Newbie to PRS?

New builds in Camden area are a safe bet for that money. You will get a studio for that price BUT capital growth tends to be very small so you rely on yield about 6% gross as you should get £2000/pm there.

You will also not need to worry about all the red tape coming as it is new build so minimal maintenance and regs (as all up to building regs anyway).

As a newbie, be very certain that you understand that even a gross yield of 6% translates in to a much lower yield (perhaps 3% or less) when tax (probably 40%) and other costs are factored in.

If, after making sure the numbers stack up, you still wish to buy a property to let to tenants, make sure you understand the responsibilities and legal obligations that befall a landlord.

Also, consider what you would do under a number of potential events. Perhaps a non-paying tenant or worse, one that damages your property. Maybe a fall in property prices?

Compare letting a property to other, more passive forms of income.

Most of all, be lucky.

Flats tend to have a yearly fee to a management company. This fee can be extortionate and cause all sorts of issues. Won't be buying a flat again.

Bear in mind you will pay tax on income, not net profit, then investigate why so many landlords are selling.

Would not bother with leasehold flat 10 months income, 2 months fees. I would buy a 2 bedroom house here in Poole for around £300k on Baiter Park by the sea, and put on holiday rent. All expenses claimable, and use yourself when not booked out. Far bigger return on your money.

You might like to consider how you are going to structure things to minimise tax. Assuming your in the 40% bracket, it makes sense to buy propertyt via your own company. The money you buy it with is then a capitalisation loan to the company which can be paid back without personal tax liability. However you would pay corporation tax, but as the company is turning over less than £50K that would be at 19%, ( currently). Using a company also opens the door to further purchases further down the line.

If you don't need the income for your standard of living right now, you might consider multiple purchases via interest only mortgages, using your capital as a heavy deposit across say 4 properties. The income should/would/could pay the mortgage interest, (tax relief applies to company mortgages), With the growth in value over 10-15 years, when you sell 2, pay any corporation tax due, then pay off the mortgages on the other 2, you walk away with 2 properties clear and free. Both still earning, both in the company. You have one great advantage, in that you have the cash for big deposits so your safety cushion is much better. Of course you may be of an age where 10-15 years is optimistic.

Where in London to buy is down to personal preference and the type of tenant your comfortable with. Personally I don't know London from a letting perspective, I'm sure others do. But does it have to be London? You could decide now where you wish to reside long term/ eventually and build a portfolio there. That way you avoid the hassle of having to sell and buy further down the line. It's worth checking out the commuter links, commuter belt and suburbs if London is still your first choice.

You also need to consider managing the property when it has been purchased. Will you be managing it yourself or using an agent?

If you are not sure, this guide https://landlordlaw.co.uk/openaccess_trails/saving-money-with-landlord-law/ may help you make up your mind.

Whether or not you self-manage, it is a good idea to do some training on the legal issues you need to know about.

We have an online 'legal update' training day with housing barrister Justin Bates on 25 March, which you may want to consider attending. Find out more about this here: https://landlordlaw.co.uk/sales-legal-update-2024/

I would seriously consider an alternative passive income. Utilise stocks and shares ISA (tax free) at £20,000 a year / bonds / REITs / High interest savings accounts / Shares held outside of ISA and transferred via 'bed & breakfast' each new financial year into your ISA.
Consider high dividend yielding stocks such as MNG - financial and Phoenix / Aviva / Legal & General - Insurance.
Buy to let is a very long investment strategy with many pitfalls such as increased costs / increased legislation and potential issues with tenants

For both experienced and particularly for newbie landlords, Buy to Let is increasingly a legal bear trap and even one minor error could land you with a possession nightmare or large fine. The pending Renters Reform Bill will exacerbate this situation, and we still do not know much of the detail. What we do know is that it will hand significant rights over your property to your tenant(s). You will almost certainly need to find a good agent to manage for you if you have no experience, which will reduce your net return.

Even with an agent, ask yourself whether you have the financial and emotional bandwidth to deal with the enormous stresses of non paying or difficult tenants who may wreck your property, and also ask yourself why so many landlords are leaving the sector - particularly if you can sit back and earn good returns via the bank or other investments for doing nothing.

I will be totally honest, if I didn't have any rentals already, this is not the sector I would not be looking at investing in now simply because of the toxicity of how ALL governments are and will be pushing their own agendas in regard to the PRS in the coming years.

Its basically fraught with uncertainly of not what will happen - but how drastic it could be.

Lots of LL are selling up or sitting tight to see what comes. I don't know of any who are looking to take on more properties - even if cash rich. THAT says it all!