As I was eating my 173rd mince pie of the festive season (a very merry Christmas to you all – hope you got something nice……. I got fatter), I realised that I have neglected to mention what I am actually buying (I guess you know it’s a property but what type exactly) and why.
SO. The biggest factor in deciding what to buy was the small matter of money. When we talk in terms of deposits as a percentage, 25% is a number which doesn’t necessarily mean much. But when you instead use ‘£43,750’ it sounds like a lot of money – for those of you who buy higher value properties, the numbers make my eyes water. And this figure doesn’t include all the other fees… Dear Lord, let my purchase complete before April.
Buy to let deposit
So the amount I could spend was very much limited to the amount of deposit I could raise. Generally for buy to lets you need 25% although you can get away with 20% sometimes, and the deals get better at lower levels. So with a very set maximum purchase price in mind I was fairly restricted in terms of what I could buy.
The second factor was where. Now we are based in Sevenoaks, which is a little bit like London – high value and low yielding. Whilst I don’t expect this property to be an income spinner (for now at least), for me, Sevenoaks didn’t make sense, i.e. the rent wouldn’t cover the mortgage and I didn’t fancy having to top things up, plus this would mess up the mortgage so that was out.
Not so disgusted of Tunbridge Wells
So I instead turned my sights to Tunbridge Wells, just down the road. Now, I am not saying that everyone should be buying here but here are the reasons this town made sense for me:
There is a strong rental demand (this is obviously helpful when buying a buy to let)
There are good train links into London
There are several large organisations based in the locality
The town has a very strong economy
I used to live there, so I know the town well
And the biggest point, I could afford something here
I decided that I wanted a flat (less things to go wrong), not a house. And I wanted a share of freehold if possible as I have owned flats in the past and found that management companies (if run externally) can rip you off. Location is really important to me, so I opted for the ‘better’ end of town, albeit the trade-off was that what I could buy would be smaller than the other end of town.
And so, I have ended up with a one bedroom conversion flat, two minutes’ walk to the town and five minutes’ walk to the station. It’s definitely bijou but I would happily live there and if I would live there, I am guessing other people would want to as well. It comes with the additional bonus of having a tenant who wants to stay on so it should be income producing from day one plus there is no chain which helps with my April deadline.
So there it is. Nothing racy, but hopefully a solid little investment which will do all the things I want it to.
In other news:
NatWest texted me to say they are sending me a debit card – I guess this means I now have a bank account?!?!?!
I don’t know my bank account details (assuming I now have said account) so still can’t give Paragon the direct debit mandate and get my offer
I am still to go through the legal pack and send my solicitor money so they can get cracking – terribly tardy on my part. I have been (if I am brutally honest) far too busy having a fabulous Christmas to do this but I will make this a priority when I get back from my new years’ break… I am heading down to Cornwall in the morning where I will be greeted by 60 mph gales and torrential rain having just spent six hours in the car with two children. Yes, you are right. I must be flipping mad. Still am sure we will ‘laugh’ about it in years to come.
Diary of a Buy to Let Purchase
Follow Jeni as she recounts her experiences of becoming a buy to let investor for the first time.
29th December 2015