Tenanted flats for sale with no deposit required???
Discussion
Just wanted to ask peoples oppinions on this:
My uncles been offered four flats. Their said to be valued at around £250-£300k each. However, the developer is selling them, with tenants already in them for about £210k each. The rent from them more than covers the mortage (on 25yr). Obviously in the current economic climate the developer is having trouble shifting them, but the above deal sounds like their giving them away.
Is this normal for developers to do to get rid of properties so they can move onto other developments.
What are the major risks in the buy to let market at the moment?
(ps. they also come fully furnished so other than signing on the dotted line, he doesnt even need to really spend any money.)
My uncles been offered four flats. Their said to be valued at around £250-£300k each. However, the developer is selling them, with tenants already in them for about £210k each. The rent from them more than covers the mortage (on 25yr). Obviously in the current economic climate the developer is having trouble shifting them, but the above deal sounds like their giving them away.
Is this normal for developers to do to get rid of properties so they can move onto other developments.
What are the major risks in the buy to let market at the moment?
(ps. they also come fully furnished so other than signing on the dotted line, he doesnt even need to really spend any money.)
its called cash flow.ItsTony said:
I think he said something about it being an interest only mortage with monthly mortage payments at about £800 a month.
so a flat worth £250k with I/O mortgage of £800/monthflat drops to £220k, tenants move out and the discounted rate finishes on the mortgage
so you need to find £30k, new tenants and £800/month
no thanks
amir_j said:
hornetrider said:
Why oh why would you invest in letting stock in a falling market?
Makes. No. Sense.
depends on the deal surely.Makes. No. Sense.
Do some research into whther they are genuine tennants and not "mates"!
But any house purchase is risky at present, he needs to be sure he is in it for the long haul and can wait 5 years plus to see any form aof return. With £1M invested in them, every month they are unoccupied will cost him £4k in mortgage, plus his loss of income from the interest having £1M in the bank.
It sounds to me like one of those investments that would be nice to share betweena few friends with £200k in each.
But any house purchase is risky at present, he needs to be sure he is in it for the long haul and can wait 5 years plus to see any form aof return. With £1M invested in them, every month they are unoccupied will cost him £4k in mortgage, plus his loss of income from the interest having £1M in the bank.
It sounds to me like one of those investments that would be nice to share betweena few friends with £200k in each.
ItsTony said:
Just wanted to ask peoples oppinions on this:
My uncles been offered four flats. Their said to be valued at around £250-£300k each. However, the developer is selling them, with tenants already in them for about £210k each. The rent from them more than covers the mortage (on 25yr). Obviously in the current economic climate the developer is having trouble shifting them, but the above deal sounds like their giving them away.
Is this normal for developers to do to get rid of properties so they can move onto other developments.
What are the major risks in the buy to let market at the moment?
(ps. they also come fully furnished so other than signing on the dotted line, he doesnt even need to really spend any money.)
If the flats were worth 250/300k, then they would be selling for that. Find out what they have actually been selling for, if they have......My uncles been offered four flats. Their said to be valued at around £250-£300k each. However, the developer is selling them, with tenants already in them for about £210k each. The rent from them more than covers the mortage (on 25yr). Obviously in the current economic climate the developer is having trouble shifting them, but the above deal sounds like their giving them away.
Is this normal for developers to do to get rid of properties so they can move onto other developments.
What are the major risks in the buy to let market at the moment?
(ps. they also come fully furnished so other than signing on the dotted line, he doesnt even need to really spend any money.)
Don't forget you'll need around a 30% deposit for BTL mortgages on a properly priced property.
Be very careful.....
Not unusual at all. Ive seen new build houses on offer with 5% deposit paid, Mortgage up to £500 paid for 12 months, new car up to £6000 etc... think you have to think is what will happen in 12 months or 3 years. Will this bargain appartment your going to get for £210k be worth £180k in 2 years time?. Will they be as hard to shift in 2 years as the developer is finding now, harder to shift? impossible to rent or shift?. Most towns and cities are awash with appartments.
stear clear.
What is the ground rent and maintence charge? Is it realistic? Most builders set way too low maintenance charge then when we or another managing agent looks at the figures and outgoings they dont match up. One we took on the builder had set it at £150 a year maintenance for 6 flats. Trouble was building insurance was £1600 a year, plus Cleaners, communal electrical, managing agents fees, build up of reserve funds. The Figures didnt add up.
When we then told the flat owners/leaseholders that they need to tripple/quad their payments they wernt very happy.
What quality are these tenants? better to start from scratch with safeguards.
Why put all the eggs into one basket. Better to spread the type and location of the properties for rental.
Rental prices for 2 bed in my area are static - not falling.
So not good odds in your favour and i would stay away from them.
What is the ground rent and maintence charge? Is it realistic? Most builders set way too low maintenance charge then when we or another managing agent looks at the figures and outgoings they dont match up. One we took on the builder had set it at £150 a year maintenance for 6 flats. Trouble was building insurance was £1600 a year, plus Cleaners, communal electrical, managing agents fees, build up of reserve funds. The Figures didnt add up.
When we then told the flat owners/leaseholders that they need to tripple/quad their payments they wernt very happy.
What quality are these tenants? better to start from scratch with safeguards.
Why put all the eggs into one basket. Better to spread the type and location of the properties for rental.
Rental prices for 2 bed in my area are static - not falling.
So not good odds in your favour and i would stay away from them.
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