Becoming a landlord

money_free_2011

Good morning,

I am looking at buying a property to rent out. I have approx 20-25K for the deposit and currently looking at 2 bed flats for circa 120K (Dont worry not in the South )

My questions are:

Would it be better to purchase 2 x properties with smaller deposits or lump all into 1?

Also what are views on property managers. Is it worth going solo. I am not the best at DIY and therefore in my mind would prefer paying up front for all cover all costs. Am I right thinking this is approx 13-15% of income? There a lot :mad:

Are there any other costs I have not considered? Property manager, Tax on income, gas safety, insurances, initial set up costs, deposit scheme, any repairs if not covered via PM?

I appreciate any views on this. I am literally starting out on this, and therefore any good websites or literature would be good. What I see so far are individual views on parts of the subject therefore the most un biased views would be appreciated?

Thanks all :beer:

LEJC

Would you be buying with a BTL mortgage....?
Typically they require a 25% deposit...how does that still stack up to your abilty to purchase a 2 bed flat

booksurr

read GM's posts covering advice on:
becoming a LL: http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12
picking agents : https://forums.moneysavingexpert.com/discussion/4765736

13 -15% for a fully managed service is at the high end of the typical range so yes that is what you may have to pay
I am not however sure that you really understand what is meant by "paying up front for all cover all costs"

some FM agents prefer you to give them a pot of money up front and authorise them to spend from that pot without having to seek your permission for each job. Agents love that as it enables them to use the contractors with whom they have agreed "referral commission" rates ie kickbacks meaning some of your repairs money ends up in the agents profits not actually spent on repairs

you may need to rely on contractors to do the work because you cannot do DIY but that is no reason for you not to control the costs yourself

jjlandlord

money_free_2011 wrote: »

have approx 20-25K for the deposit and currently looking at 2 bed flats for circa 120K (Dont worry not in the South )

My questions are:

Would it be better to purchase 2 x properties with smaller deposits or lump all into 1?

You should compare the relative yields and prefer the more profitable option.
On the other hand, spreading the risk is always good.

Another cautious option is to start with one small property (if the demand is there of course), see how it goes, then use the rest of the cash to buy a second one.

Pixie5740

Why become a LL? Is that really the best way to invest your money? Have you explored other avenues that will give better returns for less hassle?

Read the links booksurr has provided as clued up tenants can make mincemeat of inexperienced landlords relying on letting agents to get everything right.

ACG

I dont think your deposit is enough to get 2 properties at £100k+.

Your going to need a 20% deposit minimum although 25% is the norm.