Purchasing my 1st buy to let - advice required please

geek84

Good Morning Folks

I am in the process of purchasing my first buy to let property.

As you know, there are certain advantages of purchasing a BTL within a 5 mile radius of where you live - i.e. easy to get to, and you may already know the area etc.

Does that mean purchasing a BTL in, for example, another town/city, comes with its own set of disadvantages and that I should concentrate on purchasing my first BTL close to where I live until I get further experience of the BTL business?

Thanks in advance for your responses.

poppysarah

A reason for staying close (and it will depend where you live as to how far 5 miles is in terms of "far" ) is you'll know local tradesmen for when you need jobs doing.

What does your business plan have in it so far?

geek84

Hi poppysarah

Thanks for you reply.

I don't have much of a business plan - at present I am just considering whether or not to purchase a BTL closed to home or not.

notanewuser

geek84 wrote: »

Hi poppysarah

Thanks for you reply.

I don't have much of a business plan - at present I am just considering whether or not to purchase a BTL closed to home or not.

You need a business plan to tell you whether it's even a good idea to buy a BTL property, never mind where!!!

G_M

Location is one aspect of your business plan.

If you plan to manage it yourself, then being close is a distinct advantage - but not next door.

If you plan to use a letting agent, the costs need to go into your budget and location is less of an issue.

But target market is equally important. Close by, what volume, and catagory, of renters are there?

Have you read:

New Landlords (information for new or prospective landlords)

geek84

Thanks G_M.

I will have a read of it.

AlexMac

I've saved stacks of money by being sufficiently close to my BTL that I can easily manage myself without agency fees-

but I have a reliable builder who does the stautory stuff like annual gas certs and any electrical work as this needs certification, and who has a track record of immediate response to anything I can't handle myself such as major leaks or boiler repairs/replacement. I also have a specialist landlords' supplier of cheap replacement washing machines, fridges, beds, etc who will deliver (and cart away) the next day, to keep tenant happy, in place and thus minimise void periods.

But while (even if using an agent to find and ref-check tenants, and a professional inventory clerk- worthwhile in these days of Tenant deposit protection) I like to do get ins myself to look 'em in the eye establish that understanding about rights and responsibilities (I'll fix stuff immediately if they keep the place right, change light-bulbs, etc) it is of course possible to do everything by phone and email or via an agent; even in the case of my DIY management I've organised a major emergency repair from holiday in Italy with a quick 'phone call.

The key thing about profit will be the ratio of cost to rental value; so I guess you might have to buy at a distance to secure a place in an area of low values and high rental demand.

And also, in some areas (like here in SE London) public bodies like Councils or Social Landlords are crying out for landlords prepared to hand properties over on 3-year agreements with full management arrangements- so buy and forget. The downside is that wear and tear could be more than severe, but the rent offered is good, with no finder fees, TDS costs, inventory or agency management fees

geek84

Thanks AlexMac

Werdnal

Before you embark on buying a BTL property, I think you need to do much more research and business planning, especially around how to avoid and deal with situation like you got yourself into back in January:

https://forums.moneysavingexpert.com/discussion/4387935

Did you ever successfully evict her? Get you rent arrears back?

geek84

Good Morning Folks

I have decided to purchase a new build to use as a BTL.

Could someone be kind enough to give me a mini checklist to go through with my solicitor and builders, before releasing the funds?

Thanks

somethingcorporate

Your solicitor will do the required legal searches etc, have a look at the local planning portal to see local plans, get a decent survey (even if it is new-build).

I suggest you read everything they send you very carefully and make sure if you have any demands (such as a snagging list) that they are fixed before exchange or included in the contract (preferably the former for you to inspect it is satisfactory).

Not sure what else these is to know (and I am currently buying a new build myself).

If you have a good solicitor they will be happy to answer any "stupid" questions you have.

Edit: Is it a flat? then there is a whole world of pain to do with leasehold that requires you to contribute for the upkeep of shared parts which can easily hoover up a couple of thousand of cash each year. If it is a flat and you've not owner one before I would STRONGLY suggest you buy a house (and I am the owner of a B2L leasehold flat).