Buy to let advice

Deathwalker

I am looking to purchase a buy to let property( my first one) and I am debating whether to purchase a leasehold apartment (probably in central Manchester) or a freehold house in Lancashire. The purchase price for both is fairly equal and the rental return is also similar 650-750 per month.
However the costs are substantially higher with the apartment due to service charge/ground rent etc and payments would probably require topping up from me personally. The house would cover it's own costs on a monthly basis.
My dilemma is that the rental profile is probably more stable with a single person professional in Manchester than a family in Lancashire and also the value of the apartment is more likely to rise in line nationally than a house in Blackpool for example.
Any advice on the pros and cons would be greatly appreciated.

Thanks

ognum

Deathwalker wrote: »

I am looking to purchase a buy to let property( my first one) and I am debating whether to purchase a leasehold apartment (probably in central Manchester) or a freehold house in Lancashire. The purchase price for both is fairly equal and the rental return is also similar 650-750 per month.
However the costs are substantially higher with the apartment due to service charge/ground rent etc and payments would probably require topping up from me personally. The house would cover it's own costs on a monthly basis.
My dilemma is that the rental profile is probably more stable with a single person professional in Manchester than a family in Lancashire and also the value of the apartment is more likely to rise in line nationally than a house in Blackpool for example.
Any advice on the pros and cons would be greatly appreciated.

Thanks

I would say you need to do more research on the availability and need for both types of accommodation.

It believe that the key to buying is location, buy in a location where rental property will always be required, I would always by in a better location so look at the two areas you can afford and don't buy in a down market area, sorry I don't know either.

While you will have to pay service charge for the flat you will not have any other (or shouldn't) external upkeep so no new roof, gardening etc. Service charge can be set against tax but so can some maintenance on a house.

If everything was equal I would go for the house but it doesn't sound like it is. I think I would buy a flat as long as it has a long lease and a good amount of money in the service charge account!

carslet

Also make sure you look at it as at least a 10 year investment.

lpp1980

Absolutely depends on the area and the rental demand. I'd opt for a house personally, because the service charges can be expensive on flats. Flats tend to have a higher turnover of tenants too, whereas families or couples tend to stay put for longer. I wouldn't want to worry about leases either and getting them extended. Of course, its your choice.

ognum

lpp1980 wrote: »

Absolutely depends on the area and the rental demand. I'd opt for a house personally, because the service charges can be expensive on flats. Flats tend to have a higher turnover of tenants too, whereas families or couples tend to stay put for longer. I wouldn't want to worry about leases either and getting them extended. Of course, its your choice.

What about capital growth which the op suggests would be better with the flat?

ognum

lpp1980 wrote: »

Absolutely depends on the area and the rental demand. I'd opt for a house personally, because the service charges can be expensive on flats. Flats tend to have a higher turnover of tenants too, whereas families or couples tend to stay put for longer. I wouldn't want to worry about leases either and getting them extended. Of course, its your choice.

I have found no evidence for this, I have houses and flats and my longest staying tenant is in a flat. the houses turn over as frequently as the flats as they are often a stepping stone on the buying ladder.

Of course it depends on your area, my houses are geared to professionals and have expensive ( relatively) rents and they are located in an area where the professional population can be transient or searching to get their own property but I Have never yet had a void of more than a few days that I need to prepare a property.

It is all about knowing your market!

Guest101

Just one bit of advice. Families tend to look after properties better overall than single persons.

Exceptions on both sides of this. But families generally look at longer commitment and want a home.

Young professionals, especially some I know, change jobs every 6-8 months.