Monday, 20 October 2014

What not to buy in Grantham for buy to let

Been a way for a few days, so sorry about the lack of posts.

When investing in property, it’s easy to get it wrong. Before I was a lettings agent, I bought a new build 2 bed flat because that’s what everyone else seemed to be doing. I still have it – mainly because no one is going to take it off me for the price I paid for it! You live and learn. But it’s important to remember that you make your money when you BUY a property, not when you sell it. If you buy at the wrong price, it’s more or less impossible to rectify that going forwards unless a rising property market saves you. If you buy sensibly, you can also expect to sell sensibly if you ever need to. Try to avoid:

• Simply overpriced. Once you’ve established you can buy a nice 2 bed property in a given area for £X, don’t pay £X + 5,000 for one because you’re impatient. If you overpay at the point of purchase, you’re playing “catch up” regarding the value of the property from day 1. So DON’T overpay!
• Needs work, and this isn’t reflected in the price. DON’T be put off by properties that need work, as these are often the best buys. But DO ensure this is reflected in the price. If it’s £X for a nice one, its £X minus £5,000 for one that needs a kitchen and bathroom.
• Unrealistic rental price. If you’re buying in an area where flats rent for £550.00, don’t expect yours to rent for £600.00 on the basis that it’s just been painted – expect it to rent for £500.00 if you don’t paint it!
• Lacking key features. If you’re buying in the suburbs to attract the family market, don’t buy the one house on the street that has no garden, or no parking. Families want gardens!

• Following on from my comments above, don’t buy in somewhere like the rougher parts of Earlesfield if you’re looking to attract a private tenant. Accept it will be housing benefit before you start.