Flats emerge as the top buy to let investment

"'... flats come with a host of advantages for investors, including lower running costs and a smoother process when it comes to renting and managing the property.”

I would suggest the writer has never owned a BTL flat. She certainly has no idea about the challenges.

After 16 years with 2 BTL flats, I can tell her there have been no advantages, only pain.

Flats are leasehold, with the vast majority owned by landlords who use every trick in the book to monetise their investment at leaseholders' expense. Yield is irrelevant when costs exceed rents, there are 'cladding' and ground rent challenges, which make it impossible to sell, and there's little to no capital appreciation to rely on.

I've been saying this for years.
Always get some flats in your portfolio.
Although there is another side to this.
The more expensive house with higher rent may have lower yield, but often it has the same price boiler, roof, door as the flat needs, so the repairs are a lower percentage of the rent.

And what the service charges are.

A nice little maisonette and shared costs isn't too bad unless new roof, damp proof course etc etc is needed.

Flats over 4 floors require a lift = costly maintenance.

Most purpose built, and many conversions are agent managed = higher service charges etc etc.

Capital appreciation is there but you need to own for 20+ years to realise, but then the government get their sticky mitts on a lot of it so ......

If I could have had my time over again I would have bought freehold 2 bedroom townhouses or terraced properties instead of leasehold 2 bedroom flats. Trying to sell a 2 bed flat at the moment to a sitting tenant. Price was agreed inMarch, EWS1 certificate already obtained, tenant has got mortgage but the amount of paperwork/red tape is horrendous. At least still getting the rent paid until the sale goes through.

Reply to the comment left by Dennis Forrest at 06/08/2024 - 13:07
Totally agree. The £20k profit I managed to scrape together from my 2 flats after 10 years was blown away by a single tenant who stopped paying and trashed the flat. I sold that one for zero capital appreciation [at least no CGT!] but the remaining one has proven more challenging. We've just got our EWS1, but the GR is way above £250, making remortgaging or selling a major problem.

Reply to the comment left by NewYorkie at 06/08/2024 - 13:17You could try this - go to the tribunal and apply for a statutory 90 year lease extension at a peppercorn ground rent and when you apply go for a hearing and not a paper decision. Take it to the tribunal yourself if necessary. It will cost the freeholder money as he won't be able to claim the costs for his own solicitor and valuer. You will find he will want to agree a compromise so then you make him sweat a bit and then you say you did really want the peppercorn rent but you will accept a fixed ground rent of £250 per annum and if necessary also be prepared to accept less than a 90 year extension.