Invest in a flat or not?

sezzles1967

I am very new to this investment game. As a result of marriage breakdown I have roughly 70-75K to invest. I need an income of about 350 per month. I cant afford to buy anything locally so I'm looking further afield.
My question is that is it a risk to buy a flat to rent out or should I be looking at other ways to invest my money and get an income?
I have seen lots of new build student lets in Liverpool, but they seem to good to be true.
I would appreciate any guidance as I really have no idea what to do for the best. Many thanks

Kynthia

Things that look too good to be true usually are. Investing all your money in property is risky, especially if you are reliant on an income. Property sometimes has voids with no tenant to pay rent, repairs and maintenance costs where the boiler may break or the roof leaks, you need to pay for finding new tenants or to evict bad ones, you may have tenants that don't pay rent for months, etc. Can you afford all of this?

You'd need to do a lot of research to get a property that commands enough rent with a low enough purchase price to make a good annual profit. After these costs and tax are taken from this profit does the yield beat less risky and time consuming investment options?

davidmcn

I would suggest first trying to reduce the amount of income you "need", as nothing's guaranteed to give you a net yield of 6%.

Hoploz

Where are you living? Do you pay rent on your home, or do you have another mortgage?

I'd be most inclined to improve my own standard of living and buy a home for myself before looking for other investments, if I didn't already have one. There are various schemes to help people buy their own homes and that is a substantial deposit in most areas of the country.

Pixie5740

What kind of student rentals are you talking about? Studios? Pods? Proper flats with 2+ bedrooms?

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10852153/Student-digs-offer-a-harsh-lesson-for-investors.html

Cakeguts

£70 to £75K in the north of England is not enough for a trouble free let. If you want to buy something that attracts the best kind of tenant you will need to spend more than that.

david_hmg

This might sound obvious but one thing you have to check when buying a flat is the lease
how much is the ground rent and the services charges in some cases the service charge can be high and many buyers are not aware of this and sometimes the sales agent is not in possession of the correct information. Check with the managing agent. If you are to let the property you must take this into account. also the freeholder might charge you if you wish to 'sub let' i.e. rent the flat.on an AST.
Due the sums hows much is total cost in balance to rent income and never calculate on 12 months rent being paid if a tenant moves out there will be a gap before the new tenant pays rent.
Student market is even more complex the old student house or flat is being left behind by the new highly equipped developments with large numbers of rooms all en suite with extensive facilities and management. Most of these are operated by large specialist companies. There are some developers who offer student apartments too individual investors. be careful the management charges can be high, and make sure you doing buy into 'last years model' The returned can be high but the standards and competition is getting higher as more larger investors come into the market with new developments.
The basic answer is do your homework

3card

I have just done the very same to what you are looking for.

I also looked at the 'student' accommodation but after a few days of thinking about it and checking it out with google i decided it was too much of a gamble and as someone said 'if it looks too good then is probably is'
With the student side these are usually furnished accommodation and that again was another downside by me because you would have to replace the furnishing more regular.

I have ended up purchasing an apartment near to where i live for less than 80K with a tenant already in place paying £545. I know the service charge and ground rent isn't fixed but at the moment I'm returning a net of over 7%

Im not reliant on the income from the apartment because i have used savings and some of my pension to fund it and i look at this income as part of my pension long term.

I would say investigate the options in more detail.
There are apartments around within the midlands area within your price range and giving the return you are looking for

Good luck

Jamie66

I think it is a good idea to invest in property

Jamie66

altough you have to be careful of frauds

sezzles1967

thank you everyone. its a minefield. unfortunately I'm in SE England, prices are sky high and in rented (£1200 a month, 3 bed semi) following marriage breakdown. Cant get a mortgage on my own due to previous bad debt and not earning enough. The only way I can think of to get an income is to buy a small apartment as savings pay nothing .