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This
article is by an independent author and jml
Property Services takes no responsibility for its accuracy or content Buy
To Let - Beware Of The Extra Costs That You Have Not Budgeted For By
Philip
Suter I
have been involved with the property business in England for nearly thirty years.
I had been part of that sector of the community that owned investment residential
property before it was fashionable and it was interesting to try out the reality
in 2006 of
“Buy
to Let”. The
plan was to purchase a one bedroom apartment in an area with plenty of employment,
close to good communications and that would not need too much capital expenditure
on it. Being involved with the residential letting market in the south of England,
I know that a lot of areas are being too well developed. Numerous blocks of apartments
are being built and investors contact the agents and say they will buy three or
four apartments in the same development. They then wonder why they are not let
quickly and often discover that in a development of say 100 apartments, only 20%
are owner occupied and the remaining 80% have been bought by investors. The
prospective tenant is spoilt for choice although many investors do not want to
go to the expense of furnishing a property. They need maximum return on their
investment and will often approach local letting agents wanting their fees cut. My
search was therefore in a more established area, an older property that would
let well and not as expensive as a brand new slightly more modern property. Most
of the research was done on the Internet and eventually a couple of suitable properties
to look at found. A decision was taken immediately and as the finance had been
agreed within a week the Mortgage Lender’s surveyor had inspected the property. We
had found a property that had wood laminate floors, would need decorating and
some updating in the bathroom and had been let out for the past couple of years. The
process started early in August and by November the deal was completed. The decorating
contractors moved in. The extra expenditure also started. On closer examination
the kitchen flooring had to be replaced, the small number of tiles on the kitchen
walls had seen better days and had to be replaced. The
good news was the local letting agent had found a tenant (whilst the work was
going on, although we had not instructed them too early as tenants normally like
to see the finished product) and this person wanted to move in before Christmas
that was just around the corner. The
property looked good; the tenant moved in – a complaint within a few hours – no
water pressure. There is a shower mixer tap in the bath, but although it looked
good, did not really work. I
asked the contractor to take a look at it. There was no point in putting in a
pump as the hot water tank was too small and the cold water feeder tank equally
small. The property was built in the late 1980’s and it would take hours to fill
a bath! There
was only one alternative – a new water system. Unfortunately this could not be
fitted till after Christmas as it had to be ordered and with the annual Christmas
closedown in the UK our tenant was not going to be able to have a proper bath
or shower. Fortunately this person was going home overseas for Christmas. In
early January the job was completed. Some £1,500 of additional expenditure that
was not budgeted for. Remember
Always add on an amount to your budget for additional
building work or repairs that you thought would not be needed. Allow
for that fact the Mortgage interest rates seem go up more frequently than come
down. There
can be void periods before or after a tenancy when bills still have to be paid. Be
flexible regarding furniture. A lot of people simply do not have furniture so
check out local market conditions. You can do this by talking to a local letting
agent or viewing properties on the web. In the UK there are a lot of property
portals offering rental property. Finally
make sure that you take out the appropriate Landlord’s
insurances. Philip
Suter is a Director of jml Property Services; jmlproperty.co.uk
a UK based company offering Insurance products on line at jml-property-insurance.co.uk
and a holiday home advertising service.jmlvillas.com
and management training within the uk. He a travel writer and is a very experienced
property consultant with over 30 years work in the Residential letting business
in the UK and served on the National Council of ARLA. He is a Fellow of the National
Association of Estate Agents (NAEA) and a Member of The association of Residential
Letting Agents (ARLA) Article
Source: http://EzineArticles.com/?expert=Philip_Suter
http://EzineArticles.com/?Buy-To-Let---Beware-Of-The-Extra-Costs-That-You-Have-Not-Budgeted-For&id=454134 The
information supplied on this page is by a third party and jml Property Services
do not take any responsibility to its accuracy ©jmlpropertyservices 02/07
See
also How
to present your rental property for letting How
not to present your rental property for letting Professional
Property Organisations
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to Property Articles
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