SMF - Just Installed!

New Builds - Haggling

Started by 501C, August 23, 2015, 06:23:10 PM

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501C

Hi

Considering buying my first buy to let property and looking at new build apartments in city centres Looked at all the brochures and options with some offering assured Yield percentages for fixed period of time etc.

The agents seem to indicate that these properties are selling really quickly (which I probably part of their sales pitch)

Someone advised I should try and haggle. (something I have never been very good at, even for handbags or little things when in markets abroad where it is expected)

Is it likely that they will negotiate on prices for new build ? Should I try making an offer at a lower price or try to ask for better deals ?

Thanks

Hippogriff

Always haggle.

Even just prior to the crash of 2008, when it was all up-and-up and optimism everywhere, I managed to get 5.3% off a city centre apartment when they were, apparently, going like hot cakes. However, even though I still own that, I look back upon my purchase as the worst investment I made. I warn you against it. It will be leasehold, right? It will come with a variable service charge, right? Are they touting the apartments as being for high-flying professionals? It could be full of students in no time. Just beware.

Nothing wrong with modest freehold, no service charge, houses. That's where all my focus is. I can sell you a stonking apartment, 26th floor, for little profit if you're interested... high spec., brings in £1,100 per month. Two bedroom, high quality fixtures and fittings, floor-to-ceiling windows. It's just not for me (incredibly low maintenance, though).

501C

Hmmm OK
Thank you very much for the reply. 
Got some thinking to do!

Hippogriff

Indeed. What are you looking at? Care to post a link, don't worry I won't become competition.

501C

I was looking at two potentials, Victoria House Leeds and Bridgewater point Manchester (they are on Right move) but I've now added a few more(Leeds/Manchester) options to my list of considerations.

I may still be thinking/considering/procrastinating this time next year!

Hippogriff

Kinda OK. Just be wary. I bought here - https://en.m.wikipedia.org/wiki/St_Paul%27s_Tower - it pays for itself, and then some, but I would now much prefer houses.

PM me if you want to train your eye on Sheffield... ha!  ;D

Hippogriff

P.S. - regardless of my advice about buying apartments, do buy something... don't hang around.

501C

Thanks - I will have a nosy.

just thinking for first investment, these seem like a good option to ease myself in and learn the ropes!

Sheffield a bit out of my way I'm afraid.

Hippogriff

Yes, that's what they want you to think. Then the Service Charge will start rising waaaaay above inflation and your rent won't match pace. If there is no haggle, walk away and don't think twice. Remember, to them, you're just another mark. Pre-2008 5% and nothing now? That doesn't sound right, does it? The market is recovering... it's not recovered and it's not the same heady, rash, champagne-fuelled, optimistic environment as it was back then.

Go back in and get yourself a good deal, but don't pay list. They'll be telling you you've made a great decision and be high-fiving each other as you walk out of the sales office / marketing suite. I'm only telling you this 'cos I've been there. Good luck... can sense you're still tempted. The investment never evaporates to zero!

501C

What about 'off plan' - I should still be able to negotiate price shouldn't I?

Got one agent saying ,,,,,,
Sadly the off-plan market doesn't work in the same way as the existing property market.  With quick sales taking place and only buying the one unit you have 0% chance of getting a discount
But they might (sounds a big might) be able to see if they can contribute anything.

Are off plan apartments prices non-negotiable or is he trying to keep me paying full price?

Hippogriff

Of course, mine was off-plan. Makes no difference.

Of course he's trying to keep you paying full price... he thinks you're wet behind the ears.

theangrylandlord

Hi Hippogriff

I am an experienced Landlord but I've never bought a flat always houses.
The problem is after aggregating a few the maintenance and management gets to be a bit of a drag (and I work full time also) and so I was looking at moving to flats in central London as a low hassle way of Landlording.  Also the yields in my area for houses are falling due to the increase prices but middling improvement in rental

Am interested in your posts that suggest this is not the way to go?

What has always bothered me is the ground rent/maintenance aspects which I have no idea about.
Are you able to give some idea of how much those things escalate and eat into your margins?

What other pitfalls are there about flats vs houses?
Can I also safely assume the guaranteed rent deals on offer are a total waste of time?

Thanks in advance for the advice



Hippogriff

Service Charge on my apartment rose 32% one year. All the owners kicked-off about it, the Management Company admitted it was down to their poor budgeting... it changed nothing, it still rose by that amount. Then 7% the following year. You have no control over it. I doubt rent can keep pace.

Guaranteed rent... hmm.

johnwhitfield

Hi
I'm new to landlording (and this forum). I'm thinking of purchasing a new build in Liverpool, and my idea is to sell just prior to completion in 18 months. Any advice, pitfalls with this idea?

Regards

Hippogriff

What if there's an economic crash and the price drops, significantly?

Pitfall enough?

theangrylandlord

#15
John Whitfield
Hippo has not pointed out a pitfall -- its a black hole.
If you can't work that much out then are you sure you should be doing what you are planning on doing?