HELP! My 1st buy-to-let?

Hi Steve

Only you can decide whether you have found yourself a good deal or not.

To help you to answer your own question though please see these useful tools:-

Property Research Tool - http://www.property118.com/property-search-tool/

Landlords Calculator - http://www.property118.com/calculating-rental-yields-and-returns/

Buy to Let Mortgage Sourcing Tool - http://www.property118.com/buy-to-let-mortgage-calculator-2/

I also recommend you to read this series of articles >>> http://www.property118.com/how-to-become-a-respected-profitable-landlord/60765/
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Hi Steve,

As Mark says, only you can decide whether its a good investment or not.

Without seeing the property and investing time in due diligence I would not be willing to comment.

One thing I would say is that if the tenants are LHA, are you willing to deal with the potential hassle that potentially might bring?

Most novice landlords starting out are recommended to start in their local area with a vanilla/bog standard property in an area of high tenant demand.

Furthermore, very few lenders like to let to LHA tenants and most want vacant possession.

You may be hard pressed to find a lender who will take on an LHA tenancy.

Have you asked to see records that the tenant has been paying on time?

I also believe ground floor flats to be the least popular in a block because they have an added security risk of being more likely to be burgled.

Those are my initial thoughts. My overall feeling for you is to find something with a less complex back story and therefore less risk.

Dear Steve,

The one thing that always bothers me about incoming rents is "are they real?"
You say this is 'mostly' HB - will you have trouble getting the rest.?

here's a warning for you:

I've seen properties at auction quoting rental income of £24k pa
With a guide price of, say, £150k, so seems a very good investment on the face of it!
This being a 3 bed semi, nothing peculiar about it....

But!
...average rents in that area for a 3-bed semi, around £8-900pcm
...There is no way you could squeeze £2k per month from a 3-bed semi in that area....even renting separate rooms
So the only conclusion I can come to is that he's got his mate to rent it, putting the money through his bank, then gives him the rest back in cash.
-If anyone has a legit answer I would be very interested.

Just be aware of inflated rental incomes, make sure they are real !!

Fully agree with Vanessa Warwick. Pay special attention to LHA tenants. There could be other LHA tenants & this would bring the value downs with all the social issues akin to LHA tenants.

You will need to also factor in the cost of extending the lease which as it's at 80 years may well already be into 'marriage value' which is more expensive than just extending, you would also need to get the current leaseholder to start the lease extension process as I believe that you would not be able to do this for 2 years after purchase.

Its very straight-forward. Yes, you should abandon this property and don't start looking again until you fully understand what you're getting into.

Good for you for trying to be proactive about investing for the long term but judging by the questions you're asking you have very little understanding of the market and most likely any investement you make will only end in tears.

Go and do some homework.

@PaulParker; Harsh but valuable advise.

Reply to the comment left by "Paul Parker" at "25/02/2014 - 14:35":

Perhaps you are right Paul, but everyone has to start somewhere,
and this guy has started by coming to this forum, and asking his first questions....
I guess there could be worst starts !! 😉 haha

Now Steve,
What you should do, IMO, is go down the local pub (a good start wherever you are in my opinion!):
Name: The Goose On The Green
Address: 167, Rushey Green, Catford, London, SE6 4BD
(as far as I know this is the closest)

...and see what the locals are like, there appears to be alot of crime in the area, BTW....
(compliments to Mark for this information!)

Steve, some homework for you now:

Do some research and come back to us and tell US if you think this is a bargain buy, an average buy, or a poor investment !!
- I'll leave you to work out how you will judge that !

Earlier today I spoke to a lady who had been stung THREE times by property sourcers and clubs!

She has lost thousands of pounds and endured years of stress trying to recoup her losses.

I say bravo! to Steve for asking for advice.

Forums like P118 and Property Tribes are a "hive mind" of knowledge and experience that newbies can leverage to help them avoid the pitfalls, sharks, and poor deals.

I encourage any newbie to ask as many questions as they like. I will always encourage and support those that have the desire to learn. 🙂

Leasehold property, only 80 years left on the lease and LHA tenanted at present - I would give this one a miss even before looking at any of the details!

Just my opinion, but having one property within my portfolio that almost matches these basic details (it has more than 80 years left on the lease) it is the first one that I would get rid of!

I find that the block of flats always attracts problems and the service charge is becoming a bottomless pit that is virtually impossible to challenge with any success despite trying on numerous occasions. It struggles in terms of value and if your block has other repo's within then you may struggle to revalue it later on at anything where you would expect it to be.

I could go on but if I were you I would be looking at freehold properties in decent areas. That may not be easy if you are looking in the London area so perhaps searching further afield may be the answer.

Good luck whatever you chose to do but certainly do as much digging for facts and info before you do take the plunge.