Buying a leasehold flat to rent

Pixie5740

£450 pcm? Seriously? That's a very good yield on a £50k flat although I don't understand why a tenant would pay £450 pcm for a flat they could buy themselves for just £50k.

What do you mean when you talk about buying the freehold?

Personally I would get the lease details from the Land Registry and not the estate agent. The estate agent probably doesn't have them anyway and is getting the details from the vendor so it's best to do your own due diligence.

davidwood681

Pixie5740 wrote: »

£450 pcm? Seriously? That's a very good yield on a £50k flat although I don't understand why a tenant would pay £450 pcm for a flat they could buy themselves for just £50k.

What do you mean when you talk about buying the freehold?

Personally I would get the lease details from the Land Registry and not the estate agent. The estate agent probably doesn't have them anyway and is getting the details from the vendor so it's best to do your own due diligence.

There are millions of people out there who can't get a mortgage and have no choice but to rent

Pixie5740

davidwood681 wrote: »

There are millions of people out there who can't get a mortgage and have no choice but to rent

Who pay as much as £450 pcm to rent a 1-bedroom flat valued at £50k?

Out,_Vile_Jelly

A £50k flat is not likely to be located in a smart, high-earning area, meaning potential tenants are a bigger risk. Letting is a business and you have to clear about risk.

davidmcn

Mr_Big wrote: »

so bare with me

But we hardly know you! We might bear with you though...

I was looking on land registry and it said it cost between £9.99 - £49.99 to get the leasehold details, can I ask where you get it for £3?

Are you sure you were looking on the Land Registry website and not one of the other scammy places that try to kid on they're an official site?

Could be request the estate agent to give me these details about the leasehold as a potential buyer?

Yes, you can try that.

I assumed that you would just get property insurance that would cover any kind of big damages like rooftops etc. If you buy the property freehold?

Think you're misguided about what insurance is for. It only covers specified risks, generally for sudden events e.g. storms, not general wear and tear.

Mr_Big

Ahh fell for the old "bare with me" spiel hook line and sinker! Ha ha I remember I used to work in a call centre and was always advised not to say that, I guess I'll never learn.

Well let me just start by saying the property was originally up for £70k. It's been about 3 months and is now currently at £60k. From what I've gathered, no ones exactly in a rush to buy it which is why I'm thinking I may be able to knock them down a bit more to £55k, but again that's me being hopeful. I'm quite surprised the property hasn't been sold already myself for the price and roughly calculating what it can earn rent wise, which is why I'm wondering if there's something I'm missing here, but I've still got to check out the property myself and get a surveyor in. From what I've researched, seen and been told so far though, the property looks great for the price. I can only assume if everything is in order that it's due to people not having the money or being eligible to get a mortgage on it as Dave stated. I've double checked the land registry site but it still seems the same price, I'll up a pic so you guys can see it (can't seem to upload pics here, will continue looking but the site is: landregistry-deeds.co.uk/lease/). I'll ask the estate agent as well anyway, no harm in having two copies. Ahh I see! So you can't specify what things can be included in insurance then in terms of roofing etc? This does slightly change things. So, do you think it's safer to stay leasehold? Or is it too much of a rip off when they start asking for overpriced charges on unnecessary fixes?

The area isn't high end to be honest and I am aware that the tenants may be higher risk, but I'm on a budget so can't really go higher than £60k and I intend to interview any potential tenants and see statements to get an idea of what their lifestyle is like etc. I don't think I will accept tenants on benefits. I know the area well so I know there's low crime there and everyone is generally friendly, I've not heard of anyone having issues with rent etc.

When I say buying the freehold I mean owning the property and the land. From what I've read, it's better to own the freehold too cause then you're not forced to pay expensive charge fees as and when. But if insurance doesn't cover these kinds of things, I kind of wonder now if staying leasehold and just extending the lease is not actually a bad idea?

You guys have been great, thanks.

davidwood681

Pixie5740 wrote: »

Who pay as much as £450 pcm to rent a 1-bedroom flat valued at £50k?

I agree, but that isn't what you asked

davidmcn

Mr_Big wrote: »

I've double checked the land registry site but it still seems the same price, I'll up a pic so you guys can see it (can't seem to upload pics here, will continue looking but the site is: landregistry-deeds.co.uk/lease/).

But that isn't the Land Registry. Look at the bottom of the page. Designed to catch out the gullible. You want the .gov.uk site.

hazyjo

It's a flat. You can't buy the freehold. It will share the same ground as other flats. Unless the freehold for the entire block is for sale? The flat will still, however, remain leasehold.

somethingcorporate

sal_III wrote: »

You are correct that with Freehold property you are making the decisions, while with a Leasehold they are made by someone else. But if the roof leaks and need repair, ultimately the cost will be roughly the same for a comparable properties.

If you have a lift as a Freeholder (most likely scenario would be a share of Freehold) and it breaks how is it any different if the flat was Leasehold? Or are you telling me you will just leave it broken?

You are falling into the trap of comparing apples to oranges - e.g. Flats (generally leasehold) to houses (generally freehold).

Except you can get both freehold flats and leasehold houses so not really sure it is comparing apples with oranges.


If you had a lift and stairs and the lift breaks you, of course, can wait until you can afford to replace it if you are freehold. If you are leasehold and it breaks you have to pay when the management co tell you to. If not they can put you in breach of your lease, get a charge on your property etc.


Freehold gives you the option of choice - you can choose how, with who and when you undertake repairs. Leasehold removes this choice.


If it were me I would save up and buy a small freehold house.