Buying a buy to rent flat

[gettingolderbutcooler]

Hello MN!
We are thinking of getting a 2 bed buy to let flat, but are wondering what we haven't considered.

We could possibly buy for 230k.
We could put a deposit down of £50k.
Rental income in the area is about 1300pcm
Mortgage would be (interest only) about £800.

We'd want an estate agent to look after it all for us. I guess they take a proportion of the rent?

What things do we need to factor in?
Missing rental months I guess, insurance.

If you are a landlord and have any useful advice we would appreciate it!
Or if it's a really stupid idea feel free to advise that too!

Thank you xx

I let my houses out unfurnished but do provide most white goods for the kitchen as they are integrated. I don't use an agent but because I have 8 houses I have a very reliable maintenance person who always gives me priority as I give him quite a lot of work. I also use the same gas safe person for all my houses and he is excellent and will even come out over Xmas if a tenant has a boiler failure. I know this because he came out on Xmas Eve once to fit new boiler. I use one reliable electrician who will also prioritise my tenants for me. I also have a back up maintenance person who I use occasionally if I need 2 or 3 jobs doing at once or regular one on holiday. I plan for each property to have something new most years, could be just a washing machine but could be a complete new kitchen or some decking put into a garden or a new fence around a back garden. Then there is painting/refreshing the decor which I rotate around each house, so do half a house X 2 each year if the tenant is agreeable. I run the business on a day to day basis and DH does all the accounts as he is a chartered accountant. I make sure we are compliant with legislation and book all gas/electricity certificates and I also work towards all houses reaching the target of C rating for EPC so getting cavity walls done or loft lagging improved etc. I also handle all contracts including How to Rent, photos as new tenants moving in, gas/electricity readings for new tenants, cleaners booked in-between tenants, inventory and setting up of standing order, plus any inspections. It takes me about 16 hours each month on average but sometimes one property will take longer and you have to be super organised and file everything immediately. I also look out for new properties.

Five yearly for electrics. Five yearly for central heating maintenance and checks.

Do not buy a property with an EPC that is not A (like finding hen's teeth), B (basically a new build) or C (older new builds and majorly upgraded properties).

Legislation is due to ban rentals of D and E in 2028. If you buy a D, they may make you spend thousand to upgrade it as close as you can get it to a C and then give you an exemption certificate - possibly, I am not certain.

Whether it will happen in 2028 or be enforced is another matter.

F and G are already illegal.

I was a LL. I cannot recommend it now at all. Last tenants left the place in an absolute state. Was a beautiful house in a lovely area could not believe anyone could even live the way they did.
Probably broke even overall and then sold!

This is mental, an EPC of C is high and most older owner occupied houses wont be able to meet it, appreciate there is a cost cap but atm LL are selling up in droves & there is no alternative for tenants, my partner has just had a section 21 and there is literally no properties available to rent, i mean none, even the council helpline advised to stay into court action issued!!! as the £350 court costs are cheaper than B&B.

Measures like these (that force LL to sell up) can only be bought in when the Govt has built 100s of 1000s of council houses first.

I think it's smoke and mirrors. I have no faith the current government will ever enforce it. Most of them own skanky old estates which are falling to pieces (apart from their own stately homes).

But, they feel they ought to be seen to be doing things for the peasant.

Enforcement will NEVER be funded.

Even if enforcement is never funded as you suspect, a property with a lower EPC rating will still be harder to sell going forward than it is today.
When I buy my next property I will be very conscious of the EPC rating though I’m not a LL. But I am always conscious of resale potential even as I buy somewhere.
A LL should absolutely take EPCs into account.

Yes maybe but its quite possible that a: Labour will be in power and b; a tenant can use the lack of EPC improvements to challenge and eviction notice, either sect 21 or sect 8 if that is beefed up.

It is completely mental.

Tories are great at bringing out green initiatives and not enforcing them.

They want the general public to believe they are serious about green initiatives and then never support them with funding.

It's just absolute bollocks for the average landlord who could never afford changes to a C.

In the meantime they pay EPC inspectors to lie about ratings.

I say this from experience. Last year we moved out of a house owned by landed gentry who was connected to the queen because it was costing ,£300 a WEEK to heat and we had to abandon the ground floor.

One rule for them. One for everyone else.

I used own an old stone barn conversion, could be damp and freezing, cost a fortune to heat, 2ft thick stone walls and crappy double glazing.

I sold it recently, EPC man came along, my 5mm, 30yo, DG counted the same as 30mm argon filled, LED lighting and loft insulation meant the house got a D.

A complete joke.

rent £17000 per year
take away
estate agency fees £2000
a month void £1400
boiler service cert £80
electrical £100
Maintenance and to cover refurb etc £1500
boiler £300
service charge £1000..
insurance £500
interest £10,000
Income tax around £2-4k.

EPC legislation round the corner.

A house would be a better investment

Our flat has not been a good investment because of high service charges, ground rent, new boiler, repairs, gas checks, etc. After 15 years there hasn’t really been any profit (we tend to rent it out cheaply) and we could only sell it for about £15,000 more than what we paid for it. However, we will obviously get our initial investment money back and the mortgage has reduced but of course there will be CGT 🙄

Capital gains tax!!! This eats quite a lot into profit.