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Update for where to buy in Manchester June 2019


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Hello,

I'm in my first buy to let situation, after a loss on my first property I learnt a lot from here. I am now looking to get a house before I leave the country this year, so I wanted to know if there are suggestions of where to look. From the 2017 podcast ASK97, does this still stand? I have seen Wigan, and Stockport, baring in mind the transport nearby. But this is my first, so risk is a consideration. Where do you suggest I should be looking at this time and since I am from the south, can anyone tell me of upcoming transport that I should be aware of as my research isn't conclusive. If it helps to know, I don't have a lot to invest with currently 20K and I need to have some for my move abroad too, I can look into those capital options myself. I appreciate the help and will look forward to your opinions. 

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How much have you a really got to invest? £20k isn't a lot, especially if you don't want to spend all of it. You also need to take into account mortgage fees, legal fees, stamp duty etc.

For <£100k, you're going to struggle to get a decent part of Stockport, but I think you need to concentrate on what you want and then the areas will follow - Stockport and Wigan are literally opposite sides of Greater Manchester so if you start with that, you'll never find anything. So how much can you invest and what are you looking to get - you're unlikely to get into an area with great capital growth, so how much are you looking for in rent?

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  • 2 weeks later...
On 6/13/2019 at 10:41 PM, dino v said:

How much have you a really got to invest? £20k isn't a lot, especially if you don't want to spend all of it. You also need to take into account mortgage fees, legal fees, stamp duty etc.

For <£100k, you're going to struggle to get a decent part of Stockport, but I think you need to concentrate on what you want and then the areas will follow - Stockport and Wigan are literally opposite sides of Greater Manchester so if you start with that, you'll never find anything. So how much can you invest and what are you looking to get - you're unlikely to get into an area with great capital growth, so how much are you looking for in rent?

Thanks for this, I was concerned that would be the case. The £20k is purely for the deposit. But it will be the most I can gain to continue with my plans to work abroad early next year. I wanted capital growth ideally but rent to at least cover just over the expenditures, so with that in mind, is there anywhere I can find like minded investors to do a joint ownership for buy to let? 

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On 6/28/2019 at 11:08 AM, the diabetic said:

Thanks for this, I was concerned that would be the case. The £20k is purely for the deposit. But it will be the most I can gain to continue with my plans to work abroad early next year. I wanted capital growth ideally but rent to at least cover just over the expenditures, so with that in mind, is there anywhere I can find like minded investors to do a joint ownership for buy to let? 

You say you've got £20k, but you originally mentioned needing some money for the move, so does that come out of the £20k as well. You've also got legal fees, survey fees and stamp duty, so are they all coming out of the £20k? If so, you're probably only looking at £15k as a deposit, allowing a bit for a bit of paint, carpets etc which any house is likely to need.

£15k means a £60k purchase price. You might do that in Wigan, it's not an area I know well, but it's unlikely to get you anything closer in to Manchester. 

At that price anywhere, don't expect great capital growth, but you can get a good yield. We've got properties in Burnley and for £60k there you should see a rent of £425-450. Take off about £50 for management and £70 for a mortgage, £10 for insurance and you're still looking at £300pm before voids. So around 25% before tax, which isn't bad and better than you'd get outside property. I can put you in touch with our letting agent in the area who could find you a good property. Alternatively, have a look at FMP in the progress journals. They operate in areas to the north of Manchester and showcase properties in your price range. Haven't worked with them, so can't give any thoughts, but may be with speaking to

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On 6/29/2019 at 7:19 PM, dino v said:

You say you've got £20k, but you originally mentioned needing some money for the move, so does that come out of the £20k as well. You've also got legal fees, survey fees and stamp duty, so are they all coming out of the £20k? If so, you're probably only looking at £15k as a deposit, allowing a bit for a bit of paint, carpets etc which any house is likely to need.

£15k means a £60k purchase price. You might do that in Wigan, it's not an area I know well, but it's unlikely to get you anything closer in to Manchester. 

At that price anywhere, don't expect great capital growth, but you can get a good yield. We've got properties in Burnley and for £60k there you should see a rent of £425-450. Take off about £50 for management and £70 for a mortgage, £10 for insurance and you're still looking at £300pm before voids. So around 25% before tax, which isn't bad and better than you'd get outside property. I can put you in touch with our letting agent in the area who could find you a good property. Alternatively, have a look at FMP in the progress journals. They operate in areas to the north of Manchester and showcase properties in your price range. Haven't worked with them, so can't give any thoughts, but may be with speaking to

Thank you so much, yes I have considered those factors and what you propose maybe what I need to begin with. And I assume I am right you only get tax on your earnings as you would in a job. I presume I need to do tax returns when I get into this, so in all just keep track while I'm not in a country. Any recommended contacts would be helpful, I appreciate that, I would be interested in the letting agency, I am in contact with one but I am shopping around as it is. 

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Tax is always complex as it's personal, but generally, if you buy the property in your own name rather than a ltd company, you will pay tax on profits as if they were earnings, but you need to do it through a tax return. Things have changed regarding mortgage relief and how you actually calculate profit. Our properties are in a ltd company so I can't really explain the change, but search for section 24. Things will also be more complex if you're not living in the UK, so you really need to get some expert advice on your situation and the best option.

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Hi all,

Very similar situation the diabetic above! But I have closer to £35k to invest in Greater Manchester whilst living in London. Have been considering areas West,  e.g Salford/Eccles etc. Ideally a 1-2 bed apartment (or house if lucky) with minimal work that needs to be done as it would be a hands off first BTL investment. Hoping someone could shed light on these areas, for example, what are the capital gain prospects of properties of that price and are there other areas worth considering? For me, this is a very long term strategy, so taking action is the next step and looking forward to getting started!  Thanks in advance everyone!

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22 hours ago, jmwalker said:

Hi all,

Very similar situation the diabetic above! But I have closer to £35k to invest in Greater Manchester whilst living in London. Have been considering areas West,  e.g Salford/Eccles etc. Ideally a 1-2 bed apartment (or house if lucky) with minimal work that needs to be done as it would be a hands off first BTL investment. Hoping someone could shed light on these areas, for example, what are the capital gain prospects of properties of that price and are there other areas worth considering? For me, this is a very long term strategy, so taking action is the next step and looking forward to getting started!  Thanks in advance everyone!

Taking into account stamp duty, legals etc, you're looking at £120-130k. 

You won't be able to get a city centre flat for that or in any of the prime areas (Media City etc), but you could certainly get one elsewhere, although I'm a bit less convinced of the attraction for the typical apartment renter.

What you will be able to find loads of is 2/3 bed terraces. Again, some of the best areas will already be out of budget but there's still lots to look at. Eccles can be good, although you really want to be closer into Manchester or the tram line and you may struggle to find something that needs little work in those areas for that budget, although from a quick look there's bit around Langworthy Rd in budget. Not my area and a long time since I've been around there, so wouldn't like to say what they're like, but as with any house in that price range in area around Manchester, do some investigation.

Heading a bit further out, Walkden is pretty good, Swinton is probably a bit better.

Basically, you should be able to find something in most parts other than the SW corner of Manchester and in towards Didsbury and Chorlton. Those areas will get the best growth, so you're always going to be following on, so look for fundamentals - trams into Manchester are popular (although the airport line takes an age once you get past Sale), but you'll find value in places like Droylesden and Failsworth on the tram line but not had the growth expected by the trams. However, as the rest of Manchester continues to rise, those places will become more attractive as people realise the value of an area 10 mins from the city centre by a 6 minute service.

Keep an eye on yields - if they're very good, avoid the area. The best areas will barely cover the mortgage stress test (and will be above your budget) so look for something in between. You should be making £2-300/month after fees and mortgage depending on exactly how much you spend, so whilst you may see it as long term and capital gains, that's still a couple of grand a year, relatively unaffected by recession or correction. And you'll still get typical growth of a big city i.e. not London, but not the risk of a smaller town where you'll get better yields but potentially very little growth.

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