First Buy to Let: buying repossessed property- pitfalls?

[MGS]

Hi all, I am a 23 year old male from Glasgow. I have been a reader for a while now and I have finally bought my first B2L property in Glasgow. It is a repo flat about a mile from the city centre in a popular location for students and you professionals. I bought the flat for £100,000 (surveyed at £110,000) and it was sold in December 2007 for £130,000 so I believe that it is a good long term investment for me as I am buying below MV and very confident of rental income. The interest payments are £400 pm and I am looking for £550 pm. I get the keys on October 1st.

That is my background now onto the questions...

1) Has anyone any advice when dealing with repo flats? Ie all the services are disconnected

2) There may be an opportunity for me to buy another repo flat in the coming weeks? I have the finance available, but in your experiences is it one step too far, buying two before even setting up my first one? Or if the opportunity is good and i can buy in a similar deal (10% below MV), do I go for it?

Thanks

[Rodent1]

Re: utilities just call them and set up all accs in your name with meter reads from day you get keys ..........unless you can organise T to move in on day one in which case put them in T name .........I would start marketing immediately ...if a friendly agent tell him you want to go round and leasure for carpets etc and take prospective T with you .....BUT DO NOT SIGN AN AST UNTIL YOU ARE IN FULL AND CLEAR POSSESSION OF PROP ie when you have completed ...........or possibly organise an immediate exchange on prop with vendor ......for say 5% of purch price ....negotiate acces rights up to 1/10 so you can "do up" and market with a view of immediate let on 1/10 ...........


Should you buy 2 ..............this is down to you , confidence level, experience etc .........i would i have bought upto 5 at a time .........but i have been at it a while !!!

At the mo ...probably best to get first one up and running and kick 2nd one in behind it ............prices are not about to leap upwards ...so not real "urgency "!!

The Rodent

[MGS]

Thanks for the advice Rodent. I think il just focus on the one flat at the moment and then maybe look again come Christmas time.

I am unsure whether or not to use an agent to let the flat out. While on Glasgow Gumtree I saw an advert from a letting agent looking for a flat for two young pros in the area i have just bought in. So I contacted him and he says he has two sets of tenants looking to let in my area. He said that his charge would either be 11% pm or a one off £149 for reference checks, inventory etc. I am unsure which option to take him up on or whether or not to just advertise the flat on gumtree, rightmove, s1homes etc myself.

Any advice is most welcome.....

[jeffrey]

MGS:
Property is in Scotland. You will be aware that most LZ members are in E&W where the law is different in many cases (e.g. contract for statutory services); tax and company law are largely the same throughout UK, however.

[MGS]

Hey thanks,

Yeh I realise that most people on here will own in E&W but I still find the majority of information as relevant to me. Jefferey, do you think that a one off £149 fee to a letting agent is worthwhile? Or should I advertise myself?

[Holmes1981]

Hi,

I am a Landlord in Fife.. Agent fees can vary between 10-15% of gross monthly rent, so 11% is a reasonable deal from that prospective...

The thing to consider is whether you have the contacts i.e plumber, sparky, joiner etc should something go wrong AND the time. I am guessing as you have one B2L you have other income i.e a job... So you must think what if you get call during the day or night can you drop everything to attend.

If you have a good agent they will be able to deal with this for you, but once again they take a fee, which incidently is a tax deductable expense on your SA form. Once you build up your portfolio you can negotiate discount with your agent and see if they will reduce fees.

Holmes 1981