Podcast Summary
Considering the cost of extending a short lease term: When buying a flat with a short lease term, factor in the potential costs of extending it before it reaches the 80-year mark. Consult a solicitor or surveyor for detailed advice.
When considering purchasing a flat with a short lease term, it's essential to factor in the cost of extending the lease as the term approaches the 80-year mark. Tom from Manchester asked for advice on this issue, as he and his partner were looking to buy a flat in Stockport with an 89-year lease term. They planned to hold the property for the medium to long term, but were concerned about the potential costs of extending the lease. Rob and Robert, the hosts of Ask Rob and Rob, emphasized that when lease terms drop below 80 years, the cost of extending the lease can increase significantly due to marriage value. They didn't provide a specific minimum lease term to consider, but suggested that buyers should start negotiating on price when lease terms are close to the 80-year mark. They also encouraged Tom to consult with a solicitor or surveyor for more detailed advice on the specific property in question. Overall, it's crucial for buyers to carefully consider the potential costs of extending a lease when purchasing a flat with a short lease term.
Considering a long lease length for property investment: Look for properties with a lease length of 125 years or more to ensure salability and avoid potential expensive lease extensions.
When investing in property, considering the lease length is crucial. The expert suggested looking for properties with a lease length of 125 years or more to ensure salability and avoid potential expensive lease extensions. After 25 years, a property with a 125-year lease would still have a 100-year lease remaining, which is widely accepted. However, starting with a 100-year lease would result in a shorter lease term after 25 years, potentially causing challenges and higher costs due to lease extensions. The expert plans to discuss this further in a future podcast, as it becomes more expensive to extend a lease when it's under 80 years.
Plan for a lease extension before it drops below 80 years: Initiate lease extension around 82-83 years for properties with short leases to maintain property value and potential investment opportunities
If you own a property with a short lease length, specifically around 89 years, it's essential to plan for a lease extension before it drops below the 80-year mark. This process can take some time, so it's recommended to initiate the extension around the 82-83 year mark. Although the value of a property with a shorter lease length isn't significantly affected, it will still have a lower value compared to a property with a longer lease. However, if you're comfortable with the cost and process of extending the lease, it could still be a worthwhile investment. Additionally, properties with extremely short leases (below 80 years) can present opportunities for buyers to purchase them at a lower price, extend the lease, and restore the property's full value. Keep in mind that these are estimates, and individual circumstances may vary.
Investing in Properties with Guaranteed Yields: Proceed with Caution: Be wary of investments in properties marketed with guaranteed yields, as sellers often profit from commissions and rent, leaving investors to bear the costs. Consider the resale market carefully before making a decision.
Investments in properties marketed with guaranteed yields, such as student pods and hotel rooms, can come with high commissions and potential risks. Rob cautions against these types of investments, as the sellers are making money off the commissions and the guaranteed rent, which ultimately means the investor bears the cost. He also questions the resale market for such properties and encourages careful consideration before making an investment decision. Rhys's question touched on the opportunity versus challenge of investing in various property types, and Rob's response highlighted the importance of understanding the true costs and potential risks involved.
Investments with aggressive marketing and rental guarantees can be risky: Be cautious of investments with aggressive marketing and rental guarantees, as they may lead to poor results and potential double losses if guarantees aren't honored.
Investments with aggressive marketing and rental guarantees, particularly those targeted towards UK investors but popular in overseas markets, often yield poor results. These investments are typically geared towards hands-off investors with big promises, but the reality can result in a double loss if rental guarantees are not honored after a few years. It's important to be wary of investments where the seller is pushing hard, as this could be a sign of potential red flags. Additionally, a lack of engagement with industry resources like the Property Hub Magazine is another potential warning sign. Ultimately, it's crucial to approach investments with a critical and informed mindset to avoid potential pitfalls.
Investing in Property Hub magazine for real estate knowledge: Sign up for Property Hub magazine for affordable, high-quality real estate knowledge. With subscribers doubling last year, it's a valuable tool for industry professionals.
Subscribing to the Property Hub magazine is a valuable investment for anyone interested in real estate. The speakers emphasized that it's not just about the low cost of £5 per copy, but the guaranteed return on knowledge that comes with it. They claimed that the magazine's popularity, with subscribers doubling last year, speaks to its high quality. The speakers, Rob and [Name], are passionate about the magazine and view it as an essential tool for those in the property industry. They encouraged listeners to sign up and stressed that the magazine is not only informative but also a beautiful product to receive. Overall, the Property Hub magazine offers a cost-effective and effective way to expand your real estate knowledge. To get started, visit propertyhub.netforward/magazine and sign up today.
