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TimG

Does This Stack Up?

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multiple occupancy rules

in poor repair

purpose built student blocks on their way

cashing out

no growth - at those prices, the yields are already unattractive without pricing in doing work

the only use for them is as is is student or DSS bedsit style living - otherwise it's convert to flats - expensive to do or convert to offices, crap yields or knock it down to put up new 'executive' apartments.

I can imagine the nightmare of 29 students all being annoying tenants - the squabbles, the drunken mess, the PITA and the precious parents. I'd forget it at anything like that price....

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Wow, that second one looks like an absolute dump!

Yes and at the asking price with the rental income that's a 7.8% gross yield. Then you'd need the 130k deposit and who knows how much cash on alterations to the property to ensure it meets the HMO regulations. Plus 29 students to manage and get rent from etc. Is that worth 2% more than just sticking your cash into tax free savings (e.g. NSI) ?

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Yes and at the asking price with the rental income that's a 7.8% gross yield. Then you'd need the 130k deposit and who knows how much cash on alterations to the property to ensure it meets the HMO regulations. Plus 29 students to manage and get rent from etc. Is that worth 2% more than just sticking your cash into tax free savings (e.g. NSI) ?

Looks like a lot of hassle for a marginal return unless you believe Nottingham is the place for massive capital growth. I would also suggest the repair bills could be high. Perhaps these should be offered to a tv programme?

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Looks like a lot of hassle for a marginal return unless you believe Nottingham is the place for massive capital growth. I would also suggest the repair bills could be high. Perhaps these should be offered to a tv programme?

I think Nottingham has gone. Alot of rentals offering a months free rent, loads of places on the market NO CHAIN. Prices are dropping as well. Lots of new builds not selling. I can hear alot of sqealing pigs.

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HMO rules probably, if 4 or more people live in a property with 3 or more floors from 2 or more families the landlord and property needs a licence. The propery needs a certain proportion of bathrooms, a sink in every bedroom, living areas, kitchens and floor space in relation to the number of people living there. These properties would fail, before last year you could house 16 students in these properties now the legal limit it 3. Landlords are also legally reposible for the well being of the people who live in HMOS, landlordsneed to pass a police check and need to ensure everyone in the house gets on with each other and settle discputes aimicably. If the landlord doesnt act like a parent they can incurr massive fines/legal action. Student houses accross multiple floors or converted terraces with attics are suffering.

Crazy and energy inefficient, its much more ecological if people share and live together..

Edited by moosetea

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Yes and at the asking price with the rental income that's a 7.8% gross yield. Then you'd need the 130k deposit and who knows how much cash on alterations to the property to ensure it meets the HMO regulations. Plus 29 students to manage and get rent from etc. Is that worth 2% more than just sticking your cash into tax free savings (e.g. NSI) ?

hmmm doesnt seem so bad if you actually think it through - remember, think longterm!!!

So that 100,000 a year coming in covers the repayments. 1,200,000 loan over 25 years at 6% gave me 7731.62 in the beeb calulator. You even have some left to cover ongoing costs.

So in 25 years time, assuming 0 HPI (unrealistic in the long run but for the sake of argument), you now own a 1,300,000 house. You sell it - a tidy nest egg. OK yeah yeah tax blah, no prob just live in it for a week before you sell ;)! BUt seriously there are ways to reduce the bill and I bet the allowance will be pretty high in 25 years time!!

Now compare with sticking 130k in the bank for 25 years at 5%!! Hmmmm. Lets get my calculator. 130 * 1.05, repeat 25 times... I make that about 450k. Kinda a big difference, and thats forgetting that actually the price will rise in 25 years, immediate crash or no, and rental yields will also rise too. In reality someone's gonna make a mint!

You know I well understand the idea behind not wanting to buy an overvalued house (which is why I advocate shopping around and buying one of the many bargins out there - yep even now!) but the reality is in the long term buying will be the better choice. The longer you wait, the less financial sense it makes, even with high prices! Im no fan of HPI but lets not twist reality to justify our own ends.

In the above example our high inflation will mean that the rental yield will go up in the longterm - when a loaf of bread costs a tenner you can be sure rent will have risen! Yet that mortgage loan is fixed. You borrow expensive pounds and pay then back with cheap ones earnt in the future when inflation does its stuff. Seems attractive - no?

Yep it seems like hard work to me, and it wouldnt be something id buy into, but someone will make money from that venture, as long as they can afford it of course... :)! Good luck to them I say. And when they are enjoying the fruits of their labour, and we're freezing in our council flats - we will know why ;)!

Edited by Orbital

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hmmm doesnt seem so bad if you actually think it through - remember, think longterm!!!

So why aren't you buying it if it's such a great deal?

In the above example our high inflation will mean that the rental yield will go up in the longterm - when a loaf of bread costs a tenner you can be sure rent will have risen!

If a loaf of bread costs a tenner, how are people going to pay inflated rents? Oh, you think we're going to see wages rise by a factor of ten while we compete with Chinese workers on $0.50 an hour.

If, as seems more likely, wages stagnate while prices of essential items inflate, rents are going to collapse along with house prices.

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I can almost see my balcony in the 2nd one!!

Thats my local cob shop in the picture.

The picture makes it look very bad!!

There's more "young professionals" in these flats than students.

Its a bit too far to uni, for alot.

£1.3M....interesting, thats well above the going rate. The one I rent went for £155,000, and its one of the bigger 2 beds.

EDIT: The units for sale are in the old buildings. My post is with reference to the new one you can see behind. (That makes the £1.3M price tag even worse!

Edited by Phlash

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I can almost see my balcony in the 2nd one!!

Thats my local cob shop in the picture.

The picture makes it look very bad!!

There's more "young professionals" in these flats than students.

Its a bit too far to uni, for alot.

£1.3M....interesting, thats well above the going rate. The one I rent went for £155,000, and its one of the bigger 2 beds.

EDIT: The units for sale are in the old buildings. My post is with reference to the new one you can see behind. (That makes the £1.3M price tag even worse!

Sorry for being nosy, but how much do you pay? about 450 a month?

The reason I posted this was not because I thought the yield was amazing, but that it seems a lot better than anything seen recently.

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Sorry for being nosy, but how much do you pay? about 450 a month?

The reason I posted this was not because I thought the yield was amazing, but that it seems a lot better than anything seen recently.

The yield is always pretty good with students....they never barter.

I pay £560, previous tenant was paying £650. But I'm in something very different to whats being sold there.

Thats student accomodation.

The Landlord for my place isn't getting enough to cover the interest on his mortgage!

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The yield is always pretty good with students....they never barter.

I pay £560, previous tenant was paying £650. But I'm in something very different to whats being sold there.

Thats student accomodation.

The Landlord for my place isn't getting enough to cover the interest on his mortgage!

That's a good deal for YOU! Are they any good? I live round the corner but have never been in them. It's nice that they have balconies. I don't understand how people can build flats without them, which seems very common in Nottingham. I have been informally tracking flats in Lenton for the past 3 years. Rents don't seem to have budged at all from £450 for a modern two bed flat in a small development. Of course, the newer big developments towards Canning Circus/ Park are more expensive. By the way, do you know why the patch of land outside the front of your complex (canning circus side) has been full of crap for the past 3 years? It's really weird; you would have thought that whoever owns it would do something with it.

Also, I assume you have been to the Sainsbury's across the canal in Lenton. I was just wondering, am I the only of who thinks you'd be mad to live in the flats there? Who wants to live in a shitty retail park?

Tim.

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Reading the particulars for the second property the agent notes seem really strange...

Agents Notes:

The residential units are held on assured short hold tenancies commencing from the 2nd September 2006 to the 20th July 2007. 164a is held on a term of 6 years commencing fro the 3rd November 2006. 166a is held on a term of 10 years from the 9th March 2001. Full rental income (including the residential units retaining fees) are £100,000 per annum. Further information is available from the selling agent. The current owners have informed us that they plan to alter the lay-out in 164A in preparation for the September 2007 in-take.

I thought that there where 5 self contained units... not 2. I can understand that the long term leases are on the two commercial units but what is work they plan to do on 164a obviously it is on HMO element but how many units does that part of the property cover?

Hmm I also wonder what the rental split is between the students and the two shops.

Personally I suspect that the alternations needed to bring it in line with current HMO regulations must the extensive (unaffordable?) for the property to be on the market in the first place.

Edited by b0rk

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That's a good deal for YOU! Are they any good? I live round the corner but have never been in them. It's nice that they have balconies. I don't understand how people can build flats without them, which seems very common in Nottingham. I have been informally tracking flats in Lenton for the past 3 years. Rents don't seem to have budged at all from £450 for a modern two bed flat in a small development. Of course, the newer big developments towards Canning Circus/ Park are more expensive. By the way, do you know why the patch of land outside the front of your complex (canning circus side) has been full of crap for the past 3 years? It's really weird; you would have thought that whoever owns it would do something with it.

Also, I assume you have been to the Sainsbury's across the canal in Lenton. I was just wondering, am I the only of who thinks you'd be mad to live in the flats there? Who wants to live in a shitty retail park?

Tim.

I like mine because its top floor looking back down over Lenton, Woolaton Park and Ratcliffe Power Station in the distance, and I get a larger balcony (is actually a small roof terrace). The inside is like all the modern apartments, same appliances as quite a few of the newer developments in the area. The top floor, where I am, are all duplex apartements, and the bedrooms look down into the lounge. Its all quite bizarre!

They don't do balconies in Nottingham, they do Juliet Balconies!! hahaha. ("Have a rail on the outside of your house")

The land out the front is on my "to do" list. Thats probably the maintenance company not wanting to spend money!

The castle marina flats by Sainsbury's are looking pretty expensive too, I wouldn't go there!

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