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  • Buy-to-Let

    "Cheap is often expensive in property" - Paul Shamplina

    The above quote was from Paul Shamplina of Landlord Action when talking about landlords who seek the cheapest option for products and services in property and buy to let.

    [Image: cheaper.jpg]

    In property, it being your greatest asset, its a good idea to stop thinking of price and start thinking of "value" imho.

    It's vital to always crunch the numbers, as numbers never lie.

    The cheapest option may not always be the best and it can turn out to be far more expensive in the long run, than using a slightly more expensive option.

    In the context of lettings agents fees:

    "A Letting Agent is worth 10% of my annual rent to get back 90% of the time I spend on my properties". - Mary Latham

    EasyProperty 3% full management fee

    In the context of property deals:

    Stop BMV greed. Start yield hunger.

    The NMD deal which probably won't turn out to be one

    What's your BMV?

    In the context of mortgages:

    The lowest rate mortgage may not be as inviting as it looks, as it may have large fees attached to it.

    Would be interested to hear other people's views on this as to whether "you get what you pay for" in property, just like any other sector?

    [Image: B_FxcCkUoAA1xzK.jpg:large]
    I understand Paul`s sentiments.
    Cheap has several emotional connotations though -
    good and bad.
    We sometimes associate it with the phrase `cheap and nasty` meaning something is cheap but not good quality. Maybe a false economy etc. But cheap can mean good value as well.

    I kinda like cheap . In my LHA world I like cheap properties with cheap kitchens and cheap bathrooms.

    Cheap gives me quality cash flow

    Jonathan Clarke. http://www.buytoletmk.com

    I agree there is a balance to be had JC.

    But cheap properties with cheap kitchens and bathrooms may throw up more problems - like rent arrears and breakages - than more expensive options.

    Obviously you know your market inside out and you have contingency for this.

    No doubt it is horses for courses, but I still maintain to look for "value" not "price".

    A slightly more expensive kitchen may be more robust and last longer than a cheapie kitchen?
    Absolutely; I completed some market research on "fee free brokers" and its quite shocking the upsell you receive and couple a "no fee" broker with a low value property purchase and you soon find out there are no mortgages. Shocker!

    Its not as simple as cheap v expensive.

    As the UK becomes more interconnected; you can get better value of money or lower cost services depending on the location of the service you hire.

    If we think about services, a northern tenant referencing company will spend less on wages and rent than a southern tenant referencing company. You pay for instance £60 to each but the northern company can have greater margins due to lower overheads - does that mean more and thorough checks or can it mean "cheaper" costs for the landlord.

    I have some empathy for our southern mortgage broker competitors; based just on rent alone never-mind the need for higher support staff wages, business rates. They get paid the same as me from lenders can only mean higher upfront costs or lower service or higher case load.


    @Vanessa you discuss cheap properties v expensive ones. In the context of the north that means a higher rental yield, nationwide it also means less void periods as there is a higher demand for lower rent. With the cheaper kitchens and bathrooms cheaper to maintain or replace - as we know no matter the value tenants damage things.

    A more expensive kitchen "may be" more robust or it could have been overpriced by the salesman. A cheap kitchen, perhaps due to low cost you purchase some backup stock.

    Its very easy to waste money on expensive things and overstretch your budget; as we often see on housing TV Programmes. In the context of landlordism the trend i imagine would be on low cost fixtures and fittings rather than expensive ones.

    Especially when we put "wear and tear" into context of deposit protection, they expect some damage which can not be re-couped.

    Back on to Paul Shamplina of Landlord Action; can I presume he is on about professional services? .. Its never unwise to hire the best legal representatives in your budget compared. The judgement of the UK legal system is often won by those with the biggest budget, not the most cost efficient.

    Its a bit complex but as a northerner I dont do expensive.


    YOU CAN REACH ME AT BESPOKE FINANCE for HMO Mortgages, Cheap Life Insurance and Limited Company Buy-to-Let on 08009202001

    Thank you Adam. Useful additions.

    I think the bottom line is again ... due diligence and research.

    You may be able to find a better quality kitchen for the same price as a cheap kitchen, if you do some research.

    You are absolutely right that landlords should be mindful of costs and have clear budgets in mind, and understand the numbers.

    Over-spending is a schoolboy error and could take months, if not years, to recoup.
    Best cheap we ever did was vinyl floor tiles - 4 for a £1.00 from Poundland, took an afternoon to put them down but they were still in place three years later when we sold the flat. Think they will out live the lease on the flat Wink
    I like cheap!
    It depends on how you interpret cheap, I would like to say shrewd.

    A silly example but it proves my point quite well, I went to hombase this morning to buy a paintbrush. When I saw the price of the brushes I went next door to a pound shop and bought a perfectly adequate paintbrush for less than a third of Homebase's price. I used it this afternoon and it was fine. That's shrewd and there is £2.50 more on my bottom line as a result

    We are all enslaved to the budget sheet
    Tenants sourced on the cheap are the biggest risk to LL
    So why not carry out a RGI check and save yourself from being lumbered with ostensibly cheap tenants that can easily become very expensive ones!!!!!!!
    After all a RGI reference check can usually be cheaper than normal referencing!
    Avoid cheap tenants at all costs unless you can afford the losses they have a propensity to cause!!
    Cheap is often not the best.
    A good agent is best help to any landlord.
    However, sometimes you can pay through the nose for an agent and get a really poor deal.
    Reccomendation is the key personal recommendation or reviews.
    As for cheap kitchens .. They fall apart.
    Cheap paint needs 2 coats.
    Thanks for all the responses.

    This is developing into an interesting discussion. Smile

    It seems that we, as landlords, need to know the times when it is appropriate to scrimp and save, and the times when cheap is NOT best.

    With regards to lettings agents, I agree that cheap is very often not best - see

    12 questions to ask to vet a lettings agent

    See also - The best money you have ever spent in property?

    With the point on kitchens, "cheap kitchens fall apart". Yes that's true but I would consider a kitchen to be 'almost' a disposable item these days.
    It depends what sort of property you have and who your target tenants are but expensive kitchens get marked and knocked about too, and they go out of fashion. I don't see price as being a very good indication of quality.

    New tenants don't see a cheap kitchen they just see new modern kitchen when they come to view.

    With most new kitchens the big hidden cost is built into the installation in most cases. If you don't believe me look in the kitchen section of the Ikea catalogue (you do have one I presume). Almost every kitchen costs more to install than to buy.

    That's absolutely ridiculous! most of the work is semi skilled at best, assembling flat pack furniture isnt hard. The skilled work like plumbing and electrics is usually charged extra on top in any case. You can get the work done a lot cheaper if you deal with it youself, assuming you know how to.

    People agonise over choosing a kitchen and its costs but then just accept the installation cost without question. Being able to do a lot of the work yourself or having the mythical trusted odd job man is a real bonus.

    In this business, you have to manage the costs.

    I visited a property a couple of weeks ago which had just been refurbished and was going to viewings in a couple of days. The owner is a friend and has had the flat for years, showing me round the finished flat she commented the new kitchen had cost £7K.

    I would have budgeted £2.5K for a kitchen like that