Please advise - buy to let

[Yellowmellow2]

I’ve come into some money and thinking of buying a second property to let. There’s a massive new development nearing completion near me and I’m considering a one bed flat there. Due to complete some time in 2021 but flats still available and can be purchased now, so can benefit from stamp duty holiday (though not additional stamp duty for second property). Also, offering to fully furnish for free so would be instantly ready to rent.

It would certainly be very easy and rentable but I suspect there may be a hefty service charge. Would I be better to get a freehold house which would need more maintenance and furnishing but no service charge,, or a shiner new place?

Do the yield calculations taking into a/c service charge.
Ask local rental agents about demand.
I suspect a new flat, new furniture property would rent quickly but it is all about local demand and supply.

There are some benefits to leasehold with maintenance charges for a new landlord. If the hot water goes, it’s someone else’s job to sort it out, etc, you do not have to be on call in quite the same way.
If you can buy outright, it’s not a bad shout. Awful if you need any sort of mortgage though given the tax treatment of interest payments.

Does service charge include buildings insurance? Also, does it cover eg, repairs to boiler? Mind you, if it’s a brand new property there’d probably be some level of insurance included for repairs?

Buildings insurance will be included. Other things will I suppose depend on the actual block of flats, you’d have to enquire as I am sure it can vary.

Do your research very carefully on new builds

• look into the reputation of the developer, some are very dodgy and properties can have long snag lists.
• read the leasehold agreement VERY carefully, some contain hidden or escalating charges which make your property unsellable in the future
• Is this a building with cladding, if so I wouldn’t touch with a barge poll given the issues experienced by thousands of owners now being unable to sell their homes

Personally, I would always buy something freehold if you can afford it or if leasehold something which has proven to sell (thus less likely to have issues)

Thank you. That’s really useful advice.