by sconesplease » Fri May 24, 2024 4:55 pm
If you go ahead and buy a flat, I would look carefully at the numbers, taking into account property management fees (unless you self manage) insurance and ongoing repairs and maintenance. Keeping in mind, that if and when the tenants move out, in my experience there will be more maintenance needed that was not noticed at the time inspections were undertaken. I would also think about what type of tenant the flat will appeal to, how close is it to the tube, train and supermarket, vacant periods in-between lettings etc where you won't be earning rent, and the tax you will pay on rent received. And then think about the re sale process, who would the flat appeal to, is it leasehold or freehold, any vacant period while waiting for the sale to go through etc, stamp duty. Is the flat going to go up on value, could it go down? Who are the neighbours? are the neighbours renting also? I recommend finding an excellent accountant.
I don't want to put you off as buying a investment property can be great but we have a couple and over the last few years and it has amazes me, even with good tenants if you want to keep it in tip top condition, how much work, expense and sometimes stress they have been. We had a great tenant living in our three bed house, he kept the house immaculate and kept us up to date with any issues that needed attention. When he moved out, we spent 3.5 days, working on the house and spent £4,000 on a few rather small things that quickly added up. We saved on property management fee's by self managing, but the downside of not having a property manager is that you may develop a relationship with the tenant and it becomes harder (for us!) to put the rent up because you feel like you have a friendship. We have had lots of tenants and never had any serious issue but we did have one couple of caused a fire in the kitchen, they had taken the batteries out of the fire alarm, luckily they asked to break their contract and move out. We have also had property managers organise work on the house (with a 10% additional charge) and we have noticed later down the track that the work hasn't been completed to a high standard, and in once instance they hadn't finished the work but had charged us for it. Property managers also seem to come and go, so who you may be dealing with is likely to change and they won't have all the history of what has happened prior (they will have the notes but they may be managing 80 plus properties on their own)
Best of luck with what you decide on, this is only my experience and I'm sure others will have had more positive experiences but I am very much over property investment at the minute. Although in saying that, Manchester seems to be very good value!! We have rented out our family homes so it's a bit more emotional than if you are buying solely for an investment.
If you go ahead and buy a flat, I would look carefully at the numbers, taking into account property management fees (unless you self manage) insurance and ongoing repairs and maintenance. Keeping in mind, that if and when the tenants move out, in my experience there will be more maintenance needed that was not noticed at the time inspections were undertaken. I would also think about what type of tenant the flat will appeal to, how close is it to the tube, train and supermarket, vacant periods in-between lettings etc where you won't be earning rent, and the tax you will pay on rent received. And then think about the re sale process, who would the flat appeal to, is it leasehold or freehold, any vacant period while waiting for the sale to go through etc, stamp duty. Is the flat going to go up on value, could it go down? Who are the neighbours? are the neighbours renting also? I recommend finding an excellent accountant.
I don't want to put you off as buying a investment property can be great but we have a couple and over the last few years and it has amazes me, even with good tenants if you want to keep it in tip top condition, how much work, expense and sometimes stress they have been. We had a great tenant living in our three bed house, he kept the house immaculate and kept us up to date with any issues that needed attention. When he moved out, we spent 3.5 days, working on the house and spent £4,000 on a few rather small things that quickly added up. We saved on property management fee's by self managing, but the downside of not having a property manager is that you may develop a relationship with the tenant and it becomes harder (for us!) to put the rent up because you feel like you have a friendship. We have had lots of tenants and never had any serious issue but we did have one couple of caused a fire in the kitchen, they had taken the batteries out of the fire alarm, luckily they asked to break their contract and move out. We have also had property managers organise work on the house (with a 10% additional charge) and we have noticed later down the track that the work hasn't been completed to a high standard, and in once instance they hadn't finished the work but had charged us for it. Property managers also seem to come and go, so who you may be dealing with is likely to change and they won't have all the history of what has happened prior (they will have the notes but they may be managing 80 plus properties on their own)
Best of luck with what you decide on, this is only my experience and I'm sure others will have had more positive experiences but I am very much over property investment at the minute. Although in saying that, Manchester seems to be very good value!! We have rented out our family homes so it's a bit more emotional than if you are buying solely for an investment.