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Location suggestions for BTL


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Hi there,

I'm looking to buy my first buy to let. I'm based in Harrow but am tempted by Manchester/Stockport or even Liverpool/Leeds as it seems to be a great city and gives much more for your money and greater yields. I have around £75k to spend, would ideally like to make that stretch to two properties if possible. yield more important than capital growth. and, will accept lower yield for more desirable (better quality) property.

I have my own day job and don't have much spare time. I'm therefore thinking of...

  • Finding somewhere that doesn't need much work to be rentable (or ideally somewhere ready to go)
  • Having the property fully managed by an agent
  • Aiming at the young professionals market rather than student to reduce tenant turnover

Based on that info, does anyone have any suggestions on which areas may be good to focus on? There seems to be very little recent activity in the forums here. And a lot of the areas seems to have appreciated quite a bit already.


Any help or suggestions appreciated,

Toohey
 

PS: I copied this from a post that seemed very much what I want to do. credit to Tom (original post)

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I find houses for clients and have been focusing on Stockport for them lately. Lots of investment going on, overhaul of the town centre, new roads, Manchester airport expansion project, on the mainline to London, a stones throw from Manchester etc etc. 

I'm keen on the mid terrace model. i.e. 2 up, 2 downs. They rent really easily, no management fees, relatively easy to maintain, solid and durable. They're also popular when an area gentrifies.

You'll pay £150k for a nice one near Stockport station which is toppy for the general area actually but that's because it's very likely those close-in will benefit first from Stockport's improving fortunes.

There are also areas, still in Stockport borough, to the North of here, where you'll get a similar house for £115-120k. I like this area. It's low-rise, friendly and has a country park nearby but good rail and buss connections to Stockport and Manchester city centre. I think will benefit from the increasing desirability (and price rises) in places like Heaton Chapel & Levenshulme.

There are some good local agents who charge 10% for full management.

If you have £75k you might be able to just about squeeze-in two.

A £32k downpayment will leave you needing BTL mortgages of £85k on each, which is possible.

You'll get a rent of £600.

Monthly outgoings:

Mortgage: £240/month

Agent fees: £60

i.e. You'll take out £300/month and have an appreciating asset.

Give me a shout if I can help further.

Daniel

 

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If you're after yield, look at places like Burnley. You'll be able to buy a £40k house that would rent for £370pm or a £50-60k house in a better area that would rent for £410. Even at £60k, you could probably stretch to 4 which would net about £250 a month each after mortgage and 12% letting.

If you want Manchester, look to the north where it's cheaper, but there will probably be less capital growth. Places like Salford also work, but you need to know the areas

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I have recently purchased 2, 2 bed terrace properties in Denton - located to the East of Manchester, North of Stockport. I paid £100k for each and rented them both out immediately for £600pcm, so yielding at 7.2%. 

Denton is a nice area and attracts a great tenant profile. A multi-million pound leisure complex is in the process of being built, along with a new housing development too. Transport facilities are good and the town offers excellent capital growth IMO. It's currently a little cheaper than other areas, but I believe this will soon catch up.

 

Both properties are mortgaged with 25% deposits - so repayments are fixed for 5 years at circa £180 pcm, with a gross monthly profit of £420.

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Hi Daniel,

We have been investing in Leeds and surrounding areas for the last few years so can comment in this area. Based on our experience I would say you could get a 2 Bed Terrace or semi needing work in some areas for £75-£90k. Rents would come in at £450-£600, top end for semi, slightly less for terrace.

 

We’ve found there are opportunities both for vanilla BTLs that are ready to go and properties that need more work. We’ve got a lot of investment going into Leeds City centre over the next few years and the prospect of phase 2 of HS2 so the long term investment view looks positive.

You can read more about our story here, feel free to get in touch if you want any more info or insights...

Cheers

 

Nick

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On 2/11/2019 at 9:11 AM, daniel owen propery search said:

Hi Marc,

Your mortgage sounds good. Can I ask who you're with & what deal you're on?

 

 

Hi Daniel,

Apologies for the late reply - my notifications were 'off'. My current mortgages are with Birmingham & Midshire, 5 year fixed rate, currently at 2.63%. Everything was dealt with via my broker, which was a incredibly simple process.

Mark

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Hi Tooey,

A huge congrats for being on your way to buying your first BTL. Being that you have a day job, you have an excellent strategy regarding buying a property that is fully managed by an agent. I would recommend looking at properties that are already tenanted, and cash flowing. The agent/property manager is the glue that holds everything together, and watches over your nest egg. In regards to you mentioning, "I have around £75k to spend, would ideally like to make that stretch to two properties if possible. yield more important than capital growth. and, will accept lower yield for more desirable (better quality) property". Yes, that's definitely attainable. Do you due diligence for a good agent/PM, and the rest is golden. All the best to you on this new venture!

Regards,

Tim

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