Jump to content
House Price Crash Forum
Drummer

Cheap houses do exist

Recommended Posts

1 minute ago, Drummer said:

Have a look at this:

http://www.rightmove.co.uk/property-for-sale/property-45359487.html

House in Burnley for £25k. Many have sold round there for less than that. Rent is circa £325pm. Therefore a gross yield of over 15%. Surely a slumlord's dream?

Not too big a risk for a BTLer?

The welsh valleys have areas with similar prices ..houses and rent, the problem arises IMO when the LL gets a large bill i.e boiler needs replacing ...there goes the best part of a years rent also the tenants in such ares tend to be far from "model tenants" coupled with maintenance hungry 100 plus year old houses ....the appeal is not just a high% yield   

Share this post


Link to post
Share on other sites

This place sold for 48.5k in 2006. I thought the 118 tales of falls over the past 10 years were an exaggeration.  Probably snapped up based on yield % by someone with great business acumen and a mathematical mind. 

Cracking investment. Depreciates like a car. 

Share this post


Link to post
Share on other sites
8 minutes ago, ThePiltdownMan said:

Could it be there's some dodgy accounting or money laundering going on in this area. https://houseprices.io/?q=Grange+Street%2c+Burnley

Looking at 2007 prices they are going about it the wrong way...... just a random house number https://houseprices.io/?q= 34+Grange+Street%2C+Burnley%2C+BB11+4JZ

Share this post


Link to post
Share on other sites

If you go to Streetview via the Rightmove link in the OP there are lots of boarded up houses on that street. Looks like a dying neighbourhood.

Share this post


Link to post
Share on other sites
8 hours ago, long time lurking said:

Looking at 2007 prices they are going about it the wrong way...... just a random house number https://houseprices.io/?q= 34+Grange+Street%2C+Burnley%2C+BB11+4JZ

Registered sales for your example....all over the place: 

01 May 2014£23,000

20 Nov 2012£14,950

28 Nov 2007£42,000

24 Apr 2007£39,000 *

21 Jun 2006£49,000 *

20 Mar 2006£34,000 *

04 May 2004£20,385 *

 

It is almost as though some investors are buying houses based on rent  v mortgage payment without a clue what the value of the underlying asset is worth. And reinforced by Dorkins comment re boarded up houses on the street view.  

Many who look at London etc think that this couldn't happen in place like London where there is a true underlying high value to property. I agree there is a true underlying value (and much higher than these in Burnley) but absolutely nowhere near where we see prices at the moment. 

Share this post


Link to post
Share on other sites

There is, and has been a lot of cheap property in Burnley & surrounding areas - plenty of it a lot cheaper than this. With yields of typically 10-15%, on paper they make quite interesting investment prospects - however they're risky for a few reasons: 

1. They tend to be rough areas that attract the sort of tenants you're liable to find on Britain's benefit tenants - the sort of young professionals so beloved of BTLers won't be queuing up to live there.

2. Because of 1, the odds on the landlord getting the rent paid reliably aren't great. 

3. The chances of repair costs through damage to/neglect of property are well above average. 

4. Chances are these older terraces will need capital expenditure sooner rather than later. 

5. Unless there's significant regeneration of the areas in question (not likely) the chances of capital growth through HPI are near zero. The ceiling price on such properties are typically £35-45,000 tops. 

Bearing the above in mind, unless you're very careful/lucky - the odds on getting a decent return on your investment are pretty poor to non existent. 

Buying as an OO as do-er uppers, they can make sense if you're prepared to be careful about how much you spend & can live with the potential downsides of the area. The differences in price between older houses & new builds are genuinely hair raising. 

Share this post


Link to post
Share on other sites
16 hours ago, Drummer said:

Have a look at this:

http://www.rightmove.co.uk/property-for-sale/property-45359487.html

House in Burnley for £25k. Many have sold round there for less than that. Rent is circa £325pm. Therefore a gross yield of over 15%. Surely a slumlord's dream?

Not too big a risk for a BTLer?

I guess it's fine if you wish to live under Sharia law. 10 mosques within 1.2 miles. Maybe White in-flight is needed.

Share this post


Link to post
Share on other sites

I can see "value" for a FTB OO who needs somewhere to live. I fully agree that the maintenance costs can (will?) be higher due to the type of property and likely tenant. Additionally I also agree that rent voids/delays would occur more often.

Saying that, you get Premiership football on your doorstep and nice walks in the Pennines are not far away. Manchester is 27miles away (45mins according to google) in case you actually need to work!

Share this post


Link to post
Share on other sites
1 hour ago, Drummer said:

I can see "value" for a FTB OO who needs somewhere to live. I fully agree that the maintenance costs can (will?) be higher due to the type of property and likely tenant. Additionally I also agree that rent voids/delays would occur more often.

Saying that, you get Premiership football on your doorstep and nice walks in the Pennines are not far away. Manchester is 27miles away (45mins according to google) in case you actually need to work!

I live 9 miles from Burnley in a house that cost £30,000 - so my comments on OO are based on my own experience. FWIW, while I'm not going to claim that East Lancs is the perfect place to live - it does have plenty going for it. 

Older houses are definitely more expensive to heat compared with new builds as they are usually less well insulated and if you try to add insulation then condensation damp becomes a risk if you're not careful as older houses need to breathe. After that the main occupational hazard is whether the "once in a lifetime" jobs like rewiring, reroofing, etc need doing & if so when. Two or three big jobs like that in quick succession will eat any savings pretty quickly & chances are a very cheap house will need 1 or 2 at least. If you can do that sort of work yourself &/or have contacts & don't mind living in a building site from time to time - then its not that big a headache TBH. As I see it, its far better than throwing money at greedy banksters/developers/scumlords (delete as appropriate) to have somewhere to live. 

Share this post


Link to post
Share on other sites

At first I thought it was where the race riots were a few years ago.  Actually it isn't.  It's within walking distance of a rail station which takes you to Manchester, Leeds, and Preston.  Also few minutes' drive to M-way junction of M65.

So not bad location for getting out the place.

Down on Trafalgar St you have every junk food outlet you could dream of, Macdonalds, KFC, Wock noodles, Pizzahut takeaway, Greggs, Subway etc.

It's not exactly young loves' dream round there though.  I can't see many young ladies being swept off their feet when they see their new home :)

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   214 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.