Video Blogs – Property Investment & Acquisition02 Nov 2017
“Why ex local authority properties in good areas make great buy to let investments”
Hopefully you have watched my short video showing a good example of a buy to let property in Glasgow’s West end. This property is , in my opinion, a great example of why ex local authority properties which are well maintained and located in sought after locations make excellent buy to let investment properties. They might not look so pretty on the outside but for most renters they are much more focused on the inside and how that is presented, the fact its not in a sandstone tenement really doesn’t matter to them!
So what makes them a good buy?
- Ex local authority properties tend to be maintained by a housing association and that normally means that they are well looked after in the communal areas and surrounding grounds, and that the communal charges ( or factoring fees) are not prohibitively expensive! Check out my video to see the grounds of this particular one – they are great!
- These properties tend to be spacious and light with big windows, making them attractive to tenants. This is because they were built as the type of flat they still are they haven’t been converted into a 1 bed from a single room tenement for example, or converted into a 2 bed from what originally would have been a 1 bed (as in many Glasgow tenements)
- Lower purchase price – this can be seen as both a positive and negative. You are never going to see huge capital appreciation in these properties because some mortgage lenders will not lend on them ( as they may not be “standard construction”) so you can alienate part of the market (first time buyers for example). They tend to be cash buys but because of the fantastic return, there are always investors looking for these. In my opinion, in Glasgow we won’t see big capital appreciation anyway over the next 15 years, unless you are in specific pockets and even then, its unlikely you’ll see more than 4%, so yield is key for me!
- Sought after area = very stable type of tenant=low risk
So a combination of low factoring fees, reasonable purchase price and good rent (b/c of the good area) means that these properties tend to make great buy to let investments.