Yesterday I was one of the guest speakers invited to be on the property expert panel at The Money Show, discussing if it was a good time to get back into property.
There were some really interesting questions asked including should you buy ex council properties in London. My answer was yes because you could pick up an ex council flat for less than £250k in London, with four rooms which you can multi let and get a great cash flow. Often these are in a great location and being ex council usually the rooms are a good size.
However, you do want to make sure that at least 50% of the development is privately owed and you need to be aware that is it difficult to get mortgages on some ex council property particularly if they have balcony access, are high rise or non standard construction.
After the panel discussed a lady approached me and said she liked what I said but that she though most ex council properties were ugly and she would not want to live there. Personally I believe she was making two big mistakes than many amateur investors make which is what inspired me to write this post.
I asked her: “Are you planning to liver there yourself?” She replied “no of course not it is a rental property”. So then it does not matter if she would not want to live there, as long as there is a strong rental demand in the area with plenty of other people who are prepared to live there?
Secondly the outside of the property may not look very attractive. That is not as important as what it looks like on the inside. Most tenants do not care what it looks like outside as long as it is good inside. As an investor it is the numbers that need to work for you.
The lady took on what I said and then asked me “Well what about when I want to sell it on?”.
“Good question” I responded “ But why would you want to sell it if it is making money for you”
The lady agreed and said that she was going to revisit some properties she had previously dismissed because they did not look very nice from the outside.
What are your thoughts on this?