BTL, house or flat?

[ShouldIBuyToLet]

I'm in the very early stages of considering buying to let. The end goal really is that my DC will be able to live in this property. (For various reasons DC is unlikely to be high-earner or go to uni/college.)

The area I'm in has lots of small two up, two down terraces and I was thinking one of those would be good, but there's also, for a similar price, some new build flats close by. New build flats are rare as hen's teeth here atm. (All the other flats are converted houses.) It looks like rental income would be similar for both.

I'm kind of assuming tenants in a house would likely be families and tenants in a two bed flat would be more likely to be young flat-sharers.

The other option would be to prioritise paying off my own mortgage, which still has a significant amount to go.

Have any of you any advice? Has BTL had it's day? Have house prices peaked? Is now not the time? (DC is only 7, so it's not like he'll need somewhere to live anytime soon...) Would you choose flat or house? Why? Should I pay off own mortgage and then think about this?

Any/all thoughts appreciated.

There are a lot of people against BTL on MN but I think it's a good idea. Could you speak to an estate agent and ask for their opinion on which is the better buy?

Does the flat have other charges on it for care of the roof etc?

If you can do it alongside paying for your own mortgage, do so, but remember a BTL mortgage is different and might cost you more per month.

Depends where you are. We do BTL in London where it's a good bet. How's your local property market?

We do flats as it's easier to get tenants for them than families round us. But you can charge a lot for a house once you get the tenant. I'd advise flats though as in our local property market, vacant rental houses always linger a lot longer on the market than flats do - we've barely had a void period in a decade of BTL>..

Having tried it, I'd avoid flat-sharers as tenants. You'll end up fielding calls about John not doing the dishes or Mary not chipping in for electric, especially if they're young.

Yep hummus vg point. Another reason for small flats!

Lol, yes, I can imagine those calls. I've been a tenant in flatshares and even though I'm very nice now, I'm pretty sure I was a less than ideal tenant

I read some of the other BTL threads so I know MN is quite anti, but well, hey ho. I'm wanting to do the best I can for my family in an imperfect system.

Property market is fairly buoyant atm here.

"Josh doesn't flush the loo" was particularly memorable. Josh was 38 at the time, IIRC.

I wonder if Josh knew why he was flat-sharing at 38?

Josh was the reason I put an age cap on tenants. Rightly or wrongly, I decided that if by 30 you can't flush the loo spring for a one-bed in a cheap-ish town, you're probably not going to make a great tenant.

Like most landlords, I started off very open to HB, unusual tenants, pet rats etc, and learnt the hard way why most other landlords don't.

Never rent on a room by room basis - cause yourself hassle and will have a high turnover as people aren't friends.

I would go for a flat for BTL - less 'spiky' maintenance issues to deal with e.g. roof, damp, new windows etc. No garden requiring maintenance.

Remember about new build flats tho - won't be new once you've bought it and resale might be harder.

yes always harder to let in a big new build block as chances are there'll be several other flats nearly identical to yours also up for rent at the same time

The flats I'm kind of looking at there only are 12 but they're not up yet so I can't see them! I'm kind of expecting that most of them will be rentals.

Could you afford both mortgages if the BTL was empty for a while/you had non-paying tenants without dipping into savings?

If not, then it's a non-starter imo. You'd be better off paying down your residential mortgage.

We could though it'd be tight. However, from the quick look at numbers I did, I think rental income could be more than twice mortgage repayments, so we'd be able to build ourselves a bit of leeway I think.

How much are letting fees? I think last time I looked it was about 15%. Does that sound right?

And what about tax? Would it be normal income tax level?

Get yourself onto landlordzone and have a proper good read up.

Ooh, okay, thanks!