We're thinking of buying a 1 bed, do it up for investment and rent it out.

[cheesebubble]

www.rightmove.co.uk/property-for-sale/property-100956731.html

We are in no way experienced in the field but would like to invest some of the money we have saved. It's not crazy amounts we have saved, so this would be an option not far from where we live.

• New kitchen
• New Carpets/ Laminate flooring
• New bathroom tiles, floors and cupboards

Please be brutally honest as I need to know!

It seems to be a retirement propertyso would your potential market be more limited. And seems to be a requirement that all residents are over pensionable age. It would make a lovely flat but maybe make further enquiries before committing

You may not be allowed to rent them and the service charges are likely to be very high.

lurk on landlordzone for a while and see what can go wrong.

there is a rental property shortage because lots of smaller landlords are selling up. Ask yourself why...

I wouldn’t.
One place we considered in a local seaside resort with a good market for this type of property insisted that all potential tenants were vetted and voted on for approval

A lot of smaller landlords are selling up now. Tax changes, legislation requirements, difficult to evict problem tenants, the list goes on. Look into it properly and work out the returns after management fees (if applicable), service charges, tax, repairs, gas and electric checks, insurances, etc etc. Your money may be better off invested in stocks and shares

I think the buy to let boat has sailed. Too much hassle, too many negatives and even if everything goes well, not enough return. Tax implications etc etc.

We have a rental property and have to have a high income to mortgage ration just to break even. Think about the tax bills, the maintenance costs, gaps between tenants, cost of electric and gas safety works and checks, insurance costs, any management fees etc it’s a fairly high cost activity!

By the time you’ve paid the service charge (generally assume around £100 a month for a small flat, but can be lower or much higher), insurance, managing fees, paid income tax, factored in putting money aside for repairs and so on, there’s really not a lot of profit to be made - and that’s before you think about void periods and what you’d do if the tenant stopped paying.

If you’re cash buyers and won’t be bound by a lender’s terms then one of the remaining vaguely profitable ways of landlording is the one I use: I lease to the council (housing associations and private companies are also in the market) on a five-year agreement and they in turn use it as temporary accommodation for households on their housing waiting list. In my case, the flats are already in a council block so no neighbour objections; any antisocial behaviour the tenants cause is the council’s responsibility, as are damage and repairs. They pay me a lower than market rent, but it’s guaranteed and I don’t have the hassle of chasing arrears.

This looks like an assisted living/retirement facility.
I’d wager a large sum that the head lease would prevent you from being able to let this out.

It's a retirement village. Appeal to only a certain aged person. From what I understand prices don't go up much either so not a great long term investment.

It's a leasehold retirement flat in a retirement complex with assisted living. You won't be able to let this out. In fact you will no doubt be age restricted to buy it - over 60s etc.

I’m an accidental landlord after my property went into negative equity. I’m a good landlord - all by the box, any problems sorted ASAP and I hate it. It costs me more money than the rent every month and I feel the weight of responsibility for it. But now, although it’s out of negative equity, I cannot afford to sell it because I can’t afford for it to be vacant for vacant possession to sell.

Even without the restrictions, it would probably need more than superficial cosmetic work doing.

We will shortly be selling a retirement property like this that belonged to my now dead fil. Believe me, if we could have kept it and let it out, we would, but it's impossible as the freeholders don't allow it. Also, it will probably sell at a small loss. The annual charge is around £3k too. Even if it were possible, your target market (over 60s) are very unlikely to be renters anyway - most people downsize to these places from owned family homes.
Did you miss what type of property it is? Total non starter.

We are experienced landlords and wouldn’t touch that. As others have said, anywhere with service and maintenance charges is a definite no. You have no control over these charges and they could be raised each year, you are absolutely at the mercy of the freeholders, which would probably wipe out what little profit you might make.

Thanks everyone, this makes a lot of sense and it seems investing that a lot of smaller landlords are selling up.

First of all, I was not aware that a retirement property cannot be rented out but does make sense I suppose, the negatives 100% outweigh the positives.

We'll see how we can invest money elsewhere. I'm not clued on at all, will spend some time researching.

Student properties are still profitable if in good location - and you can choose older students. But much better to get a 2-bed for two sharers.

You could also let it out as Airbnb when students aer off in the summer.

@Brightbulbs

A lot of smaller landlords are selling up now. Tax changes, legislation requirements, difficult to evict problem tenants, the list goes on. Look into it properly and work out the returns after management fees (if applicable), service charges, tax, repairs, gas and electric checks, insurances, etc etc. Your money may be better off invested in stocks and shares

Does anyone think that there is a connection between this, which I think changed Nov 2020? and the recent announcement of 5% deposits?

As in more properties may be released onto the market at the same time as first time buyers wanting properties to buy?

@ComtesseDeSpair

By the time you’ve paid the service charge (generally assume around £100 a month for a small flat, but can be lower or much higher), insurance, managing fees, paid income tax, factored in putting money aside for repairs and so on, there’s really not a lot of profit to be made - and that’s before you think about void periods and what you’d do if the tenant stopped paying.

If you’re cash buyers and won’t be bound by a lender’s terms then one of the remaining vaguely profitable ways of landlording is the one I use: I lease to the council (housing associations and private companies are also in the market) on a five-year agreement and they in turn use it as temporary accommodation for households on their housing waiting list. In my case, the flats are already in a council block so no neighbour objections; any antisocial behaviour the tenants cause is the council’s responsibility, as are damage and repairs. They pay me a lower than market rent, but it’s guaranteed and I don’t have the hassle of chasing arrears.

I know this is an old post but my god the callous way in which you described that - I lived in a council block for years and the flat above me owned by a selfish fuckwit landlord doing the exact same thing as you and as a result destroyed my life with anti social tenants. Council blame the property owner, property owner is completely absent, property management company blame council, and repeat until all decent people living in the block have been mentally destroyed.

I hope your flat gets absolutely trashed and you lose hundreds of thousands of pounds from your 'easy money maker'. that is all

I think the last post was a bit harsh and projecting. Whilst I sympathise greatly with your situation having grown up on a council estate myself and experienced similar, I think she was only trying to explain what he/she does. I don’t wish I’ll on those who possibly I may be more fortunate than me.