Any property buffs or landlords around? I have lots of random questions............

[sweetheart]

Am looking into a project at the moment and would be grateful for anyone with lots of experience in buying / selling / renting houses.

First off:-

How much contingency should you leave for solicitors fees, land reg fee etc etc when buying a:-
1 Bed - approx £135,000
2 bed - approx £195,000
3 bed - approx £300,000
4 bed - approx £400,000

also anyone with a portfolio of houses - which size rents the best?

I let 2 properties - one was my flat until I moved in with DH and I currently manage one for a friend who has gone back to the States. I found this book very useful for straight forward practical advice. It may answer some of your questions.

With regards to which properties let well, it really depends on the area and what you feel comfortable dealing with. As others have said research, research, research is the key. Know your area, know the jobs situation, schools, transport, etc. Talk to anyone locally that has an opinion (not hard ) and add it to the pot. Then go with what you feel comfortable with.

Constance is right. Katie I think you are blaming BTL for the homeless crisis. I don't think that's quite right. Well I'll go further and say it's quite wrong. We could go back to the "right to buy" and all of that. But "right to buy" fuelled significant income growth, investment, consumer spending and raising of living standards in areas.

I can't pretend to understand it. I hated "right to buy" at the time. I'm not sure any more.

Anyway good night.

I know a lot of 30 year olds living at home and that situation will get worse too. As graduates return home with debt and cannot afford to buy or rent.
The social impact of investing in properties is a real problem and needs addressing and I have no doubt it will be as the governments need for revenue increases.

OP please don't worry about the moralists on here, these are people who probably claim funeral directors should stop making money out of people's unhappiness...

If you are offering to buy houses from people who are struggling to sell and they accept your offer, then you are helping them. No question, And by buying now you are helping to keep the market moving, whcih has got to be a good thing for everyone trying to move!

Back to your orginal questions (and I admit I haven't read the entire thread because the morals got tedious). I would allow £1500 for solicitors fees (before adding stamp duty). It should be a little less on the cheaper properties, but I think its a good average.

As to what would rent best, it'll vary hugely between areas. One bed executive pads will be easy to let in cities, detached places with nice gardens in villages! But then I'm biased, I have been trying to sell the latter, and am thinking of renting it out instead (unless you want to buy it from me )

Agree with Lady Constance. We sold our BTLs end of last year when this crash was about to happen - will buy again next year when prices bottom out. We go for 2 bed, first floor (more secure for tenants), purpose build not conversions (better sound insulation) would not touch HMOs, avoid students and Housing Benefits, do not let to LA however tempting it appears. Be organised about tax, gas checks and contracts - make sure yours is watertight. We do not use agents - they are pretty useless - just desperate to let to anyone, however dodgy, and no help if there are problems with the tenant. VET your tenant! We let to local teachers, two sharing, at below market rent, simply advertising in local school newsletters. They have excellent references, will have been CRB checked, and we have never had voids. We get recommended from one tenant to the next as we have never had to withold any deposit (we accept fair wear and tear and will NOT quibble over a broken blind or chipped paint!)
Expect boilers to break down, so have them serviced when you do the annual gas check, and advise tenants what to do in a plumbing emergency situation. I give them a list of plumbers I know, and if they have a problem, they ring them,arrange the call-out etc, get a VAT recipt and I reimburse them immediately. Show them where to turn off the water! and tell 'em to do that if they go away on hols.

Thanks this is really useful! I agree that it's not immoral - for instance rather than leaving the cash in a bank I am planning on starting a business which will provide work for several people so thats my good deed.

Could do with a little more input if anyone wouldn't mind....

Please could you tell me what HMO's and LA's are?

Does the rental of your places normally cover just the rent of would you include bills to? Are tennants usually responsible for the bills themselves?

The area I am looking at currently is quite an affluent area, school are brilliant and we are about an hour commute outside of London. I guess the main market would be young professionals or families that commute to London but want to be near the countryside and have access to good schools.

Also how often would you redecorate or refurbish the properties? I was basing my figures on a lick of pain every 2 years and a remodel of kitchen / bathroom every 6 years or so - is that too much / not enough?

Do you think it would be realistic to base my figures on more than a 50% rental to begin with? Perhaps 70 or 80%?

Also what other costs would you expect to incurr?
Purchase costs - price of house, stamp duty, land registry, solicitors fee, other expenses (say up to 1% of purchase price)
Maintenance costs - redecoration / remodelling, boiler servicing, insallation . roofing repairs etc
Admin costs - adverts, rental contracts, collating maintenance issues, maintaining service records, collecting rent etc

Is there anything major I have missed?

Thanks for the help, it's much appreciated.

sweetheart - BTL is the ultimate rent-seeking activity, as it has been generally done in recent years it does not contribute anything useful to society and as we approach recession be warned that people are becoming more keenly aware of the damage it has done.

MrsGofG has given a good explanation as to how you can ethically and responsibly run a business in BTL. But you need to do more research, and proper research as to landlords' obligations. Not just for moral reasons but so you know how to cover yourselves legally as well.

HMO - is housing with multiple occupancy
LA - is local authority

tennants are usually responsible for all bills including council tax, but it depends on how you approach your business

maintaining decor will depend on the market you rent to - but even if high end I think it would be unusual to remodel the kitchen/bathroom so often.
You will have to factor in the cost of fairly regular repairs and maintenance, big things like the roof or boiler, stuff like the washing machine/shower/cooker/fridge all with built in obsolesence

Your void rate will depend on your market, taking MrsGofG's approach you will have barely any voids. For other markets, e.g. shorter term rentals or executive lets you will have voids. 50% would indicate you were doing something wrong.

Upwind, what a ridiculous thing to say -- BTL does not contribute anything useful to society.

Bleurgh - when you buy up the homes of would be first time buyers and rent them back - you are not doing your tenants a favour. You have simply reduced their security of tenure. You have also ensured that they have less of a stake in their community.

Business does not necessarily have to be about contributing to society but it sounds like that is important to the OP. She could instead use her money to invest in more productive activities that tend to benefit us all. It would also be likely to be a better investment at this time than BTL - homegrown businesses are starved of funding just now and property prices have just started to crash.

LadyConstance addressed a lot of your points earlier.

Bleurgh - the rise of BTL was not because of that minority who always wanted to rent and do not need security of tenure. It was because of those who became priced out because of BTL

Upwind you have hit the nail on the head

You're wasting your breath and they are wasting their money. let them get on with it and snigger to yourself when they come on complaining they have become social landlords subisidising their tenants rent and lifestyles and can't get them out when they trash the property/don't pay rent.

golly what a horrible post katie

Sweetheart, rights or wrongs aside, this is a MAD time to buy a house, the market is in freefall. Wait.

bleurgh - for years people have gloated as the cost of housing trebled, despite the misery it spread, now those people are shamefaced we are entitled to snigger at them

WWW - I actually think that for someone in the OP's position, where she would be investing for the long term, with no need for a mortgage, property is not a bad idea. Without any leverage she is much less exposed to price drops (and rises), her tenants are not vulnerable to sudden forced reposession, and let's face it - many alternatives to property are looking shaky right now.

OP - I hope you get some good professional financial advice about building an investment portfolio.

Upwind - I agree that the OP can afford to buy at the moment but, as it is an investment, would be mad to do it while prices are falling away so fast. Spend a year researching the area, the rents achievable and what sort of properties rent best and the OP will probably find her money goes a lot further and she is a lot better able to deal with renting out properties. She's in a brilliant position not to be in any hurry at all.

Thanks for the comments that were constructive - Katie, yours were not and infact quite mean. I hope your proud of yourself on the moral high ground

I take on board all the decent comments and wanted to say thanks for your help / input. It's been very valuable.

Mean ? fecking hilarious, mean is locking a whole generation out of home ownership, delaying them starting families etc, who are your kids going to marry ?
Hope you realise the long term impact of your actions before it's too late.

what on earth does home ownership have to do with having babies. I had my first child without owning a home. The two are not mutually exclusive you know!

For most normal people it's extremely important to be settled in your own home, with new tenancy laws meaning that you have no security, people are putting off having children until they can afford their own homes, which when you consider that this generation will also be the first to have £15k plus of student debt, really you aren't offering a public service by snapping up all the houses to rent back to people at a premium.
You clearly either a) live in a bubble b) don't give a toss c) have more money than sense.
But as I said before if you want to buy property I sincerely hope you buy from somebody who makes a massive profit out of you.