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Advice needed: first-time investor in Liverpool


willm

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Hi all,

I'm new to the forum and to BTL investing. I have a budget of total property value of £70-75k, so am naturally looking at Liverpool.

I've only been to the city once but have done research on some areas. It looks like for my budget all I can get in the city centre is a studio. I'm not sure if these new builds will experience strong capital growth though (my goal is total return over the long term, so whether that comes via capital growth or cashflow isn't of great importance for me).

Does anyone have any advice on these new-build studios in the city centre, or any ideas of better options for that budget?

Many thanks in advance for your help!

Will

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Hi Will

What would your exit strategy be at the end? Studios have a limited secondary market as it's most likely other investors who would purchase them in the event you wanted to sell. 

Is that budget including a mortgage or is that your available cash funds/deposit? 

As always, run the numbers (including service charges and ground rent) and do your due diligence;

  • Who's the developer? What's their history, recent completions like?
  • What's the supply/demand and competition?
  • Once completed, how many other flats will come on the market at the same time as yours? 

My preference would be something within 1/2 to 1 mile of the city centre, with good transport links/amenities. For that budget, there's a few 2 bed terraces available on Rightmove (although not sure what the areas are like as Liverpool's quite hit and miss in terms of streets). With the terrace, you might be able to rent it out depending on its quality/standard, but in the future if funds are available, you could extend it or refurb it and potentially increase its capital value. With a studio flat, you might be able to convert it to a 1 bedder, but you're still limited to what the freeholder and lease will allow.

Hope that helps!

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On 2/25/2020 at 10:30 AM, DerekT said:

Hi Will

What would your exit strategy be at the end? Studios have a limited secondary market as it's most likely other investors who would purchase them in the event you wanted to sell. 

Is that budget including a mortgage or is that your available cash funds/deposit? 

As always, run the numbers (including service charges and ground rent) and do your due diligence;

  • Who's the developer? What's their history, recent completions like?
  • What's the supply/demand and competition?
  • Once completed, how many other flats will come on the market at the same time as yours? 

My preference would be something within 1/2 to 1 mile of the city centre, with good transport links/amenities. For that budget, there's a few 2 bed terraces available on Rightmove (although not sure what the areas are like as Liverpool's quite hit and miss in terms of streets). With the terrace, you might be able to rent it out depending on its quality/standard, but in the future if funds are available, you could extend it or refurb it and potentially increase its capital value. With a studio flat, you might be able to convert it to a 1 bedder, but you're still limited to what the freeholder and lease will allow.

Hope that helps!

Hi Derek,

Thanks very much for getting back to me, much appreciated.

In terms of exit strategy, it would likely be in at least 10yrs, possibly a lot longer. I'm 27, so I'm looking to the long term here.

My concern with the studios is, as you mention, difficulty in re-selling and also that I tend to find new-builds to be overpriced in comparison to the rest of the market.

The budget of £70-75k is total property value, based on 75% LTV mortgage. I've got around £20k cash so after fees, SDLT etc. I reckon max property value would be c£70k.

Thanks for the advice on areas and types of property - I'd avoided areas outside the city centre as I don't know the city well, but perhaps I need to start widening my search, thank you!

In the meantime while I'm researching, if you / anyone else has recommendations of half-decent areas that fit my budget that would be great. 

Kind regards,

Will

 

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  • 2 weeks later...

Hi Will, 

I’m from Liverpool and have a handful of BTL there and I would say that it’s better to go for a 2 bed terrace house. 
 

The main problem is that there are so many developments in and around liverpool city centre with ample apartments on offer. If you look at Rightmove at the moment there’s no shortage of apartments to rent so buying a studio apartment will not only apply to small percentage of the people looking, but you will have some compertition unless your proposed apartment is high quality and in a prime area of liverpool...
 

For my BTL I aim to have at least £25-30k on a 25/75% LTV mortgage so I can look for properties around £100k which will open up more properties in and around Liverpool. 
 

Whilst the are properties in Liverpool for less than £70k there’s a lot of a lot more for under £100k allowing you to get in to different better areas. 
 

Neil

 

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  • 1 month later...
On 3/8/2020 at 11:01 AM, n holman said:

Hi Will, 

I’m from Liverpool and have a handful of BTL there and I would say that it’s better to go for a 2 bed terrace house. 
 

The main problem is that there are so many developments in and around liverpool city centre with ample apartments on offer. If you look at Rightmove at the moment there’s no shortage of apartments to rent so buying a studio apartment will not only apply to small percentage of the people looking, but you will have some compertition unless your proposed apartment is high quality and in a prime area of liverpool...
 

For my BTL I aim to have at least £25-30k on a 25/75% LTV mortgage so I can look for properties around £100k which will open up more properties in and around Liverpool. 
 

Whilst the are properties in Liverpool for less than £70k there’s a lot of a lot more for under £100k allowing you to get in to different better areas. 
 

Neil

 

Hi Neil, 

 

Thanks for your comments! I've also never been to Liverpool but quite interested.

what would you considered the "prime are of Liverpool" from BTL perspective?

 

Thanks

Elva

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  • 2 months later...

Hi there 

Just to further this stream of useful commentary. 

I am going to be moving up to Liverpool for a few weeks to source and buy a BTL property. I am looking at L6 and L7. My aim is rental yields, not so much CG. I really want to network there but it's not that easy. 

For £150k with 25/30% deposit I am wondering if I go for a better built 3 bedroom house (easy to manage) or a simpler 4 bedroom place (higher yield +more risk). 

The aim, if all goes well, is to return before end of the Stamp Duty Holiday and purchase another property (Possibly an HMO) for bigger yields. By that time I will know a bit more about the associated risks with property investment in Liverpool. 

If anybody can shed advice on my strategy, especially re. the amt of bedrooms I purchase on first property, I would be Soooo appreciative. 

Thanks everyone! 

Ben

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  • 3 weeks later...
On 4/18/2020 at 4:10 PM, kevin_elliott said:

Can I ask what people invested in Liverpool think of Seaforth and the L21 area?  Seems to be a lot of honest small terrace houses and LHA tenants. 

Any landlords have experience in this are of Liverpool?

Thank you,

I looked at a flat in Waterloo and kind of fell in love with the area - it's a very short walk to a lovely long beach and there are lots of nice cafes and vintage clothes shops around there. So I put a rightmove alert for that area but I haven't looked at anything there since because the yields just aren't great - houses are more expensive but the rents just aren't any more than other parts of Liverpool. That's just Waterloo. Maybe Seaforth would work better.

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