Buying a 2 bed flat leasehold in a building

Discussion in 'General Property Investment Discussion' started by Rohan, Jun 22, 2018.

  1. Rohan

    Rohan New Member

    Hi,

    I am planning to buy a 2 bed flat in a building block purely from an investment perspective, i am completely new when it comes to investment in real estate. hence would like to understand what are the key things that i should keep in mind before deciding and if possible can anyone share what are the key steps in the whole end to end process. What stage iam in: I have done few viewings and have zeroed in on couple for which i would be progressing with the offer. I am going for a cash buy. Is there anything i should check before making an offer?

    Property is a leasehold with 90 years remaining, building is old (1970's) but the flat has been recently renovated.
     
  2. SteveK

    SteveK New Member

    Would check that lease allows flat to be rented out, some blocks do not.

    How much is the service charge? Depends on block size and location but a lot more that £1000 a year might be excessive unless there are reasons such as lift , pool or gym etc.

    Maybe ask to look at last years management accounts to see what was spent on maintenance of building. Ask about any upcoming works although seller should disclose these prior to exchange.

    Does it have allocated parking or a garage?

    Who is the freeholder, private or local council?

    Is it a purpose built flat or house conversion ? Purpose build more valuable and generally better built. With conversions you can have issues with sound insulation.
     
  3. FWL

    FWL Member

  4. Rohan

    Rohan New Member


    Thanks a lot.

    Below is the response:

    - Service Charge: crica £900
    - Seen last 2 years mgmt accounts: circa £900
    - No upcoming work planned
    - Allocate parking: yes
    - Freeholder: Local Council
    - Purpose built flat: Yes
    Remaining Lease: 90 years

    Look forward in hearing your views. I am planning to put the property on rent, what else should i be looking for to make sure i am heading in the right direction.

    Thanks
     
  5. lookinginvest

    lookinginvest Member

    Interesting to see that the local council holds the freehold so in theory there should be no issues extending the lease or even buying the freehold in the future? Assuming the local authorities are as sympathetic to home owners as the government is making out to be when it comes to lease values/options/issues.
     
  6. Rohan

    Rohan New Member

    I am planning to progress with the purchase using a limited company, what would be the different costs that i should expect in future i.e. company tax, etc? Would it cost a lot be a land lord? How would the overall tax or company tax be impacted by me personal income i.e. what could be the maximum exposure for a person who is on high tax bracket?
     
  7. Longterminvestor

    Longterminvestor Administrator

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