What You Need to Know About £30-50k Properties

Yes it is enticing to purchase a property under £40k in order to save on stamp duty, let alone the big promise of high rents &yields. Most new investors see the low cost of entry and the high price-to-rent ratio, and they assume this is a good property. But there is more to investing than just the numbers.

Unfortunately, reality sets in & in most often is new investors who got sucked in by the numbers on paper. They haven’t owned the properties long enough to really appreciate what owning £30-50k properties actually entails. As we always say…Management….Management and more management…

More so, some of these new investors purchase the property more times than not sight unseen from auctions and are not ready for the checks to start rolling in. Little do they know that they have bought a property in a high crime neighbourhood. All of the above are without doing the proper due diligence.

However associating yourself with the right people, high yields, low prices below 2008 prices and management in place make these £40-50k properties a potential. We are in the process of buying 2 properties that in 2008 were above £70k in Liverpool. We are in the process of conveying and will refurb and tenant. Some of these we will keep and some we will sell on….just as we do with our Professional and Social HMOs.

Yes you can find rather easily one of these sub £40-50k properties…however it is all management. Property management is a day to day process. It’s not solely about finding the tenant, renting out the property and collecting monthly rents. It is an everyday activity where you have to deal with all the problems faced by the property, tenant or you. It could be a leak in the faucets or getting rid of bad tenants. Any property requires a lot of care, including preventative maintenance, regular inspections, repairs, and improvements.

My colleagues own 50 of these type of LHA properties in Manchester. They have owned them for decades. No, it is not easy…however they have the experience to deal with these type of tenants. These properties will generate between £425 to 450 a month. Not sure where you can purchase a better investment that is bmv and yet high yielding…..

All of this might sound good…However it all takes action. We speak to so many people per day and see they get stuck in the rut of paralysis of analysis. In property you must take action

Thoughts??