Whether you are buying your first home, a holiday home or an investment property, there comes huge financial commitment, and for some, the largest financial investment of their life – stressful times! With such a large financial commitment, you want to make sure you have all the information at hand to guarantee you are purchasing a worth while investment. We here at Davis Brown are here to guide you in the right direction with twenty key questions to ask prior to placing an offer on a property:
What is the Tenure? – is the property Freehold or Leasehold?
What is included within the demise? – demise refers to the premises that has been transferred in the lease. Often a roof terrace may not be demised to the property and can in fact be communal. Make sure you get all the facts! In addition, you may find a storage unit/garage is demised to the property.
What is the length of lease? – having a short lease can at first seem great as the purchase price would seem ‘cheap’ – don’t be fooled! To renew a lease can cost tens of thousands of pounds.
How much is the service charge? – this is a charge made for the maintenance on a property which has been leased. This can sometimes take a large chunk out of your rental returns and therefore it is worth making sure it is not too excessive.
Is there a sinking fund? – a sinking fund will cover repairs for the building. If there is no sinking fund, you might be digging deep into your pocket for any essential building repairs.
How much is the ground rent? – this is the rent paid under the terms of the lease by the owner of a building to the owner of the land on which it is built. This is usually a small charge; however, it is certainly worth taking note of the cost.
Is the vendor in a chain? – if the vendor is buying a property and that sale falls through, would this affect your purchase?
What works have been carried out? – you will get a feel whether the building has been well maintained if external decoration and roof works have been carried out recently. It is important to know when the roof was last replaced, and the external façade was last decorated.
Are there any scheduled works within the building or surrounding area? – if so are these covered under the service charge and sinking fund?
Is the agent or the seller aware of any new developments in the surrounding area? – demolition and extensive development will be noisy!
When was the last time boiler was serviced/changed?
What is the rental value? – it is worthwhile knowing what the potential rental value would be should you ever decide to let the property. Calculation the yield will show you the rate of return on your investment.
What is the EPC rating? – the Energy Performance Certificate shows the energy efficiency rating from A (most efficient, to G (least efficient) and is valid for 10 years. If you are planning on renting the property, landlord would require a property with an EPC rating with an E or above.
Is there scope to extend? – with each extension comes an increased return (subject to current market). With room to extend, whether in the loft, an additional bedroom, garage conversion or another bathroom, having the room to extend maximises the potential growth of your investment.
Where is the nearest train/tube station & bus route? – properties that are located close to transport links come at a premium – but a worthwhile one! Properties that are located within proximity to transport links will always be an attraction should you decide to sell later down the line.
What schools are in the surrounding areas? – is the property set within a school catchment area? Properties that are historically increase in value over time as there will constantly be a demand for Real Estate within proximity to highly regarded schools.
What parking options are available? – permit Vs allocated off street!
Who are my neighbours? – worth while making sure you don’t have an Air BnB next door!
Who are the managing agents? – research who the managing agents are? Do they have a good reputation?
How close are the amenities? Having supermarkets, restaurants & cafés within a short commute would increase the rental price as these are all attractions to prospective tenants.