BTL - At what price is this feasible?

Jaynorth_2

Hi

I am currently trying to sell my flat and wondered at what price a buy to let investor would consider the yield to be enough to cover the purchase of my flat. Is this calculation possible? Flats in my block rent for between £850 to £900 pcm

A current tenant told me he pays £850 pcm but the condition of his flat is very poor - damp on walls and pipes sticking out of the kitchen floor. My flat is in good condition although the kitchen is slightly dated so I am guessing it could rent for £900 pcm just like other properties in the block.

dimbo61

Price is only one factor to be considered.
Location, shops, transport links, parking, size and shape of rooms, condition of bathroom/kitchen , rent and service costs ( service management charges ).
Tenants like nice new clean kitchen/bathrooms etc

kingstreet

The remaining lease term will also be a factor for anyone looking to buy the property.

missile

I would be looking for 7% yield

Jaynorth_2

Okay thanks, there is allocated parking, it has good transport links and lease is 99 years. In the 2 and a bit years I have been there I have noticed that none of the tenanted flats have ever been empty. The last flat that sold in the block was beginning of 2011 and it was bought by BTL investors, who had to update it before getting in tenants and they got tenants within a month and they have been there ever since.

kingstreet

99 years left, or 99 years at the outset?

How old is it?

Jaynorth_2

kingstreet wrote: »

99 years left, or 99 years at the outset?

How old is it?

99 years left - original lease was for 125 years and all of the flats have the same lease.

kingstreet

Ok. That should be fine.

Jaynorth_2

kingstreet wrote: »

Ok. That should be fine.

So is there any way at all that I could gauge how much an investor would be willing to pay for my flat? say a ballpark figure...

kingstreet

I think it's fair to say the answer, as unhelpful as it inevitably is, will be "as little as they can possibly get away with."

All you can do is keep the price you're asking under review. If you're getting no viewings, it may be overpriced. If you're getting viewings but no offers, it's probably the property itself...

Jimbo1976

Ok lets take missile's desire for a 7% yield.

if you flat rents out for £900pm, then thats £10,800 per year. If missile wants a 7% yield then that would indicate a value of £154,285

If we take a lower yield say 5% then that gives a value of £216,000

So there is a huge variance depending on what yield a BTL investor wants.

You are better off using local sold prices from a property portal to assess the value of the property