Need advice, preferably from the people of Nottingham. (planning to buy an apartment)

Mihail_Lazarev

Hello, I'm going to buy a flat. Firstly to protect my finances from inflation, and secondly, to live there when I retire. And before that, rent out this flat.

I work in London, but the apartments here are too expensive, so I decided to buy a flat in Nottingham (for around 80 000£).

Can you please tell me, if I buy a one-bedroom flat in Nottingham, will it really be possible to rent it out? Isn't there an excess of flats and a shortage of tenants in Nottingham?

   Is it realistic to rent out such not expensive one-bedroom apartment through an estate agency? Or does the agency not deal with such cheap apartments? 

I am not chasing profit, as I wrote, I just want to invest money so that inflation does not eat them but if I got 200-300 pounds per month of income from this apartment, I would be happy.

I don't know much about finance and real estate, so I would appreciate advice and thoughts on this matter. Are there any critical errors in my plan?

MultiFuelBurner

What research have you done in Nottingham? What rent could you achieve for your £80k purchase? And have you done any research on what it takes to become a landlord with the costs and tax involved?

Plus a thousand other questions 

Grizebeck

I lived there for many years
Where in Nottingham?

silvercar

If you live in a rental property you will struggle to get a BTL mortgage. Of course, it may be that you don’t need a mortgage and don’t rent at the moment as you don’t say, so only saying it as a heads up.

if you are buying outright, would the return be better if you took a mortgage and bought a £200k property using your 80k as deposit and got a much higher rental?

Bluebell1000

Although in a different area, our experience of renting a 1 bed flat was that it was at the lower end of the market, and there were more issues with tenants, issues with maintenance for the flats overall, issues with the letting agency around what they thought was a lettable standard. We are now renting out a larger family house and that's been a much better experience. It's also a lot easier to (self) manage as we are close by. 

Mihail_Lazarev

MultiFuelBurner said:

What research have you done in Nottingham? What rent could you achieve for your £80k purchase? And have you done any research on what it takes to become a landlord with the costs and tax involved?

Plus, a thousand other questions 

Thank you for your responses.  I can buy an apartment with my savings, without a mortgage.  Therefore, it is limited to the above amount.

  And that's why I'm so excited that this amount is literally evaporating on my eyes. In a year I will not able to buy even such an apartment.

 

  One of the apartments located NG7 6AV (this is the postcode of the neighboring tram stop).  A few more options are approximately in the same place or at the same distance from the center of Nottingham.

 What research I have done on this topic:

  At the moment, I looked at what apartments are rented out in Nottingham. It seems like such apartments are rented out starting from £ 400 per month.  The agency also asks £99 per month for full service.  If I rent out a future apartment for 300 per month minus 100 to the agency, I will have +200 £.

  My goal is to offset the money from inflation so that even if I don't have any income, but the money is invested in real estate, I will be happy.

 But I repeat, I have no knowledge in this topic and all my plans can be mistakes.

 Also, I would not want to take out a mortgage to buy a more expensive apartment because I am afraid that something will happen and I will not be able to pay off the debt.

jj_43

the whole plan sounds like a mistake. basic financials: 200£ per month from 80k is 3%! you could put that 80k risk free/no effort in a savings account for 4+%. The yield is way too low, in Nottingham you should be looking for 8-10% yield. That area has limited/no growth prospects, rents/property value will follow minimum wage, which at the moment is quite good 10%! Your actively accepting no or limited income but unaware of the zero capital growth in this area, usually most trade off yield for growth, or growth for yield, your trading off returns. And you have no property experience? why should a tenant put up with another wannabe landlord?

CSI_Yorkshire

Mihail_Lazarev said:

MultiFuelBurner said:

What research have you done in Nottingham? What rent could you achieve for your £80k purchase? And have you done any research on what it takes to become a landlord with the costs and tax involved?

Plus, a thousand other questions 

  One of the apartments located NG7 6AV (this is the postcode of the neighboring tram stop).  A few more options are approximately in the same place or at the same distance from the center of Nottingham.

Hyson Green?  Oof.

Could be worse I suppose - it could be St Ann's.

Grumpelstiltskin

You only have to watch Police Interceptors on  Channel 5 for a few weeks and you ill see what Hyson Green is like.

Van_Girl

It really depends on the apartment and the exact location. I used to own a letting agency in Nottingham and I had some really rough houses in that area, but a few streets away I had some lovely 1 bed apartments in a gated conversion, which were quite popular.

As a PP has said, 1 bed flats don't tend to increase much in value around there, and the service charges can often wipe out any profit from the rent. As can non paying tenants and void periods. I'm not sure it would make the best investment for protecting your cash against inflation 

lika_86

If you want to invest money then there are better ways to do it that are less costly and risky than property. 

If you want to eventually live in the flat then I would buy somewhere you have at least been to and would be happy to retire to. Looks like the postcode you gave is for The Forest tram stop. Other than being convenient for the park and ride into the centre and Goose Fair in the Autumn, there's really not a lot to recommend the area in terms of living there and it's certainly not an area I would have rented in. There are certainly significantly less dodgy places along the tram route. 

You don't seem to have accounted for income tax and other costs of owning a flat (ground rent, service charge, maintenance) in your expected return. I wouldn't become a landlord and certainly not with your level of inexperience.