Letting Property

[taichiperson]

In a few months time I will come into some money, and am considering buying property to let out, as it seems like a reliable way of getting some regular income. At a squeeze I could buy two small terraced houses (two bedrooms) - say around £100,000 each, which is more than possible in the area I live in. I could instead spend a little more on one three bedroom house and have more capital in hand for emergencies, or to help out our sons should they need help financially etc.

I see my options as - two houses and a little capital left over, or one larger house and more capital, less hassle renting it out. Local letting agents charge 12% for looking after properties which I think is quite reasonable, and I can get advice as to which companies are reliable. Other factors to consider are, what kind of tenant would each property attract, and which might be more in demand. Any thoughts or advice welcome please.

[albaqwerty]

I'd suggest asking local estate agents whether 2 beds or 3 beds let out quicker.
Then think about it some more regarding which route you wish to go.

[taichiperson]

Thanks Alba - is difficult as I don't have probate just yet.

Any one else have any thoughts please?

[Tilly2]

I'd start with one little terraced house and see how it goes.

[rockyracoon]

For me, it would largely depend on how buoyant the market is in your area. I'd buy the two houses for maximum rental income in the safe knowledge that I could sell (tenancy agreement withstanding) them both in a heartbeat.

[Peter Pedant]

simple maff

two smallsies will net bigger rent than one biggie

In Manch it is about 2 x 500 per month asa gainst 625

[taichiperson]

Ok that's interesting - I suppose I'm a bit cautious forking out around £200,000 and am thinking it doesn't leave me much capital afterwards - but then I would get a nice steady income (presuming the properties let easily). It is also a lot more responsibility, liability and maintenance. Thanks all :)

[melv16]

Having worked in many-a-rental property, I would stipulate that a monthly inspection should be carried out. I've seen properties absolutely wrecked inside a month.

[taichiperson]

Thanks Melv - my son's boss rents out commercial and residential properties so I'm aware of that.

Looking onto the other costs of buying property - solicitor's fees, stamp duty, surveys etc, I think it might just be too much of a stretch to buy two properties. But I will keep it in mind, thanks for all your answers - but keep 'em coming if you have any other thoughts :)

[DocHH]

To be honest although thinking about what to do with the money before actually getting it, is sensible, the best advice I had when inheriting a substantial amount (£100k, 20 years ago) was, "Get used to having the money first, before deciding what to do with it".

[Flonska]

You might also want to consider some of the following and how they might affect your plans?

https://www.which.co.uk/news/2018/01/12-things-buy-to-let-landlords-need-to-know-in-2018/

[bookbinder]

As far as what kind of tenant would each property attract is concerned, you could set your own guidelines, as did one of my neighbours when she put her house up for rent. This is what was written on the description: No smoking, pets, or LHA.

[taichiperson]

Thanks DocHH - as it's taking some time to get probate, we've mentally spent a lot of it already. I've been really pleased to give our sons 10k each - though I'm not sure what the younger one will do with it as he rents and I don't think he earns enough to get a mortgage - but then that's the case for a lot of youngsters nowadays. If he lived close by I would consider buying him a property to share with a friend or two (and for them to pay rent) - but property round his area is much more expensive.

[atalanta]

Buy a few issues of the local newspaper, and see what properties are going for rent and for sale. Look at rents. Pick a few of the advertisers, then maybe visit them for further information.