We are looking to add a fifth property to our Buy to Let Property Portfolio
It’s been almost 18 months since we bought our last Buy to Let property and we think it’s now time to look for another property to add to our passive income property portfolio.
We currently have 4 buy to let properties, 3 of these are all ground floor, one bedroom properties that are all in the same road. These are in two storey, terraced, tenement style blocks and were built around 1910. These typically rent out at £350 a month.
Our other buy to let property is a two bedroom, ground floor 1980’s flat. This typically rents out for £425 a month.
So we now need to consider our options for our next buy to let property. There appear to be 3 main types of property to consider:
- Buying another circa 1900’s tenement style flat. The advantages are that these early twentieth century properties are now relatively cheap to buy and offer an excellent rental yield.However due to their age, they typically require more maintenance and can suffer from problems like rising damp and condensation. Many have roofs that will need replacing in the next 10 – 15 years.
One advantage of buying an older property like this is that it many have already been recently modernised and upgraded buy previous owners and have new bathrooms and kitchens.
- Buying another 1980’s property. Many of these properties are from the decade that taste forgot! Luckily most don’t have the terrible avocado green bathrooms that were popular in the seventies, but many still have the peach, plum or sky blue bathroom suites that were popular in the eighties. So you may have to budget for at least a new bathroom.The kitchens in many properties from the 1980 and early 90’s are also now very well worn and tired looking and will be in need of replacement.
One problem with 1980s properties is that many are very bland and box like and lack the character charms of older properties.
The expense of a new kitchen and bathroom may be justified if the property you are buying is cheap to purchase and your intention is to flip or sell the property quickly to make a fast return on your investment.
However if your intention is to buy and hold the property for around 20 years like we do, you will need to consider if the cost of the investment in a new kitchen and bathroom can be justified by an increase in the monthly rental you will receive on your buy to let property.
Whilst we can’t condone the terrible properties that some “slum landlords” such as the Rigsby character from Rising Damp – Rupert Rigsby (Leonard Rossiter) is the tight fisted landlord used to rent, there will always be a market for clean and cheap rental properties.
- Buying a new build property for your Buy to Let Property portfolio. The major advantages with buying a new build property from a housing developer is that most of them offer a 2 year warranty. This means they will put right most issues your tenant may have with your buy to let property.The main disadvantage with buying a new build property for your buy to let property portfolio is that typically the cost of these properties is much higher than others on the second hand property market.
The monthly rentals on new build buy to let property is typically higher than older properties, but since their purchase price is normally much higher, the yield on new build buy to let properties is typically far lower than older, more established buy to let properties.
Join us on our journey as we search for our 5th Buy to Let property investment.