Is it worth buying a flat to rent out?

[Andr3w]

The situation as it stands for me is that I've saved up a bit of money and not really sure what to do with it apart from leave it in a savings account/ISA. A lot of people keep saying to invest it into property.

I've been looking at doing this for a while but it wasn't until recently I've properly looked into it.

I've found a lovely looking 1 bedroom flat/messanine in an old mill that has just been converted, it's not big by any means but well laid out and very well finished. It's overlooking a river, is a 5 minute walk from a little town centre and about 100m from a railway station that is a direct line for stations in west Yorkshire. About 15/20min max to the centre of Leeds.

I'm going to see a mortgage advisor on Friday, however from doing the odd online calculation it looks like I'd have about a 20% deposit on the flat and then the mortgage would be around £220-£270 a month.

Another plus side for me is if I decide to come out of the Air Force in 4 years then I will have somewhere to live! Unlike now where I either have a barrack block or my parents house .

What would you do in my position? Do you feel with the current market that properties are a sound investment for the future?

I'm going to try view it again and discuss it more with the agency.

 

[Andr3w]

It's quite a sought after little town due to the railway station and it's proximity to the motorways. Location location location! Other 1 beds in the same complex are up for around £425-£475? This would be at the higher end of that.

 

[Andr3w]

All links would be appreciated. If you were to rent what type of yield do you aim for? A rough yield for the one I'm looking at is around 7-8%. Most websites say aim for at least 5%. 7-8% seems quite good to me.

 

[Andr3w]

All great do it, I have one I'm renting out, however BTL mortgages are very hard to get, I've just been turned down for two even with a 50% deposit.

Luckily one advantage of being in the forces is its much easier to get BTL mortgages for some reason.

Could you afford the hassle if it went wrong? One of my friends lets out a small flat - a new family moved in with positive references checked by the estate agent. One day they just stopped paying rent.

Tennants have so many rights it's taking months to evict them, meanwhile the landlord can't get access to the property and they could be wrecking the fixtures and fittings. Rent seems to be the first bill people stop paying and there's so little you can do about it.

I could afford the mortgage repayments just fine. However I am aware of the issues that arrive with bad tenants.

not only that, but is he able to comfortably cover the mortgage for when he has no tenants at all?

sometimes it can take months to find tenants or new ones when old ones move out.

also buy to let mortgages are extortionate compared to private mortgages.

Yes I can afford them comfortably.