needs new windows and the outside needs painting.

I know with property investment it's a risk no matter what I do, but it's kind of scary and was hoping I could learn more from here. Or could someone direct me to a more specialised forum where I could get some better help?

Thanks.

P.S I already have the capital to purchase the place.

googler

A forum search will bring up lots of previous threads with links to the basics, especially a long thread by G_M with lots of useful info.

Also; does the capital to buy this form all, most or a small part of your available investment capital? If either of the first two, my recommendation would be to diversify your risk, i.e. don't put all your eggs in one basket.

Fire_Fox

Too many variables, for example
- does it definitely have all the right planning permissions and registrations to be let as flats?
- Are you purchasing the freehold including all the flats or the freehold excluding the long leases to the flats?
- Do you understand the reams of legislation surrounding being a landlord?
- Do you know how much it will cost to renovate and can you afford that?
- Do you know how long it will take to renovate and can you do without tenants/ rent all that time?
- What is the yield considering ALL the costs involved?
- Have you ever renovated a property before?

Agree with Googler it is well worth running an advanced search.

clutton_2

the most important thing to check is if the tenants are on REGULATED tenancies...... if they are,its probably they are paying a tiny rent and you will not be able to charge market rent - ever.....

ruggedtoast

A run down tenanted property that costs £215k as your first buy to let, but you currently dont know anything about buy to let.

That horse has three legs.

Werdnal

Read this:

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

and all the links it contains. Vefore you even think about becoming a LL, you need to understand the legal rules and regs, tax implications etc. Failure to comply can lead to heavy fines, criminal record or even prison sentence!!!! Right, now that got your attention, back to the property you have in mind.

Buying with tenants can be fraught with problems. Many newbie LLs look at it as less hassle as tenants already there so everything done for you - WRONG!

You must get copies of all the agreements in place for these tenants as you will be bound by everything in them if you buy. You automatically inherit the existing terms and conditions, and you cannot make any tenant sign a new agreement with you. Also, depending on how long the tenants have been there, and the type of tenancy they have, you may not be able to evict them or increase the rent.

Then you have the state of the property itself. Sounds pretty neglected. Possibly the tenants have stopped asking the LL to do repairs because they do not have the money. You buy, you immediately become responsible for all repairs and maintenance that the previous LL has failed to comply with. If these points are major, tenants can also land you in the smelly stuff with the EHO, to enforce urgency repairs. Could rapidly turn into a bottomless money pit!

You may have seen £18K a year rental income mentioned, but I suspect most of the first tyear will be spent on putting this place right! You also need to check that this figure is rent actuall received, and not what the rent charged equates to, ie do you know these tenants are good payers, have you asked for proof? Or are you just being blinded by EA speak on what the place "should" be making if all tenants pay regularly and no arrears. Are the tenants paying from their own pocket, or are they on benefits?