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Hi I'm Simon from Leeds


Simonw

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Hi everybody, 

 

I'm brand new to this and hoping to buy my fist investment property within the next 6 months. 

 

I've encouraged a couple of good friends to buy in a consortium. My thoughts being that it would be quicker to buy 9 houses together than it would be to buy 3 houses seperately. Strength in numbers anad all that. 

 

Other than the obvious, friends falling out, having a JV agreement in place and having clear exit strategy, individually and collectively - is there anything else to be wary of? 

 

Additionally, I looked at a property yesterday and I hadnt realised, it has a lease hold on it (the £71 per month will seriously cut into profits as it's a very low value property). Although the margins are low on this, it would get us started and a low-risk property  to make our first mistakes on.... are there any other considerations to make regarding the leasehold? 

 

 

- and breathe.... 

 

SW

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Hi Simon,

The other thing to consider, as well as the maintenance costs to the management company, is how long is left on the lease

I think I'm right in saying that most people wouldn't invest in something with less than 75 years, and in fact I think you'd struggle more to get a mortgage on a lease this short.

Are you looking at properties in Leeds? Do you mind me asking which area of Leeds your looking at? I'm considering investing there in future.

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Nothing wrong with short leases if the price is right. I have a couple of "short" leases under 70 years that still mortgage up okay with lenders. The thing to bare in mind is the marraige value that is enforced under the 70 year threshold. As soon as the other flat in the block I own has passed two years of ownership, I'm setting a solicitor on the freeholder to attempt to squeeze a good price on a lease extension. This will be a learning curve.

 

But yes, long leases are preferable!

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