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Posts: 67 Forumite
Would like some basic tips on how to value a flat, which I'm
living in. It's a bit early to look at buying financially - though since I'm already renting - it would be good to have an idea how much it would be worth & start saving a mortgage towards.
Have lived in a flat above a Cafe in the small town centre in Cheshire, for nearly a year now. I've rented it shortly after it became available, when the previous owner sold both the upstairs flat & downstairs shop (now turned into a cafe). The flat is now owned, by a property solution company specialises on commercial properties, they have a long-term lease for the downstairs cafe. When my contract runs out - they'd like to continue with fixed term rather than rolling (they've suggested they're happy for a longer contract / get on with them well).
I'm thinking perhaps they've originally got the upstairs at a discount a year ago (part of the downstairs shop deal - the rent from the flat alone, is only 18.7% of the flat+cafe rent put together); that their main focus is commercial properties rather than residential - so this upstairs flat is possibly an odd fit for them. That said as they're expecting the area to be more popular over time (hence leasing the cafe)- it's reasonable to assume the flat upstairs won't be empty for long if I leave (they charged me 3x monthly rent as deposit originally!).
My question: when it comes to a non-normal flat (e.g. above a shop) - I'm a bit stuck for valuation. For a normal flat, would have assumed the monthly rent multiplied by approx. x125- x150 to buy / and around 175-200x to sell?). Would a flat above a cafe be noteably less? or still maybe x120 at the absolute minimum?
I'm thinking they'll either reject outright (if they're confident about the ability to attract revenue & the area); or they might consider it useful, to boost cashflow of their core business (then again commercial loan is still cheap - for a company that does what they do the money raised, if they do sell won't be likely to make much difference). Either way. Would be interested to hear your views.
living in. It's a bit early to look at buying financially - though since I'm already renting - it would be good to have an idea how much it would be worth & start saving a mortgage towards.
Have lived in a flat above a Cafe in the small town centre in Cheshire, for nearly a year now. I've rented it shortly after it became available, when the previous owner sold both the upstairs flat & downstairs shop (now turned into a cafe). The flat is now owned, by a property solution company specialises on commercial properties, they have a long-term lease for the downstairs cafe. When my contract runs out - they'd like to continue with fixed term rather than rolling (they've suggested they're happy for a longer contract / get on with them well).
I'm thinking perhaps they've originally got the upstairs at a discount a year ago (part of the downstairs shop deal - the rent from the flat alone, is only 18.7% of the flat+cafe rent put together); that their main focus is commercial properties rather than residential - so this upstairs flat is possibly an odd fit for them. That said as they're expecting the area to be more popular over time (hence leasing the cafe)- it's reasonable to assume the flat upstairs won't be empty for long if I leave (they charged me 3x monthly rent as deposit originally!).
My question: when it comes to a non-normal flat (e.g. above a shop) - I'm a bit stuck for valuation. For a normal flat, would have assumed the monthly rent multiplied by approx. x125- x150 to buy / and around 175-200x to sell?). Would a flat above a cafe be noteably less? or still maybe x120 at the absolute minimum?
I'm thinking they'll either reject outright (if they're confident about the ability to attract revenue & the area); or they might consider it useful, to boost cashflow of their core business (then again commercial loan is still cheap - for a company that does what they do the money raised, if they do sell won't be likely to make much difference). Either way. Would be interested to hear your views.
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Comments
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Have you asked if they want to sell the flat?
If not then all of the above is irrelevant.0 -
Would you be buying for cash? Typically, a flat above a cafe would not be mortgageable.
Obviously, an unmortgageable flat would sell for considerably less than a mortgageable one.
Personally, I would ask some local EAs if they would be willing to offer an opinion on value.
Some EAs have given me their opinion in similar circumstances - they said they do it to build up good will, in the hope that I would consider using them at some point in the future. (But perhaps not all EAs would be as willing.)0 -
It's "worth" whatever they want to sell it for. That's a minimum of the value any property developer could get buying it and selling it on; and a maximum of thousands and thousands of pounds above the value of an identical flat next door because the owner doesn't really want to sell.0
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You may be above a genteel cafe that closes late afternoon but there is no guarantee that it will stay that way. If it turned into a kebab shop open until 3am would you still want to be living there?0
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They wouldn't have got a 'discount' on the flat. They just bought a complete building for an overall price. You would need an EA to price up the flat. It also depends on the length of lease available.0
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They are interested in buildings with commercial premises in them which is what they have got. When they bought the property the price they paid would have reflected the return that they could get from the cafe and the flat together not just one or the other. If it had only been the cafe they would have paid less.
So your rent and the rent from the cafe determined the price they paid for the property.0 -
Would you be buying for cash? Typically, a flat above a cafe would not be mortgageable.
Obviously, an unmortgageable flat would sell for considerably less than a mortgageable one.
These are factors both when you're looking to buy it, and when you're looking to sell it...
OP - I'd be looking on rightmove at more 'normal' flats and basing my mortgage and savings calculations on them.
However, if you've only just begun to save, then at this stage, really the only answer to your question about how much to save is "as much as you can"0 -
You will probably struggle to get a Mortgage on it. It might be worth seeing if you can get a Mortgage on it before you go any further as properties above food places/bars/off licenses and a few other industries are quite tricky to mortgage (and in turn sell - if you decide to sell down the line).I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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No doubt you've heard of "Snakes and Ladders". With this type of property rather than getting a foot on the property ladder you would probably be getting it on a property snake.If you are querying your Council Tax band would you please state whether you are in England, Scotland or Wales0
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