Buy to let property

[Petrilorcheese]

I know that on MN btl landlords are viewed as evil rachmanns most of the time, but I'm not looking to start a debate on whether btl is good or bad.

My question is how do I get into It, and WIBU to buy a single 3 bed property or 2 small 1 bed flats?

I have about £50k for a deposit. In the area I'm looking I could get a 3 bed semi in a reasonable part of town that needs a bit of updating for £160k, or a 3 bed terrace for about 20k less. Or in a worse part of town for 40-50k less.

Or flats are about 70-80k.

DP suggests 2 flats as I'm splitting my risk. But I just worry it's twice the work and hassle. I'm also looking at this long term, I plan to rent the house out for at least the next 10-15 years, I'd like a tenant who wanted to stay long term...and to my mind it seems a family home would be more suitable for that?

I'm not looking to make a massive profit just to cover my expenses. My plan is to rent it at the lower end of the market range (if I got the 3 bed semi 700 per month rents are usually 750-800).

Is it a bad idea? I'm not happy to leave my Money in the bank any longer and want to do stuff with it.

If you can afford it I would suggest you land bank instead of buy-to-let. Even just a very small plot can be easily flipped for large profit within a couple of years. Buy-to-let is very risky.

You’re going to get flamed

do your research wrt tennancy laws and tax.
if all fits with what you think go for it.
good sensible landlords are needed. not everyone can and wants to buy a home, but everyone needs a safe home that a good lardlord can provide.

Don't buy anything that's leasehold, which normally excludes flats. I've given that advice so many times to people I know and when they ignore it a few years down the line they are moaning about changing freehold owners, rising management fees, lack of property maintenance...
When I was buying property the advice was to look at 2 bed houses in an area that wasn't the worst in an area, but that wasn't the best either. In other words the sort of area where people will look to rent because they can't afford to buy, but hopefully will look after the property.
BTL is fraught with peril, even if you use what is supposedly a reputable letting agent. Just make sure you take out good landlord's insurance that will pay rent if the tenant stops, until they are evicted.

Are you fully aware of all the legalities of being a landlord? Have you looked in to the tax you would be paying? Will you manage it yourself or via an agency? You say you just want to cover your expenses, will 700 p/m be enough for everything?

Be a good landlord. Take out British Gas landlord cover then they will automatically make sure the gas safe certificates are in place. You can arrange for the tenants to be able to contact them direct if they need to, and you get involved if BG need to charge for anything. They are absolutely brilliant at getting to vulnerable tenants quickly. They were with an old lady in one of my properties within hours last winter.
If you use agents (recommended at least at the start) read their T+C's very carefully. Make sure you know about cancellation term for example.

Make sure the property is clean and tidy for letting. Don't provide anything non-essential such as furniture and white goods. If they break or get wrecked you're obliged to replace them.

I wouldn't charge much under the going rate as they are less likely to look after it.

Apparently one bed apartments are the easiest lets.

Despiwhat some will say it’s not especially difficult most of the time and if you want a long term investment and you buy in a safe area you will probably not regret it.

Buy in the best area you can afford.

Yes the leasehold point was something that occurred to me, a good friend is owner/ occupier of a flat in a small building (Victorian conversion) and is trying to buy the freehold with the other flat owners but it's a lengthy and expensive process.

I'd like to be a sensible landlord. I'm a pragmatist generally so that should help. I'm planning to buy sonething that's right financially not that i have any emotional attachment to..I'm thinking of what makes financial sense rather than what I'd like.

I can see a 2 bed may appeal to more people than a 3. Will see what the prices are for those.

Lots of good advice thank you!

I will need to go over the figures again but I think when I did some rough calculations about 700 a month would cover the mortgage and allowed for a month or two of no rent between lets. Obviously if I charged more that could cover maintenance etc but I was planning to cover that from my own pocket (maybe that's wrong) as I'm seeing it as a long term investment.

The trouble with a 2 bed is that families often grow and need a three bed. A 3 bed is a safer option if you want a long term family let.

The rent needs to cover maintenance too. It's a business investment and it should at least wash its face.

I’m a PT BTL landlord. Best investment i’ve ever made.

My thoughts....

• Buy freehold instead of leasehold do you can control maintenance etc.
• Remember flats tend to have big service charges
• Get a good account (and remember the fees are tax deductible)
• Form a relationship with a decent estate agent who will advertise your property
• No need to pay for ‘fully managed’ by estate agents - have a trusted set of tradesman to hand
• Make your you have landlord insurance in place
• Join the NLA (National Landlords Association) who will give you advise and make sure you keep on top of your legal obligations
• Keep properties in a good state of repair
• If your gut says no, don’t rent to them. It will probably end up problematic

Personally I’d at least go with a range or think about lowering the rent after the initial six months if you can use it as leverage to sign some sort of extended lease or better still use the extra to update / upgrade the property which may keep the tenant but also add value for you. Otherwise I can’t see how charging a lower rent helps. It doesn’t guarantee you a ‘better’ tenant. Indeed could put off potential tenants who will wonder why.

Voice of bitter experience - just don't buy leasehold. Just don't. All can change overnight when someone else owns the freehold.