Jump to content

What things to consider when purchasing a buy to let property?


geek84

Recommended Posts

Hi Folks

What things do I need to consider when purchasing a buy to let property? i.e. condition of property, is it ‘rentable’ i.e. being close to establishments such a hospital (where there would be a good supply of student doctors/ nurses, and a university, again there would be a good supply students who would want to live in rented accommodation.

Thanks in advance for your responses.

Link to comment
Share on other sites

Yes condition is vital if you want top rents and bums on seats soon. Money spent on re-furb could be dead money.

Think about who is going to rent the property and who will it appeal to.

A lot of us don't do students or DHS tenants so who is left in the area you are considering. Hospital - yes - a favourite with Homes Under the Hammer or in my area I would now be looking at 2 groups - the fast disappearing young professionals ( they have a lot of debt I find) or the 'retired suddenly singles'.

In the last 2 years I have let to 3 RSS's who have let their offspring have their house and rented small houses or flats from me. This could be a new trend.

Link to comment
Share on other sites

Yes condition is vital if you want top rents and bums on seats soon

Thats not necessarily so.. Some of the best returns are to be made from cheaper 'run down' property in poorer areas.

You'll get great rental returns but.....the tenants are likely to be a big problem, you'll need to know how to deal with people on benefits (& the local council), you will be unlikely to see any capital increase in value, you will struggle to sell the property etc etc

Link to comment
Share on other sites

Hi Folks

Many thanks or your replies. There are a few brand new homes just built near where I live. Do you think it would be a good idea to purchase one of them to let out.

Obviously because they are newly built, there would not be much repairs & maintenance to do.

Could I haggle over the price for the newly built ones?

Thank You.

Link to comment
Share on other sites

Brand new homes seem to have a premium , say around 10% or so around here, just like driving a new car off the forecourt, it depreciates as soon as you have the keys. I would definitely negotiaite hard when it comes to new build.

Also, from your postings on other sites, dont waste your time trawling banks and the high street looking for mortgage brokers. You need to find a mortgage broker who Walks the Talk - you are unlikely to find that on the High Street. If you don't want to speak with me, find someone else who is an experienced landlord and a Mortgage broker.

The governments Funding for Lending Scheme is filtering down through to some good Buy to let deals currently some with up to £500 cashbacks and only 0.5% fees.

Link to comment
Share on other sites

Hi Geezah

Thanks for your reply.

In your reply stating The governments Funding for Lending Scheme is filtering down through to some good Buy to let deals currently some with up to £500 cashbacks and only 0.5% fees. Where can I find these deals?

Can you please expand on If you don't want to speak with me ...

Thank U

Link to comment
Share on other sites

Hi Geek,

what I meant is that you are asking questions where there is a wealth of information available to you from experienced people in both mortgage broking and landlording and you are absolutely doing the right thing. However, the devil is absolutely in the detail and the only way to help you further is if you speak to someone. I have invited you to contact me privately as an open forum is not the place to discuss your personal details. I haven't heard from you so i assume you don't want to speak with me and thats absolutely fine but you do need to speak with some one who is a landlord and a broker as he/she will be able to give you the story from both sides of the fence. Check my profile and you will find my website, you may be able to glean some information from there.

With respect to the deals, I'm a mortgage broker, I earn my money from arranging mortgages for people, I'm not going to go into details on an open forum, clearly I want people to come to me. I've told you what's available, if you want to find out more, talk to me.

Link to comment
Share on other sites

Hi Folks

I have selected a but to let property and the agent says they have received some offers but not allowed to disclose the amounts.

Are estate agents allowed to tell you what offers have already been made?

Thanks

No.

Link to comment
Share on other sites

Surely it would depend on who is selling the property and what arrrangements / instructions have been agreed between them & the selling agents.

1. In the past when I've made offers for repossessions through estate agents they have never told me what the other offers are UNLESS they have already received the asking price. That then leaves you free to offer above the asking price.

2. Sealed bids are never disclosed until they are all opened and the winner notified.

Agents try to get the highest price for the seller. If you have offered below the asking price and there have been other offers they have nothing to gain by telling you what they are........and if they aren't saying then they are probaby higher.

Link to comment
Share on other sites

I have bought loads of properties under the conditions of best offer's etc. and I have never been told who has put in the highest offer because apparently under some code of selling practice an EA could leave themselves wide open to legal action by a disgruntled bidder unhappy about the outcome.

This scenario happened to me back in 1991 when I 'sealed bidded' a young couple out of winning a house repossession by £500. They were so unhappy about the outcome they took their story to the local rag would you believe. I wasn't involved at all in the arguments that followed...... and the EA had followed the correct procedure in the house disposal process even back then on behalf of the mortgage company.

I'm not saying that a nod and wink doesn't happen because I know it does. :rolleyes:

Any EA's wish to comment?

Link to comment
Share on other sites

Of course dodgy practices still go on in the estate agency world but in my view it is no where near as bad as it has been in the past. I was only told the other week about the highest sealed bid being leaked by the estate agent to someone/friend for a 2k back hander. To be fair it did happen about 8 years ago though.

I have a membef of staff who is a stickler for the rules who is for ever telling venders and buyers she cant disclose this or that. I also get my ear bent by her for being a bit slow in arranging the the odd EPC.

Link to comment
Share on other sites

  • 2 weeks later...

Here's something that ALL landlord's should be prepared for.

My question is why did it take nearly a year to get rid of the Scumbag?

http://www.dailymail.co.uk/news/article-2306170/Landlord-left-clear-house-horrors-benefits-mother-children-leave-50-bags-rubbish.html

Link to comment
Share on other sites

  • 4 months later...

Hi Folks

The property which I am in the process of purchasing for purposes of letting out is a new build and almost completed.

I will be inspecting the property before handing over the money. Could someone be kind enough to tell me what things I need to ask/look out for when I am inspecting the new build, apart from making sure everything works ok.

Thank You

Link to comment
Share on other sites

Usually you give the money to your legal representitive and they arrange for the payment. I've NEVER heard of a buyer actually handing over the purchase monies.

Your legal representitive will have details of everything that is contracturally included in the purchase. It would seem sensible to ensure that you get everything that you think you should be getting.

New builds often need some work before they are suitable for letting eg curtain poles/ tracks , light fittings etc. If you can't do these tasks yourself, check if the builder has a local handyman who can.

Large fees are usually payable by the first occupier for telephone/ broadband landline.

Other areas worth looking at are

* sufficient quantities of keys for each lock.

* detailed instuctions/ books on installations such as heating & hot water etc.

* are the finishes to an acceptable standard.

* have they removed all their building materials, tools, rubbish etc.

* are the garden acceptable.

* are parking bays accessable.

Link to comment
Share on other sites

I have been in the building business quite a long time and I will always remember what a seasoned building surveyor once said to me many years ago and that was "Why don't purchaser's have a survey done on a new property" ?

Of course it is easy to scoff at such at a remark as you are buying a new property with all the guarantees aren't you?

Think about it for a minute. How many TV programs have you seen or how many reports have you read about buyer's of new property entering a new nightmare of what they have just bought eh! and that is just the ones you hear about.

In my time of fitting new fireplaces in new builds with my Son I have seen quite a few things that have not been right and I have often wondered.... "I wonder when the new owner will pick-up on that then".

So for me and in the unlikely event of me ever buying a new build property I can confidently inform you that I will have a building survey carried out prior to moving in.

Link to comment
Share on other sites

For a new build shouldn't you agree a percent retension of payment for a period of initial occupation, during which you compile a 'snagging list' of faults found needing to be rectified before final payment?

It's impossible to check everything in one inspection visit before occupation, and in my experience settlement will occur over some months, with cracked plaster, binding doors, etc. And probably more when heating starts to operate....

Link to comment
Share on other sites

So for me and in the unlikely event of me ever buying a new build property I can confidently inform you that I will have a building survey carried out prior to moving in.

There are a few different types of surveys and I assume you are not suggesting a 'homebuyers report' ?. A full structural survey can be very expensive......many £000's. New property does normally come with extensive insurance backed guarantees such as NHBC warranty and thats probably why buyers don't consider a survey worthwhile.

For a new build shouldn't you agree a percent retension of payment for a period of initial occupation, during which you compile a 'snagging list' of faults found needing to be rectified before final payment?

If only.

That kind of arrangement is more often used if you commission a new build or have an extension/ addition to an existing building. Buying from a developer usually means you pay the full purchase price on completion.

Link to comment
Share on other sites

So for me and in the unlikely event of me ever buying a new build property I can confidently inform you that I will have a building survey carried out prior to moving in.

There are a few different types of surveys and I assume you are not suggesting a 'homebuyers report' ?. A full structural survey can be very expensive......many £000's. New property does normally come with extensive insurance backed guarantees such as NHBC warranty and thats probably why buyers don't consider a survey worthwhile.

Not a full structural survey but something in between which you would instruct your surveyor to look at for say for obvious defects like roof & tile construction or the quality of cement pointing in the brick work.

With no floor coverings and furniture and bare-bones house it does make the job a lot easier.

The NHBC is all very well but what a hassle if you have to call upon it. It can take months if not years to get problems sorted out and don't fiorget the NHBC is funded by house builders for their own interests. I have seen enough of the NHBC process for remedial work guarantee to make me very wary of putting my complete trust in how they resolve disputes.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

×
×
  • Create New...