Glasgow/Leeds/Manchester or save for a year to buy in London?

Glasgow/Leeds/Manchester or save for a year to buy in London?

20:20 PM, 16th March 2015, About 9 years ago 32

Text Size

I would like to invest some savings that I’ve got into a property through buy to let (min 25% LTV). Unfortunately my savings are not big enough to purchase even a small property in London for now. So I have a choice: Glasgow Leeds Manchester or save for a year to buy in London

– save for another year and hopefully get small property in London
– purchase a new build (off-plan) property in Glasgow/Leeds/Manchester

I’ve done some research and looks like yields in Glasgow/Manchester/Leeds are higher than I can get in London (approx 7-8% in those cities against 5% in London). But the problem is that property prices in those cities have mainly fallen in recent 5 years but in London they went in the opposite direction. So yield-wise those cities are more attractive but in long-term perspective London hypothetically wins (as you can make money on selling rather than on rent).

So, bottom line, I’m a bit lost and would kindly ask for local community advise on this.

Thank you

Vlad


Share This Article


Comments

Mark Alexander - Founder of Property118

16:30 PM, 17th March 2015, About 9 years ago

Hi Ian

I wasn't aware of it until you said, I will investigate further but at first glance it is very different to our project.
.

Ian Ringrose

16:49 PM, 17th March 2015, About 9 years ago

The problem they have had, that you will also have, is that it is not worth my time looking at it for properties to buy, as they get so few listings. Likewise the cost of listing is not worth it for a seller, as so few people look at it.

Mark Alexander - Founder of Property118

16:57 PM, 17th March 2015, About 9 years ago

Reply to the comment left by "Ian Ringrose" at "17/03/2015 - 16:49":

Hi Ian

I've had a closer look now and I see what you mean.

Whilst I think you have identified some of the reasons the RightYieldUK website is performing so badly I think there are numerous many more causes that you have not mentioned.

We remain optimistic, watch this space! 😀
.

Vlad Eremenko

23:13 PM, 17th March 2015, About 9 years ago

Reply to the comment left by "Paula Ingram" at "17/03/2015 - 09:55":

Hello Paula,

Thank you for your comment. I don't know a lot about Edinburgh property market but will definitely take a look in few weeks as I'm traveling there. I'm not sure how to leave private message for you here - but it would be great if we can meet for a chat in Edinburg. Mark Alexander, please excuse me if this request is against your rules.

Thank you,
Vlad

Vlad Eremenko

23:15 PM, 17th March 2015, About 9 years ago

Reply to the comment left by "Ian Ringrose" at "17/03/2015 - 10:10":

Thank you Ian, will try to avoid such areas if I go north. I was going to concentrate more on Glasgow - just because quite a lot of businesses have moved there (JP Morgan, Morgan Stanley etc). So will primarily concentrate on city center.

Thank you,
Vlad

Vlad Eremenko

23:19 PM, 17th March 2015, About 9 years ago

Reply to the comment left by "rav singh" at "17/03/2015 - 10:11":

Hello Rav,

Thank you for your advice. I would probably stay away from housing benefits tenants (it's just my assumption that it is easier with others). As I mentioned in one of the comments above - I'd like to concentrate on Glasgow because of amount of businesses there (hypothetically more tenants). So I would look at center of the city for a 1/2 bed flat for now.

Thank you,
Vad

Vlad Eremenko

23:23 PM, 17th March 2015, About 9 years ago

Reply to the comment left by "Dan Sawyer Cherry Picked Properties" at "17/03/2015 - 10:53":

Hello Dan,

Thank you for your advice. You mentioned "..I target blocks and streets where I know I can buy .." - would you please share what city you are investing in? As I've written above I was thinking about Glasgow. (please accept my apologies if this question is inappropriate)

Thank you,
Vladimir

Vlad Eremenko

23:26 PM, 17th March 2015, About 9 years ago

Reply to the comment left by "Ian Ringrose" at "17/03/2015 - 11:08":

Yes, Ian, being far away from investment is my main concern. I live and work in London and even though Glasgow looks promising in terms of yields, I simply can't estimate amount of hassle and losses that I will have when using agency in between me and tenant. So before making a move I wanted to hear people's opinion - for now everybody was extremely helpful here to raise all major points.

Thank you,
Vlad

Vlad Eremenko

23:29 PM, 17th March 2015, About 9 years ago

Reply to the comment left by "Dan Sawyer Cherry Picked Properties" at "17/03/2015 - 11:40":

Hello Dan,

How can I reach you to discuss what are the cities that you cover?

Thank you,
Vlad

Vlad Eremenko

23:40 PM, 17th March 2015, About 9 years ago

Reply to the comment left by "Dan Sawyer Cherry Picked Properties" at "17/03/2015 - 15:44":

Thank you for answer Dan,

Your words make perfect sense, unfortunately in my case it is hard to be close to investment as with my budget there's nothing around London (or very-very poor properties). So that was my original concern - how big is the hassle of distant property investment with someone being a proxy. I guess I would need to actually rely on some numbers.

What numbers do experienced people use for property management expenses? I would assume that math us smth like this:

- calculate rent income based on 10 months of rent instead of 12 as you will have void periods
- 5% of tenants payment should be put aside for property maintenance
- 5-10% of tenants payment should be put aside for agency fees

Is this close to truth or I'm missing something?

Thank you,
Vlad

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now