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  1. #1

    First Time Landlord-Have I made a mistake already ?

    Reading this thread is certainly a sobering experience for a would be First Time BTL landlord !

    Here is my story with most of it still to be written…….

    I am about to purchase a one bed apartment in a nice little estate with a lake view. The asking price was 55000 but the vendor has accepted 50000. Selling prices last year for the estate was around 53500 whilst in 2008 they were averaging 75- 80k (I can always dream).

    I’m not really looking at capital growth as I would prefer steady rental income into my retirement. I am 44 and would like the property to have paid for itself by the time I approach retirement. I have some friends who rent an apartment on one of the low rise blocks on the estate and they pay 400 per month. I have heard from other people that the rent payable can vary between 375 and 400-does this leave a gross yield of 9.6% or am I miscalculating something ?

    Anyway, we are fortunate enough to be in a position to pay for the property in cash and still have some cash reserves left over, however, reading some of the many comments on this board has made me wonder if paying cash for the property is considered a bad move as many people seem to recommend getting a mortgage instead. Can anyone advise ?

    Also, the general tone of advice given out seems to be to avoid getting into the BTL market as the returns are not what they used to be and it's also a lot of hassle. Are things really that bad ?

  2. #2
    A few pointers may be of help:-
    1. Appoint a good agent to manage the property - they will get references deposits etc - Yes they they will charge fees [ around 15%] but are worth the cost as they will handle any aggravation from the tenant.
    2. Avoid DSS tenants - they tend to have a high rate of default.
    3. Consider adding void insurance to any insurance you take out on the property so that you are not left out of pocket if your tenant leaves unexpectedly.
    4. Your money earns little interest at present and done properly your property should earn a good rate of return.
    5. Mortgages are on the way up - I would advise not to take on debt if you can avoid it - maximise your returns.
    6. Get a good tenant and you will have no problems.
    Hope this helps.

  3. #3
    An agent is already on our list of things to do. They seem to charge 10% around our neck of the woods plus a 200 "set up fee". I don't know if that is the norm ????

    DSS tenants are a no go area to us anyway. I don't want to deal with them and the area our apartment is in would not be "receptive" to that either.

    We are paying for the property in cash. I have heard others say this might be a bad idea as it's difficult to find leverage if you want to expand to more than one BTL property. However, as things stand, we would be happy with one apartment paying for itself in about 12-14 years.

  4. #4
    I have been in the letting game for many years. It has been profitable and enjoyable ( mostly!)
    My personal views are:
    1) Good property = good tenants = no aggro
    2) If at all possible manage it yourself. I only ever use agents to find tenants and I don't pay them a full months rent fro doing so. Agents are generally average and a personal relationship is better.
    3) Do not overcharge. Tenants on a fair rent take more care of the property
    4) Visit the property as often as possible and keep it in tip top condition.
    Good luck

  5. #5
    Always try to get good tenants, and play fair with them. If using managing agents, believe those who use them, not the managing agents when they are promoting themselves to you.

    Allow a realistic sum each year for repairs and maintenance (which is probably a higher amount than you thought), and keep your tenants sweet by making sure that property defects are swiftly dealt with, so that the tenants think you're a responsible and good landlord who is supportive. Then a good tenant will be more ready to treat the property as if it was theirs, not as a property belonging to a faceless and unhelpful profiteer.


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