Assessing resale difficulty

GDB2222

Ybe said:

GDB2222 said:

Ybe said:

I like the flat but my main concern is I’m asking myself what I get for the larger cost of this flat. The same area has much cheaper 1 beds and even 2 beds which are close to the price of this one. 

I’m not surprised that you can find bigger flats for the money. It’s quite pricey on a per square foot basis. 

You have to factor in that it’s conveniently located, close to the station and not too far from the shops, whilst being in a pleasant spot, with some good parks nearby. You do pay extra for that. The block itself looks nice:  well maintained, with a pleasant garden. 

As an example this one - https://www.rightmove.co.uk/properties/155678693

That’s on the main road. So, location wise, it’s less valuable. 

It’s got more square footage, but rather a lot of that is hallway, which is not much use. 

GDB2222

https://www.rightmove.co.uk/properties/156980978

How about this? In the old Friern Barnet Town Hall. £290k for a one bedroom flat. 

Not as convenient for transport, but not too bad. And £100k cheaper! 

Ybe

Well yes plenty of other options.  On Cavendish, when I ask myself if hypothetically I had to sell it the month after I buy it for whatever reason, could I achieve the same price, I’m not so confident. Which makes me think it’s overpriced. 

  GDB2222 said:

https://www.rightmove.co.uk/properties/156980978

How about this? In the old Friern Barnet Town Hall. £290k for a one bedroom flat. 

Not as convenient for transport, but not too bad. And £100k cheaper! 

GDB2222

Ybe said:

Well yes plenty of other options.  On Cavendish, when I ask myself if hypothetically I had to sell it the month after I buy it for whatever reason, could I achieve the same price, I’m not so confident. Which makes me think it’s overpriced. 

  GDB2222 said:

https://www.rightmove.co.uk/properties/156980978

How about this? In the old Friern Barnet Town Hall. £290k for a one bedroom flat. 

Not as convenient for transport, but not too bad. And £100k cheaper! 

I can’t comment on that, but, at £400k you are in the price range of two bed flats, and they are probably easier to sell. 

Even with similar floor area, I would think that there would be more potential buyers for a two bedder, even though the living room would be smaller. 

That is not to say that you should buy a flat that doesn’t suit you, but you should be aware of the drawbacks when you come to sell. 

It works both ways, though, and maybe you should try a cheeky offer? The flat is empty, and the LL must be fairly keen to sell, as it is costing him money each month.  If you are thinking of walking away because of the price, you have nothing to lose by offering a figure you would be happy paying. 

Ybe

GDB2222 said:

Ybe said:

Well yes plenty of other options.  On Cavendish, when I ask myself if hypothetically I had to sell it the month after I buy it for whatever reason, could I achieve the same price, I’m not so confident. Which makes me think it’s overpriced. 

  GDB2222 said:

https://www.rightmove.co.uk/properties/156980978

How about this? In the old Friern Barnet Town Hall. £290k for a one bedroom flat. 

Not as convenient for transport, but not too bad. And £100k cheaper! 

I can’t comment on that, but, at £400k you are in the price range of two bed flats, and they are probably easier to sell. 

Even with similar floor area, I would think that there would be more potential buyers for a two bedder, even though the living room would be smaller. 

That is not to say that you should buy a flat that doesn’t suit you, but you should be aware of the drawbacks when you come to sell. 

It works both ways, though, and maybe you should try a cheeky offer? The flat is empty, and the LL must be fairly keen to sell, as it is costing him money each month.  If you are thinking of walking away because of the price, you have nothing to lose by offering a figure you would be happy paying. 

What would be a cheeky offer? 10%? 

GDB2222

I don’t know the market that well, but yes 10%. Some would say that 10% is a standard opening shot. 

Would you be happy buying at £360k?

Ybe

GDB2222 said:

I don’t know the market that well, but yes 10%. Some would say that 10% is a standard opening shot. 

Would you be happy buying at £360k?

£360k would make a big difference. 

ReadySteadyPop

Ybe said:

GDB2222 said:

I don’t know the market that well, but yes 10%. Some would say that 10% is a standard opening shot. 

Would you be happy buying at £360k?

£360k would make a big difference. 

Why are you concerned about re-sale value, are you aiming to make it a home or are you trying to make profit?

Ybe

ReadySteadyPop said:

Ybe said:

GDB2222 said:

I don’t know the market that well, but yes 10%. Some would say that 10% is a standard opening shot. 

Would you be happy buying at £360k?

£360k would make a big difference. 

Why are you concerned about re-sale value, are you aiming to make it a home or are you trying to make profit?

Well I’m not really. I’m more concerned about affordability for me. I’m assuming it’s better not to overstretch yourself. And obviously the higher your outgoings are, the less disposable income you have. 

Herzlos

Ybe said:

Herzlos said:

Ybe said:

Herzlos said:

Ybe said:

ReadySteadyPop said:

ReadingTim said:

Ybe said:
 

True. What turnover rate would be more of a red flag to you?  I’ve noticed some new builds especially seem to always be on sale. 

Enough with the desktop analysis and "red flags" already - get out, view the place and ask yourself if you want to live there and would buy the place.  If yes, then chances are that other people will think the same thing. 

It really is no more complicated than that.  

It is, "wanting" to live somewhere, and "liking" somewhere is different to being able to afford somewhere or being prepared to pay asking price for somewhere, I think this flat is a loss waiting to happen.

Interesting. What makes you think that? 

Because for the last 21 years he's been absolutely adamant that a huge price adjustment is right on the horizon. Thus any property bought now will lose money.

Maybe one day he'll be right, but it's not today.

Interesting. So what’s your view? 

As a prospective landlord? I'm not sure it'd be worth it given the fees to buy and then the tax you'll pay on the rental income. It's value will invariably go up in the long term (>10 years) but may not grow enough in the short term (<5 years) to cover your expenses. In terms if ROI I'd probably try and buy 2 flats at £200k each than one at £400k.

As a resident it's more viable to buy/rent, it's a nice flat, but I don't know London well enough to comment.

So would you say this property is like buying a new build in terms of same risk it might depreciate or flat line for the first 5-10 years? 

Not like a new build, just a large property purchase. The value will trend slowly up with some temporary dips down.

The risk comes from the related costs rather than the house value: at £400k for a 2nd home you'd be hit with £27,500 in stamp duty. That'll take a while to recoup, especially if you're paying higher rate tax on the rental income.