Thoughts on why the lack of interest / low price ?

Prothet_of_Doom

I've been toying with the idea of a BTL for years (oh the procrastination) and came across this, which I'd fund out of savings I have which are not working particularly hard. So no need for a loan.

http://www.rightmove.co.uk/property-for-sale/property-29354820.html


Now I've convinced my wife that it's worth thinking about, and I've spoken with the agent (or rather the ineffective, uninterested agents employee) to try and obtain further relevant information on the length of the lease.


(and as a laugh, whether it really does have an allocated car parking space, as that is clearly a blatant mistake)


I've also tried to obtain a viewing.


Talk about blood from a stone. It's no wonder the thing has been on the market for so long.


The agent could only tell me, only that the vendor was thinking about redoing the kitchen as he thought that's why he'd had no interest. Despite repeated emails and phone calls (which goes to voice mail, or a colleague who says the person dealing with it will call me back) about the lease and a viewing, I've had nothing useful.


As far as I can see it's
a ) because the estate agent is so slow and uninterested
b ) because yes the bath room is 2 colours and yes it needs a kitchen, and yes if you were going to save up 10% deposit, you'd need the exact same amount to redo it, and if you had that money, you may as well buy a new build flat at twice the price.
c ) the area is not the best (and yet it's NOT the worst)
d) ex council and therefore very erm undesirable


Due to the lack of information, my wife, always the real Prophet of Doom, has now gone from "yeah that's a good idea" to "there must be a reason it's not sold" and thinks my point b is completely incorrect. She thinks people like to put their own stamp on things and I say people like it 'done' so they can move in.


Anyway, anyone want to be the voice of reason (positive and negative)

Kynthia

The first thing I'd think about is what rent would I get, how easily would I get a tenant or am I risking an empty property, what profit am I likely to make after running expenses and tax, how does that compare to investing my £40k in the bank, etc. so I'd do some research and talk to local agents about figures and demand.

Then I'd be investigating whether that property lease allows letting, whether the service charges are excessive, ensuring it is mortgageable should I need to sell, etc.

Much of these can be looked into before even viewing.

fairy_lights

Lets be honest...its pretty grim. It's like the agents couldn't even be bothered to make it look appealing, they could at least have opened the curtains and removed the grubby bed!
The lack of natural light makes me wonder if they are trying to disguise just what a bad state the carpets and wallpaper are in, likewise the blurry bathroom photo could be hiding a multitude of sins. the electric heating doesn't look brilliant either.
Really you would need to completely redecorate, replace the kitchen and probably the bathroom before you could get a tenant in. How much would it rent out for? You have to weight the cost of the improvements it would need against the potential profit you could make.
I do secretly love the turquoise bathroom suite though

silvercar

flat + ex-council. Who knows what improvements the council are planning for the development? Could add massive costs in years to come.

AdrianC

That, to me, looks like a good bet.

What else is there on the market nearby?
http://www.rightmove.co.uk/property-for-sale/property-31705389.html
Excluding mobile homes, auctions and already tenanted - that is IT under £50k within three miles.

There seems to be plenty of scope to quickly slap a B&Q kitchen and bathroom in, and chuck a coat of magnolia and some new carpets around. Say that lot costs you £5k. 6% yield is £225/mo rent. Cheapest nearby 1bed flat (non-HMO) is £415. Yes, it looks a bit nicer - but...
http://www.rightmove.co.uk/property-to-rent/property-46279579.html

If I was local, I'd be on the phone to the agent booking a viewing, and I'd be on the phone to the council to find if there's any plans for the block.

Pixie5740

Why buy one property outright though? I thought gearing was how people really made money from BTL...?

JimmyTheWig

At least one thing you know is which agent to avoid if you are ever selling in that area!

AdrianC

Pixie5740 wrote: »

Why buy one property outright though? I thought gearing was how people really made money from BTL...?

That's what the people flogging BtL mortgages tell you, anyway.

Prothet_of_Doom

AdrianC wrote: »

That, to me, looks like a good bet.

What else is there on the market nearby?
http://www.rightmove.co.uk/property-for-sale/property-31705389.html
Excluding mobile homes, auctions and already tenanted - that is IT under £50k within three miles.

There seems to be plenty of scope to quickly slap a B&Q kitchen and bathroom in, and chuck a coat of magnolia and some new carpets around. Say that lot costs you £5k. 6% yield is £225/mo rent. Cheapest nearby 1bed flat (non-HMO) is £415. Yes, it looks a bit nicer - but...
http://www.rightmove.co.uk/property-to-rent/property-46279579.html

If I was local, I'd be on the phone to the agent booking a viewing, and I'd be on the phone to the council to find if there's any plans for the block.

Thank you. That's the same basic research I have done.


I have spoken with the council housing officer, and the 4 blocks (3 of 9 flats and 1 of 4 = 31 flats) have all been re-roofed and the external doors and windows replaced. The next plan is to replace the storage heaters, which would not include this flat.


The big unknown is the 3 rows of garages which they are gradually taking back and not reletting, so I'm guessing they'll be bull dosed at some point and the land sold to a developer for more flats. BUT he couldn't say as they don't have any time scale or firm plans.




Agent is really !!!!ing me off, as it's "radio silence" . Not surprised it's not sold, as 50% of people haven't got that level of patience.

Prothet_of_Doom

Pixie5740 wrote: »

Why buy one property outright though? I thought gearing was how people really made money from BTL...?

It might be that once it's got a regular paying tenant, that taking some of the equity out in this way will be an option.

Prothet_of_Doom

fairy_lights wrote: »

Lets be honest...its pretty grim. It's like the agents couldn't even be bothered to make it look appealing, they could at least have opened the curtains and removed the grubby bed!
The lack of natural light makes me wonder if they are trying to disguise just what a bad state the carpets and wallpaper are in, likewise the blurry bathroom photo could be hiding a multitude of sins. the electric heating doesn't look brilliant either.
Really you would need to completely redecorate, replace the kitchen and probably the bathroom before you could get a tenant in. How much would it rent out for? You have to weight the cost of the improvements it would need against the potential profit you could make.
I do secretly love the turquoise bathroom suite though

Not a problem with any of that. It needs a few bob spending and some late nights applying TLC. I actually have a Freelance contract coming up in the area, so am happy to camp out in one room, and spend every midweek evening fixing it up.




I have done some worst case / most likely case / best case scenarios and my eyes are open.