should i invest in manchester?

[chip]

hello,

I am about to go into my final year at university. I currently own a 2 bed 2 bath flat in the M1 area which has been letted until next july. There is no mortgage on this property (a gift from my parents who tend to invest in commercial properties). Judging from what ive seen i would say the flat is probably worth between 135-145k.

ive made an offer of 135k on a repossessed flat, (2bed 2bath 2balconies ) again in the M1 area which has been accepted. I will be living in this flat along with a friend until next july after which my sister, who also studies in manchester would be more than happy to rent the following year.

my main concern is the strength of the letting market particulary in the m1 area. there are new builds going up everywhere.

should i invest in the m1 area?
how is important is parking?

many thanks and excuse my inexperience

[numericalexampledotcom]

Sounds like a good investment, especially because you are kind of certain that you can rent it out.

[ArmchairInvestments]

Have you checked the local rents? I think you are right to be concerned about future yields particularly as there are a lot of new build properties on the market in Manchester which may bring them down due to over-supply. Head to the 'Rightmove' rental section to look for comparables and also call local lettings agents.

[shingfieldestateslimited]

Hi there.

Your right to be concerned, there are lots of new flats going up all the time in Manchester, and everyone would always prefer to rent or buy a brand new one, rather than a second hand one. Does the flat your buying have a unique selling point? like being above the hilton or internal features like beams? The more selling points the better, two balconies sounds like a good start! Parking is always a good one. If you have parking, anyone can rent it, if you don't it will significantly limit it. Being M1 will help as its close to buses, trains and trams. Also look at the service charges, they will eat up lots if not all your profit until rents rise substancially.
ALWAYS REMEMBER to have an exit strategy, if you need to sell it will you be able to? Nothing is selling at the moment and flats are selling even slower, if you can buy houses rather than flats, you will be better off in the long run, but its ok to have a mix in your portfolio. I have alot of people trying to sell me their flats, but they have negative equity and are going to struggle for years to come. There is a reason why there are alot of cheap flats out there!
Good luck with it
Cheers


Jonathan Shingfield

[jennyhicks]

135k for a 2 bed, 2 bath, 2 balcony flat seems like a good price. Like Jonathan Shingfield wrote, the more usp's the better and the impact of parking is totally dependant on the location of the flat to a pulic transport network. Knowing the target market for the kind of people who would eventually either rent or buy the property should be thought of as well. I do believe that people should think of buying property such as this for the long term. You seem to be in a good position in that you would be living in it for a year then your sister.

[wellwellwell]

A friend of mine is projecting 30% drops in manchester over the next two years... before returning to current rates over time.

[coggy]

Sounds like a good area for letting, just make sure you purchase at the right price. We are firmly in a buyers market and because things could get worst it means you can pick up absolute bargains.

Once confidence is slightly improved it's a lot harder to get such good deals, you only know it's bottomed when we are on the way back up.

If it's a long term investment then now is a good time to pick up the bargains before the herds return.

We have many clients at the moment filling their boots who have built up capital to invest for the long term so they can sit on a tidy portfolio ready for when we start the next upside, the predicted further falls are not a concern because the investments we provide for them are well discounted on today's values.

You should be fearful when people are greedy and greedy when people are fearful (Warren Buffet)

Think about it !

[jamesww]

You show wisdom with your concern. Any area with alot of new builds takes a hit on rents when all the properties come on line. This event occurs in even the strongest economies. I would choose to pass on this opportunity.

To address your question on parking I would say that the availability of parking is very important perhapse one of the most important issues for flats. Even if people do not need parking they always want to have it because they keep resale in mind.

[CoolerUK]

definitely pass on it

[jessicatam]

If it doesn't have parking nearby, I'd pass.

What are the current rents? Could you still make a decent return even if the rents dropped significantly?