Why I think Vanilla Buy to Lets are still sexy!

The buzz words at present when it comes to property investing are Serviced Accommodation, HMO's, Multi Let, Commercial Conversions and Commercial to Residential. These are all amazing strategies and will certainly help you accelerate your returns or take your property career to the next level however, Single (Vanilla) Buy to Lets are still sexy and have a number of benefits that I would say far out way the negatives.

Firstly, when I talk about Vanilla Buy To Lets I'm talking about a 2 / 3 bed house that are typically terraced houses of the Victorian and Edwardian era (you know the ones) or semi detached, detached houses and bungalows. Flats also fall into this category but for me I focus on houses.

The term Buy To Let (BTL) is used for a single dwelling rented out on 1 Assured Shorthold Tenancy (AST) agreement to a single person, couple or family where the rental payment received monthly covers your mortgage and other operating costs like a letting agent fee, insurance, maintenance and hopefully if you have bought right gives you a little profit at the end of the month.

What are the challenges?

• Income - Other strategies like HMO's and Serviced Accommodation can and will earn you more cash flow
• Voids - Unlike a HMO if your tenant leaves you will have an empty property earning you no rental income until you find a new tenant. This could be months. In a HMO you will still have other tenants paying you.
• Removal - Getting people out can be challenging if it goes wrong but this could be the issue with any tenant and investment strategy really
• Tax - With the introduction of section 24 those landlords that are higher rate tax payers and have BTL mortgages in their own name will be paying more tax
• Arrears - If you tenant goes into arrears you will still have to pay the mortgage
• Annual Checks - You have to ensure that the property has an annual gas safety check, electrical check and insurance
• Deposits - Deposits have now been capped to 5 weeks so no longer can you add extra deposit for animals etc
• Volume - Obviously if your planning to retire early through single BTL's you will need a lot more properties

Are there any pro's to owning a Single Buy To Let then? Hell Yeah.....

• Strategy - This is a great strategy especially if you are starting out or looking to build or grow your property portfolio. Winning...
• Stock Levels - There are over 25 million houses in the UK of which 59% are terraced houses or semi detached. This gives you more choice and allows you to negotiate better discounts or move onto the next one quickly. Winning...
• Demographic - You can open yourself up to a wider demographic of tenant and depending on location you can almost choose your demographic. Winning...
• Demand - Due to a housing shortage and not enough new homes being built the demand for 2 / 3 bed houses is growing. Winning...
• Entry Point - You can pick up a 2 / 3 bed house for as little as ￡50,000 - ￡70,000 in my target area (Blackpool) which means your entry costs are low and you don't need massive deposits. Winning...
• Mortgages - Buy to Let mortgages are easier to get (subject to criteria) and there is more choice and products available. Winning...
• Regulation - Less regulated that other strategies (like HMO'S). Winning...
• Refurbishment - A refurbishment on a 2/3 bed house is less than a HMO for example and a lot easier to manage (I would always suggest getting a Project Manager to manager). Winning...
• Issues - As you are generally only dealing with 1 tenancy there are less issues than a HMO or other strategies. Winning...
• Speed - You can add value and also scale it quicker. Winning...
• Set, Let and Forget - One you get going get a a good management team in place and once you have let you can almost forget. Winning...
• Time Poor - If you are time poor then a single BTL is a great starting strategy. Winning...
• Cash Flow - We recommend that you should be aiming for ￡250 a month cash flow. If you had 10 single BTL’s that net ￡250 cash flow each a month. That’s around ￡2,5k a month coming in, after all voids etc which is more than the average UK wage. Winning...
• Running Costs - Generally lower running costs as the tenant tends to pay for council tax and utilities. Winning...
• Tax relief - you can get tax relief to cover renovations and repairs. Winning...
• Safe - Safer long term investment. Winning...

Personally, I think your regular Vanilla Single Buy to Lets are a good solid foundation for any portfolio and they work amazingly not only for beginners but also the more experienced investors who can add them to there bigger and more riskier strategies.

It's not an easy strategy and things can go wrong so as long as you have done your reserach and due diligence, negotiated the offers and bought right, refurbed to a good standard and refinanced then they should be in a good order and not need a major refurb for a few more years.

I have a BTL portfolio and continue to add these style properties to my portfolio and for my investors.

If you are interested in starting a property portfolio or would like further advice on this strategy then get in touch. [email protected] and lets show you how Single Buy to Lets are sexy..

Buy To Lets - They're sexy and they know it..