Buying houses vs flats in East London

by Readers Question

8:34 AM, 9th January 2015
About 4 years ago

Buying houses vs flats in East London

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Buying houses vs flats in East London

I am looking to add more properties to my very small portfolio. There are not that many freehold houses on the market in my price range within East London and I am considering buying flats.

However with flats there is always the tie in with lease period and also the annual rental that has to be paid which eats into any profit made. I note lot of landlords are buying flats with ease. I wondered what the preferences is for other landlords?

Would you great to hear your views

Nadiavs



Comments

Neil Patterson

8:46 AM, 9th January 2015
About 4 years ago

Hi Nadia,

This is a question that often comes up and everyone has different strategies.

The strategy you take needs to be based on research of your area and personal circumstances. Factors to take into account when looking at houses vs flats:

Purchase Price
Rental Income which with then give you yield
Break even point
Demand
Return on Capital
Your liquid cash budget
Supply of property in the area
Cost of Management charges/Ground rent
ETC

You need to use our Landlords Calculator >> http://www.property118.com/calculating-rental-yields-and-returns/

And property research tool >> http://www.property118.com/property-reseach-tool/

Then there is personal preference. Flats can be easier on maintenance, but then you can have problems with the Freehold Management and costs, which you don't get with houses.

Also from years of observation, when you have a house price crash cycle flats seem to suffer more as a percentage drop, because houses tend to be more desirable in most areas and have higher demand.

The answer really is there is no answer as your strategy will depend on your circumstances and the demographics of the area.

Mandy Thomson

11:11 AM, 9th January 2015
About 4 years ago

Hi Nadia

Please see my comment to a recent post on this site: http://www.property118.com/high-london-prices-capital-vs-yield/71398/#comment-50282

I would say that certainly for London, flats are more desirable for tenants, unless you're looking to let an HMO.

Peter Johnson

18:44 PM, 9th January 2015
About 4 years ago

Hi Nadia,

What price range are you looking for for 3 bed houses in East London?

Neil Robb

16:17 PM, 10th January 2015
About 4 years ago

Hi

Why is it all about buying properties in London how much would it cost for say a two bed house Being cheap 160,000 I would say listening to the news you would never get a house in London for that price £250,000 plus, then rent £1200,00 per month.

Yes you have the chance to make capital appreciation on the other hand you also have the opportunity to take a big down turn.

If you spent that money in other areas of the UK you would get a lot more properties for your money.

I was lucky and bought a few lately For that amount of money I have bout 5 properties bring in rent of £400 to £450 a month. which give a good return every month. I don't think these will ever shoot up in value but they will increase over time. and not all your eggs are in one basket.

It would be interesting to hear why people buy expensive buy to lets and how they make a profit from them.

I find it hard to imagine making a profit on a buy to let bought over £80.000.00.

I have properties that value over a hundred thousand and get £500 rent Month properties I bought for £35,000 which I get £500 rent a month.


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