Viewing a BTL property

Russinating

Russinating

Russinating

Soldato
Joined
27 Dec 2005
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Location
Bristol
I'm viewing a BTL property tomorrow and as a first venture into this world I wanted to ask if there's anything I should be looking out for or checking any more so than a normal property. I'll likely only get one chance to view it before an offer is accepted so I don't want to miss anything whilst I'm there with the current owner.

It's a studio flat with a tenant in contract until early October so I'll ask for a copy of that agreement. With flats, what do I need to ask to see with regards to the management company/associated charges etc or will the specifics of that come later when the solicitors do their thing?

Thanks in advance.
 
Ask about who looks after the flats and what their charges are for the upkeep/maintenance. As the LL you normally pay these charges as part of the rent rather than the tenants by my understanding.

Find out how long is left on the lease if you can.

Verify that everything looks in good working order, check that the central heating system looks reasonably modern, verify the smoke alarms and carbon monoxide alarms are present and don't need replacing.

Also generally view it as if you were buying to live there, check there is no sign of damp or other structural issues, does anything need work/expense to fix etc?
 
Age of the boiler, any recent maintenance issues, especially bathroom / toilet which always seem to have issues... age of white goods- you have to repair / replace when they go wrong.

As mentioned, ground rent and service charges which you have to pay, and council tax which you have to pay when vacant.

plus do you need permission to rent? the lease holder will often charge an annual fee for allowing you to rent it, and often can legally stop you from renting if you fail to declare and pay.
 
Sounds like a headache unless there is a really good yield. I'd go with a freehold property if it was me.
 
Like what has been posted above, ground rent, service charges, right to rent, etc. None of that with freehold.
 
mattyg said:
You can still get restrictive covenants on Freehold...
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Well that depends how old the property is. Mine is 100 years old and the restrictive covenants say that all fences have to be uniform in hight. It's anything but now but whos still around to enforce it!
 
Have a really good look at common areas, especially things like the roof, gardens, access points, drive ways, gutters etc etc. Any bills there you will have to pay.

You need to make sure you can actually make a profit, make sure you do your sums especially after all the changes to mortgage interest (tax), furnished lettings (tax) and stamp duty. Expect more costs in the future such as having to foot the bill for any background checks on tenants and inventories. Politically there is a bit of a war on landlords at the moment as it is seen as popular policy but it doesn't address the elephant in the room which is a complete lack of supply of affordable housing in the south east (edit: everywhere!).

Contrary to popular belief most landlords don't actually make that much money so unless you have a substantial deposit or there is a massive demand for rental properties I wouldn't be expecting to make much cash outside of any potential gains on the property its self. You also have big risks such as tenants not paying their rent, trashing the property or issues in another flat that effect yours like a water leak.
 
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LeeUK said:
Like what has been posted above, ground rent, service charges, right to rent, etc. None of that with freehold.
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You're right, come to think of it I don't know anyone who owns or rents a flat for those same issues. Plus seeing as I'm looking at studio flats then I think freehold properties are in my budget too. Oh wait... :rolleyes:

Thanks for all the advice guys. Viewed it this morning and unfortunately it's too small (under the 35sqm most lenders seem to specify as a minimum, otherwise perfectly sizeable for short term/Airbnb). So will likely go to a cash buyer.

Was still interesting to view it and do all the sums. Needed a fair bit of work depending on if you wanted to keep it as a hovel or go for the Airbnb market; electric water heater, no boiler, no central heating, needed new bathroom suite, general redecoration. Communal areas were tired too, dirty carpets and walls, faint smell of damp etc. Otherwise yields were good, on the market for £102,000, current tenant paying £550pcm in the state it was in and mortgages were £318pm.
 
Russinating said:
Otherwise yields were good, on the market for £102,000, current tenant paying £550pcm in the state it was in and mortgages were £318pm.
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Sounds like the current owner has milked it for every penny without maintaining it and now wants to sell it on as it needs a lot to cash to bring it up to standard.

£200/month before things like ground rent, service charges and lettings fee's is not a lot. Especially given how much future investment that is needed and the risk involved.
 
Yeah, but then I'd rather buy something that we can add value to (and therefore has been neglected) rather than paying for that in that asking price.
 
Are you looking at a repayment mortgage or interest only because if it's the latter then you shouldn't be paying even half the £318 per month mentioned.
 
LeeUK said:
Well that depends how old the property is. Mine is 100 years old and the restrictive covenants say that all fences have to be uniform in hight. It's anything but now but whos still around to enforce it!
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The family. I've bought (and gone against the restrictive covenant) a number of properties that are over 100 years old. These things get passed down the family lines.
 
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