Buy to let studio flat in London

IronWolf

1.5k to 2k a week seems high for a 500k property, unless they are very short lets, you will get nowhere near that. Do you honestly think a 20% yield is realistic?

London BTL yields are typically a lot lower, even in prime areas. On a 500k property you're more likely looking at 3k a month rent.

lawlie

1.5-2k a week must only be for short term lets i.e. plenty of vacant times in between. For a 5-600k 1 bed flat in W2 or W9, you are probably looking at about £500-£600 a week.

Skag

So based on those figures it's a no-go for investment.

SliAbhaile

Skag wrote: »

Well, presumably this is rented out so the rent pays the mortgage.

I'm living in a central London flat which I bought from the mortgagees in possession for exactly half the price the original punter had paid for it in the last property boom.

That happened before and might happen again.

atush

Skag wrote: »

There's no mortgage on the properties. So, smaller value houses IN central London?

Well you could mtg them and use the equity to fund a purchase/renovation. As you have no mtg, you also are paying full income tax on the rent as you have less to deduct like mtg interest.

In any case, I meant a cheaper place in london OR one in a good area you could add value to by the previous mentioned ways. But large Studios or one beds ripe fo renovation in good areas don't grow on trees. But buying low and increasing value are the way to higher yields.

BarleyGB

Im in a similar position and seriously considered buying a flat in London to live in while im working here short term, then to rent out when I relocate elsewhere.

I decided against it as it was to bigger risk, 500K represented to big a chunk of capital to tie up in an asset which could go down. What happens if the london bubble burts and you lose 25% value? I know this is unlikely but you need to balance the risks vs benefits?

In hindsight prices have risen 10% since I ruled out the option, only you can decide how this investment sits with your own circumstances? Depends what percentage of your assets 100K represents?

BarleyGB

1.5k to 2k pw sounds quite optomistic?

Also bear in mind prospective tennants will also usually negotiate a 5/10% discount, then there's 10-15% to the agent, voids to cover, ground rent / maintenance to pay etc.

steampowered

Skag wrote: »

Well, presumably this is rented out so the rent pays the mortgage.

This is a big assumption. Remember that interest rates are at historic lows and have been for some time. It is a fair bet that we will see significant interest rate rises over the next few years which would drastically increase your mortgage repayments.