Active discussions

Meet the Other Phone. Protection built in.

Meet the Other Phone.
Protection built in.

Buy now

Please or to access all these features

Talk
Property/DIY

Join our Property forum for renovation, DIY, and house selling advice.

Original poster

Buy to let

26 replies

mycatunderstandsme · 28/04/2009 20:00

Just a quick question about offers. DH and myself thinking about buying a flat to let out and the cheap ones seem to be selling quickly.

What would you offer on a flat that is on for £119,00 now [think it's being repossessed] that originally sold for £181,000 in 2004? Zoopla says it's worth £166,000 now.

Estate agent says it will go for asking price but they would say that!?

Thanks!

OP posts:
NorbertDentressangle · 28/04/2009 20:03

Not sure about what you should offer but have you checked if theres actually a need for rented accommodation in your area?

Its just that in a lot of areas the market is saturated which is certainly the case where we are. You see the same flats and houses advertised week after week in the local paper

NorbertDentressangle · 28/04/2009 20:07

Just realised that might have sounded a bit "off" -I'm sure you have done your research. Its just DP and I were talking about the situation around here only the other night. Sorry.

Original poster
mycatunderstandsme · 28/04/2009 20:10

Thanks Norbert-it's a city centre apartment and I think there are a lot around for rent but we would be happy to let it for a little less than the going rate and are also thinking of renting it as a holiday let so we can use it ourselves. We could pay the mortgage if we couldn't let it out but obviously would prefer it if it paid for itself!

OP posts:
JimmyMcNulty · 28/04/2009 20:57

I think you need to do some digging on your own and not rely on the EA. In some cities (Leeds, Manchester etc) city-centre flats have fallen 70% in value, so in that scenario £119k wouldn't look like such a bargain after all. Zoopla is too much of a blunt tool for the kind of info you are after. Have you checked what similar flats have actually sold for (ie. land registry)?

Sorrento · 28/04/2009 22:14

Much as I depise buy to let, city centre flats will fall the most and recover the slowest, hang on if you're determined to have one you'll pick it up or one like it for £60k in 18 months.
Do some research into the tax changes too, BTL's are going to be the new government cash cow.

ThingOne · 28/04/2009 22:25

Where is it? At least vaguely.

wombleprincess · 29/04/2009 12:56

i doubt very very much btl will be new cash cow.

Regardless of whether or not you can pay the mortgage now (at low interest rates) you should at least verify the supply and demand for rental property in the area incase there comes a time when you cant afford the mortgage, i would say, to be safe.

very much depends on which city, but i am guessing its not london so i personally would wait a while.

Original poster
mycatunderstandsme · 29/04/2009 17:28

Thanks for all the advice, we have been thinking about this for years but it's difficult to know when it's the right time to buy and we are ultra cautious so never seem to make a decision about anything! We've paid off the mortgage on our house and don't want to move so we're looking towards an investment property as part of our pension planning.
I think we'll either wait or put in a very low offer-there do seem to be plenty of flats about[ although not as nice or well located as this one.]

OP posts:
Sorrento · 29/04/2009 17:37

I'd buy shares, the stock market out performs property historically and the shares don't call you at three am about a boiler or refuse to pay their rent and trash your interiors.

Original poster
mycatunderstandsme · 29/04/2009 18:43

Any tips Sorrento! We hate shares-we have invested a little in them but I had a pep [which became an Isa] for around 12 years before it went up to more than I'd paid in -now it's less again!!

OP posts:
FiveGoMadInDorset · 29/04/2009 18:47

We have a Buy To Let flat. Ours is in Bournemouth which has a University, a financial centre and a hospital, flat is in the middle of all 3 and has always been tenented. Thinking of selling if you are interested.

StarPlayer · 29/04/2009 18:51

We have a buy to let flat. As well as the mortgage we also have to pay the ground rent and service charges.

Ours is an old flat circa 1970s so the service charge ground rent is only £60 a month. How much for the flat you're interested in? Plus if it went up yearly, could you afford it / want to afford it?

Original poster
mycatunderstandsme · 29/04/2009 19:32

Service charge around 800-1000/year [still to be confirmed]. As we don't have a mortgage on our house to pay and are both working it's extremely unlikely that we wouldn't be able to afford the mortgage/charges but yes we have thought about it and have been looking for a flat where the charges aren't too high-some are at least £2000. We're in the Northwest-looking to buy in Liverpool so a bit far from Bournemouth!
This has been really helpful, I think we need to wait longer though to see what's happening to prices. As I said before we might be able to let it for weekend breaks if there is enough demand and then we'd use it ourselves sometimes-if possible I'd like to enjoy owning it as well as having it as an investment.

OP posts:
StarPlayer · 29/04/2009 19:52

I have to say, If I could do it all again, I would be a two bed house instead of a flat, but that's just me. It was a right bugger when I heard the neighbours in the flat above playing their music loud the other day. I couldn't stand that noise on top of my head if I had lived there.

Good luck with whatever you decide to do.

StarPlayer · 29/04/2009 19:53

'I would buy' not 'I would be'

Original poster
mycatunderstandsme · 29/04/2009 20:06

Hmm that's interesting.We had thought about a student let[terrace] but because we were thinking about using it as well decided we wanted a city centre place.It's a difficult decision to make which is why we haven't made it yet!!

OP posts:
StarPlayer · 29/04/2009 20:15

The thing is - I resent paying the ground rent/ service charges each month; it's just dead money. Plus buildings insurance on a 2 bed house in the same area as the flat would surely be much cheaper than £60 a month - probably about £10-£15.

Original poster
mycatunderstandsme · 29/04/2009 20:22

There aren't any houses in the area we're looking [business district]so if we wanted a house we'd have to buy further out so it would probably end up being a student let which might not be a bad thing.I know what you mean about service charge/ground rent especially if the flat isn't let.

OP posts:
lalalonglegs · 29/04/2009 20:42

Liverpool always had a very poorly-performing property market until it was announced that it would be 2008 City of Culture. That caused a mini-boom but, with no other prospects on the horizons afaik, it is going to stay in the doldrums for a good long while, I would think because it hasn't got the most reliable economy. I think there are a lot of untenanted city centre apartments and there are much better places to look at if you are thinking of investing.

Sorrento · 29/04/2009 22:14

Liverpool, Leeds and Birmingham are an absolutely disaster at the moment.
Do not rely on the student market, students will stay at home when things are tight or if they cannot see a job at the end of their course they won't go to Uni at all.
Liverpool has hundreds of purpose built student accommodation by the Womens hospital too.
Hold on to your money, put it in a cash ISA or even a managed fund, I am in theory loosing money on mine but actually I am buying more shares for less money that's the secrete with shares, if you have £10k you don't buy £10k's worth of funds or shares you buy £1k each month because sometimes the price is higher or lower, instead of trying to guess the right time you spread bet accross the year (or twenty in my case).
I really really believe you will be able to buy two flats for the price of one in 12-18 months time.
We've lost 20% on our 4 bed family home in desirable area with excellent schools etc, you can seriously see city centre flats minus the students and city workers being given away.

Original poster
mycatunderstandsme · 30/04/2009 17:22

Thanks for all your great advice, we're going to wait a while.....

OP posts:
StarPlayer · 01/05/2009 17:07

Anyway - they said on Sky news yesterday that house prices are still falling.

brettgirl2 · 02/05/2009 17:57

I think that in terms of buy to let the current aim with prices dropping must be to buy somewhere where the yield will cover a repayment mortgage. Therefore you will own it in 25 years regardless of property prices.

Sorrento · 02/05/2009 19:17

You can get both zero return and negative equity at the moment, plus the hassle of maintenance and trying to evict, what's not to love.

news.bbc.co.uk/1/hi/business/8029629.stm

pearlsbeforeswine · 02/05/2009 19:22

We let our house out for a few months and it was one of my worst life decisions that ended up in police involvement:

Our tenanat never paid any rent and yet we had to wait for months and mon ths before starting eviction.
She trashed our house and i mean trashed .
She stole things from the house ( it was part furnished)
She threatened myself, my neighbours

It my depend on the area but our local rental market was flooded. I have friends who are renting as are we at the moment and we call the shots, dictating the rent etc.