BTL for £50,000

MSforums

Huge list of 2 bed terraces on Rightmove for £50,000 - around Rochdale, Doncaster (North of the country) that offer nice returns. They often come with a tennant in situ. And can fetch around £500 per month in rent.

Some of these terraces have been modernised inside and are ready for the rental market. It is these terraces I'm interested in.

As a newbie BTL, I'm thinking of taking a punt and purchasing one of these houses.

What would be the risks involved from the more experienced landlords on here?

(p.s. I'm also looking at student flat investments, but I've been told the flats depreciate in value over time because they are not fully on the free market - limited buyers).

00ec25

loads of posts already offering advice for newbie LL

use the search function

ask yourself if they are such "good value" rental yield, why are they for sale, and by whom?

I agree student market is not for a novice as it is rife with get rich quick schemes that leave the owner far from rich and the developer laughing all the way to the bank

JayRitchie

I am entirely dubious about those figures. If the gross return was so good local landlords would be diving in.

AdrianC

£500/mo rent before management costs. Then, of course, there's maintenance - voids - damage.

Even then, I think you might be being optimistic...
https://www.rightmove.co.uk/property-for-sale/property-78026336.html
Tenanted - £375/pcm rent. Before management costs.
https://www.rightmove.co.uk/property-for-sale/property-79397741.html
Tenanted - £4200/pa = £350/pcm rent. Before management costs

'course, you don't even need spend as much as £50k...
https://www.rightmove.co.uk/property-for-sale/property-74104615.html - £35k. Looks perfectly decent, yet it's been on the market since September...

Remember - that sort of money is sub-prime areas even in those sub-prime towns. A third of a mile away, there are 2-bed houses for £90k.
https://www.rightmove.co.uk/property-for-sale/property-73614022.html

The people who are renting 2-bed houses for £350/mo are sub-prime tenants. This is not going to be a low-ongoing-cost business model. Expect higher than average debts, voids, and damage.

MSforums

00ec25 wrote: »

loads of posts already offering advice for newbie LL

1. Are you suggesting it is better to buy slightly more expensive houses in better areas with better tenants than taking the risk buying the cheapest houses and tenants not paying their rent?

2. Do those £50k houses ever appreciate in value, or does their price stay the same due to location?

3. Does the local council or the tenant pay the rent - if the tenant is claiming housing benefit?

4. How easy do those £50k houses sell on the open market?

DCFC79

Post 7 here has some links you should read


https://forums.moneysavingexpert.com/discussion/6090572/buying-out-sibling-share-of-inherited-house

missprice

MSforums wrote: »

1. Are you suggesting it is better to buy slightly more expensive houses in better areas with better tenants than taking the risk buying the cheapest houses and tenants not paying their rent?

2. Do those £50k houses ever appreciate in value, or does their price stay the same due to location?

3. Does the local council or the tenant pay the rent - if the tenant is claiming housing benefit?

4. How easy do those £50k houses sell on the open market?

Hows about you look online for all recent sales, prices, houses currently for sale and previous prices sold for. All freely available for you to do your own research

AdrianC

MSforums wrote: »

1. Are you suggesting it is better to buy slightly more expensive houses in better areas with better tenants than taking the risk buying the cheapest houses and tenants not paying their rent?

Yes.

2. Do those £50k houses ever appreciate in value, or does their price stay the same due to location?

"Ever"? Well, they didn't used to be £50k-worth...

3. Does the local council or the tenant pay the rent - if the tenant is claiming housing benefit?

UC only pays the landlord direct if the tenant has fallen into arrears. The claimant is generally trusted to be a responsible adult who can manage their own finances.

4. How easy do those £50k houses sell on the open market?

What are RM links if not "the open market"? Search for similar Sold and STC properties on RM. Also look at recent sold prices on LR etc, and search for the historic listings on the portals. You'll quickly get your own picture.

But simply DON'T try and do all the buying and setting up from a distance. Make sure you understand the market and the area locally - otherwise you're just handing a blank cheque to an EA...

Are you really sure this is the best possible way to invest your £50k cash...? Until and unless you can put your hand on your heart and say "Yep, absolutely", don't. And remember what JayRitchie said above... Why aren't the local landlords buying them up? Indeed, why are they selling the tenanted ones?

diggingdude

I would have thought this is only likely to work if you are a local landlord, a member of the community and have people you know to live in these houses. Other than this the voids/non payment terms may mean you lose money

csgohan4

Been watching homes under the hammer have we? want to be a property business? Do you have know the legal and tax implications of being a LL?

Can you afford void periods, eviction costs?

00ec25

MSforums wrote: »

1. Are you suggesting it is better to buy slightly more expensive houses in better areas with better tenants than taking the risk buying the cheapest houses and tenants not paying their rent?

2. Do those £50k houses ever appreciate in value, or does their price stay the same due to location?

3. Does the local council or the tenant pay the rent - if the tenant is claiming housing benefit?

4. How easy do those £50k houses sell on the open market?

do you need a lesson on how to search rightmove sold prices?

do you know how to use a search engine for looking up facts?