Buying an aprtment as a second property

[Tefal]

Hey guys, need a little advice and also some general pointers/info.

I've got my house in wales as my current residence but tbh its boring here i spend most of my time in manchester/london.

So i'e been thinking of buying an apartment in Manchester partly as a place to stay weekends (Friday morning to Monday evening usually) and partly as an investment.

I've got around 17k just sat in a current account(and a few k worth of shares through work schemes, as they've gone from 27 euro when i bought them to 100+ now) , income is nominally, no OT 2300 a month after tax, mortgage on current property is 255 quid a month (about 55k still outstanding). with ot i can put that figure to 3k+ a month but its not guaranteed so not useful for mortgage applications, but in reality im the only person doing my job instead of 4 so they're pretty much happy for me to work extra whenever i want, with no signs of this changing.

am i right in thinking that i've got enough for a deposit on say a 120-140k ish apartment or are banks much stricter with second homes?

while im not there or London i was thinking i could Airbnb it out (i know a guy who manages a few apartments for people for that) which wouldn't be buy to let as it would be my secondary residence not a letting property, am i right on that or wrong?

its hard to find apartments that aren't just "investment only" forced to rent out ones tbh

but aside from ground rent, service charges, and the length of the lease hold (been told never less than 75 years minimum, but most are 200+) are there any major pit falls about apartments that are different to houses?

is this a sensible idea where i put my money to work, hopefully gaining more than the cost of interest on the mortgage but also i get to use the place. or would i be more sensible in some sort of stocks and shares thing?

I'm not really sure wher to look for advice on this as i dont know anyone whose bought an apartment or a second home tbh

 

[Martynt74]

Don't forget the extra 3% stamp duty for second properties, although that hits you for flats or houses.

Airbnb is very sparse in Manchester, i was looking at the weekend and there were only 6 places in the centre. I think you could probably get a couple hundred a month through that after cleaning/managing costs etc. The other concern is there are loads of flats in Manchester going up and i think prices have probably stagnated a little (especially in the centre). Depending on your priority you may have better options aiming for around Stretford/The Heatons as they're becoming more gentrified as people are priced out of Didsbury/Chorlton. Might not be as convinient for you though or get the same Air BNB returns.

Be careful with service charges, some are around £3k pa which would be around £250 a month.

Alternatively there are lots of houses around Manchester with cellars, surely something with a sex dungeon would be more up your street?

 

[Tefal]

Don't forget the extra 3% stamp duty for second properties, although that hits you for flats or houses.

Airbnb is very sparse in Manchester, i was looking at the weekend and there were only 6 places in the centre. I think you could probably get a couple hundred a month through that after cleaning/managing costs etc. The other concern is there are loads of flats in Manchester going up and i think prices have probably stagnated a little (especially in the centre). Depending on your priority you may have better options aiming for around Stretford/The Heatons as they're becoming more gentrified as people are priced out of Didsbury/Chorlton. Might not be as convinient for you though or get the same Air BNB returns.

Be careful with service charges, some are around £3k pa which would be around £250 a month.

Alternatively there are lots of houses around Manchester with cellars, surely something with a sex dungeon would be more up your street?

nearly every flat for sale in Manchester is investment only, its damn hard finding a place you can actually live in yourself.

ideally northern quarter/anncotts would be goodbut budget right, but salford/quays would be decent too and there seem some reasonable ones.

i'll have a loot aty Stretford/The Heatons not familiar with that area myself.

as terrible as it sounds i kind of want a sex dungeon with high ceilings and a balcony

 

[Martynt74]

Yeah it is tricky. We looked a while back. Annoyingly you also find that the ones on rightmove have sold before you get to look so get registered with as many agents as possible.

When you're in keep in touch as i need a crash pad in Manchester

If you get an idea of what you can borrow then you could look at auction properties as you have the decent deposit to pay the up front costs, obviously there's then the risk of the lender not lending. But my parents almost bought a few that way. There's a big apartment block above the Premier Inn by Harvey Nichols which is reasonably priced. I think mortgages are tricky to get though because it's above a business.

 

[Semple]

as terrible as it sounds i kind of want a sex dungeon with high ceilings and a balcony

Might need to up your budget for that!

Stretford's not a bad area, we did look at quite a few houses there, although i'm not sure if it will have much of a selection for flats.

For your budget i don't think you'll find much in the south areas of Manchester (Sale/Chorlton/Didsbury), but if you're after it for the social side of things, then the centre is probably right up your street. Salford has had a lot of new build flats go up that are within your budget, and not too far from the centre either.

but aside from ground rent, service charges, and the length of the lease hold (been told never less than 75 years minimum, but most are 200+) are there any major pit falls about apartments that are different to houses?

is this a sensible idea where i put my money to work, hopefully gaining more than the cost of interest on the mortgage but also i get to use the place. or would i be more sensible in some sort of stocks and shares thing?

I'm not really sure wher to look for advice on this as i dont know anyone whose bought an apartment or a second home tbh

How do you get between Wales/Manchester? Might need to consider things like parking, or close to a tram stop.

Is it a sensible idea? If you plan to keep it for a good length of time, then i'd guess it could be a nice little earner for you. If it's only something you plan to have for 5-10 years, then the additional stamp duty costs + additional council tax + selling fees etc, would probably negate any gains over other investments. (Albeit you would have had to pay to stay somewhere else anyway).

So that's probably your first question, how long do you foresee yourself keeping a flat?

Another question... If you seem to dislike Wales so much, and spend most of your time in Manchester/London, why not sell the home in Wales and move to Manchester or London?

 

[Skillmister]

while im not there or London i was thinking i could Airbnb it out (i know a guy who manages a few apartments for people for that) which wouldn't be buy to let as it would be my secondary residence not a letting property, am i right on that or wrong?

This is coming up a lot at the moment and you will have to look at the covenants. It seems to be that there is now precedent for airbnb lettings to breach a covenant of use as a private residence (a fairly common covenant) whereas a long term tenancy would not breach this.

https://www.todaysconveyancer.co.uk/main-news/expert-opinion-airbnb-leasehold-flats/

 

[pigeonguyuk]

Buy it - rent it to your "mate" who then sublets it back to yourself. problem sorted lol

 

[Tefal]

Might need to up your budget for that!

Stretford's not a bad area, we did look at quite a few houses there, although i'm not sure if it will have much of a selection for flats.

For your budget i don't think you'll find much in the south areas of Manchester (Sale/Chorlton/Didsbury), but if you're after it for the social side of things, then the centre is probably right up your street. Salford has had a lot of new build flats go up that are within your budget, and not too far from the centre either.

Yeah Salford is good I know the area well (friend lives there) and would be great, all the new builds thouhhbare being sold as managed investments not places you can live yourself though annoying (1x/the gateway builds)

How do you get between Wales/Manchester? Might need to consider things like parking, or close to a tram stop.

Is it a sensible idea? If you plan to keep it for a good length of time, then i'd guess it could be a nice little earner for you. If it's only something you plan to have for 5-10 years, then the additional stamp duty costs + additional council tax + selling fees etc, would probably negate any gains over other investments. (Albeit you would have had to pay to stay somewhere else anyway).

So that's probably your first question, how long do you foresee yourself keeping a flat?

Usualy I get between by motorbike or train.

Length of time probbaly 5-10 years afer
That I expect to have settled down a bit so it would either be sold or let out permanently (which would need a change of mortgage iirc)

Another question... If you seem to dislike Wales so much, and spend most of your time in Manchester/London, why not sell the home in Wales and move to Manchester or London?

I have a nice cushy job that's Secure and pays well but sadly the only 2 places we have factories I could work in are north Wales and outside bristol.

Moving to a city would mean becoming a contractor

 

[Tefal]

This is coming up a lot at the moment and you will have to look at the covenants. It seems to be that there is now precedent for airbnb lettings to breach a covenant of use as a private residence (a fairly common covenant) whereas a long term tenancy would not breach this.

https://www.todaysconveyancer.co.uk/main-news/expert-opinion-airbnb-leasehold-flats/

Cheers for that I will check any lease agreement throughly for that issue/check before hand if theyr ok with it .


Central Manchester flats where many are rented in cant see having such resteictons as those mentioned there

 

[Deleted member 68110]

Airbnb is being clamped down on. Definitely be careful.

Buy-to-let mortgages are more like business loans - max you can borrow is not based on salary, just the lower of two figures: 174.5 x potential monthly yield (rent) (might want to check that multiple) or 75% of value of property (at least I think these were the figures when we did it).

Extra 3% stamp is a kick in the teeth .

Tax break on mortgage interest is being tapered off. Make sure you check your profitability calcs.

 

[DampCat]

I dont know about the ins-and-outs of letting out property, but I can say that around trafford / stretford etc you'll never struggle to put tenants in short term for football, events at Event City etc.

We bought a townhouse in Chorlton but constantly walk around the area and Didsbury looking at lovely apartments and small homes that would serve as a "city base" if we were to move away. Just wandered past Didsbury Gate this morning and talked about it.

Most of Chorlton is rented, and almost everyone works in Media City / Media Industry so you can imagine the types of contracts etc they're on. 6 months, 1 year etc.

Food for thought maybe.

[City centre wise there's like 10 new blocks going up... could get an off-plan deal?]