First time owner,buy to let

sim2335

Rumana03 said:

sim2335 said:

Look to get a 1 bed room flat I seen today, as a buy to let it’s 95k and 5 minutes drive from my house 107 years left on lease

My mum will help me out and broker said they could get me 75k

So I would put down 20k deposit.

The Monthly rent is £550

I would pay:

landlords insurance

Ground rent

Service charge

Estate agencies

All this looks like I will pay £300 a month.

Anything elese I need to pay?

It has 107 years left, the whole point of buying it is to make a profit.

I will already profit from rent.

Then sell it in 5-7 years when I can afford freehold or sooner if I have a partner.

I have a buy to let property which only has 6 years left on the mortgage till it has been paid off. At the beginning everything seemed pretty straightforward and not too much hassle but as the years have gone on it has been an absolute nightmare. Sometimes it felt like life revolved around that property and there was so many issues to deal with. Back in the day things were easier for landlords and there were less rules and regulations but now you have to be so clued up with it all. Then there's the yearly self assessment tax return which I absolutely dread completing every year because it's pretty long.

I've seen good tenants and bad tenants. I once had a tenant suddenly leave (left lots of their belongings in the property) and they hadn't been paying bills so the electricity & gas had been cut off to the house. It was a very stressful time & I spent a goor couple of hours or so sorting it all out.
The current tenants I have owe me over £14k in rent arrears and I am still waiting for the eviction to take place. To say it has been stressful is an understatement! And I very much doubt I will get those rent arrears back.

Honestly I don't know why anyone in their right mind would want to get a buy to let especially now as things become harder for landlords and the law tends to protect tenants even if they are in the wrong.

Could you not have got insurance to cover rent until you evict tenants?

if you pay estate against fees, they should deal with all this for you?

Rumana03

My insurance does not cover the rent payments unfortunately. I'm lucky that the home insurance covers legal expenses otherwise things would be a lot worse for me.

I don't go through estate agents anymore. They are not very good at vetting tenants and don't do what they say they will.

But honestly the whole thing is just not worth it. I brought at a good time but if I hadn't and was looking at BTL now, I wouldn't even bother. I can't wait till my mortgage ends and I can sell the property and be done with it all.

You are better off buying a flat for yourself as others have suggested. The value should go up so you wouldn't be making a loss and you would be putting your money to use. I have been to many viewings over the last few months and it's shocking how many landlords are selling and getting away from that all. That alone should give you an indiction how bad things are becoming for landlords. A lot of the properties we saw had tenants refusing to leave and I think that is becoming common now.

Gycraig

Honestly the profit just doesn’t seem there in your figures, 550 rent for a 95k property is fine for a house, not for a flat. 

By the time you have paid mortgage,taxes,ground rent, service charges, repairs, void periods estate agents etc etc there isn’t going to be much profit, and that’s without a tenant ruining your property and not paying rent requiring an eviction. 

Just buy the flat and move in it’s far far easier, or at least save enough for a house. I’m looking to rent my house out next year and looked at exactly what your thinking of doing due to being able to remortgage 25k out of mine, I couldn’t make it work. Especially with new epc rules coming in, it wipes out half of the “budget” end of the market.  

On top of this you will need to pay like 6k extra stamp duty on your actual house when you buy it 

sim2335

Thanks for the advice, I’m not going to do buy to let.

Now I just need to decide to buy a flat now and move in or wait years and years for when I can afford a  freehold?


I think best to get a flat now and move in, then sell it whenever ready to buy freehold, as it’s leasehold what are the pitfalls, if it’s over 100 years.

one huge one is because it’s not free hold paying service charge and ground rent.

Rumana03

sim2335 said:

Thanks for the advice, I’m not going to do buy to let.

Now I just need to decide to buy a flat now and move in or wait years and years for when I can afford a  freehold?


I think best to get a flat now and move in, then sell it whenever ready to buy freehold, as it’s leasehold what are the pitfalls, if it’s over 100 years.

one huge one is because it’s not free hold paying service charge and ground rent.

You never know you might get lucky and find a place which has no service charge and ground rent or one which has minimal service charge and ground rent.

We're actually in the process of buying a maisonette which has no service charge or ground rent. The lease is over 900+ years as well.

When you start looking for a place just make sure when you ring to enquire about the properties ask about service charge, ground rent and lease length. So many adverts don't have this information. When buying consider how much it will all cost you (for example if the lease will need re-newing after a few years, that is an additional cost to consider).

Good luck!

Wanderingpomm

sim2335 said:

Thanks for the advice, I’m not going to do buy to let.

Now I just need to decide to buy a flat now and move in or wait years and years for when I can afford a  freehold?


I think best to get a flat now and move in, then sell it whenever ready to buy freehold, as it’s leasehold what are the pitfalls, if it’s over 100 years.

one huge one is because it’s not free hold paying service charge and ground rent.

What do you mean by freehold? You mean a house? 

ikcdab

If you want to add value, then the best thing is to buy a run down property, do it up, then sell it on. Use the profit to then buy a bigger property etc.
Of course, it's not as easy as that, you need to buy carefully, and minimise what you spend doing it up so that you do make a profit and take other costs into account, but it is doable and very satisfying.

markin

ikcdab said:

If you want to add value, then the best thing is to buy a run down property, do it up, then sell it on. Use the profit to then buy a bigger property etc.
Of course, it's not as easy as that, you need to buy carefully, and minimise what you spend doing it up so that you do make a profit and take other costs into account, but it is doable and very satisfying.

If you aren't the builder the is not a lot of profit in it. Wrecks are often priced to account for the amount of works needed.