Packaged deals are not for me

My search for my next rental has taken me all over. I have been to seminars both locally and as far as London. Viewing after viewing and I have still failed to find a decent property.

The latest search has been to look at on-line investment opportunities. A particular investment agency recently caught my eye.

One of the property deals they were offering was of interest:

3-bed house ADVERTISED.

Key investment facts

  • Purchase price £45,000
  • Rental figure p.a. £6,000
  • Rental figure pcm £500
  • Management fee p.a. (8%) £480
  • Net profit p.a. £5,520

Now all that sounds amazing. But what really pulled me in was that the property is ADVERISED as having a 5-year rental guarantee. The rent of £500 pcm is guaranteed until March 2024.

My inner chimp was getting excited and was ready to send over the money to secure the deal. I needed to stop, calm myself down and look further into this ‘to good to be true’ deal.

When I got in touch with the agent, not only was it a different house in a different street (similar area), it was a different deal.

2-bed house – the house they ACTUALLY have available.

Key investment facts

  • Purchase price £39,000
  • Rental figure p.a. £5100
  • Rental figure pcm £425
  • Management fee p.a. (8%) £408
  • Reservation fee £2,700 including VAT – why not just fucking say the ACTUAL fee of £3240

In addition to the small factor of it being a different deal, the reservation fee is excessive compared to the purchase price. It means you are paying over 8% of the purchase price for someone else to find you a deal. I wasn’t really a fan of packaged deals anyway but is this southern fairy having a laugh!!!

At this point I am half way out of the exit door but I plough on and do some research.

The area is very poor and I also find that similar properties are on the market for 25-30k. The figures still look good but when you see how poor this particular street is, the price is high in comparison to other available properties. The £3240 finders fee is pissing me off at this point.

I am very skeptical about packaged deals at this stage and this has only added fuel to the fire. Packaged deals might work for others but not for me. To charge £3240 for a couple of hours work is laughable.

This wasn’t a complete waste of time as it has made me aware of a local authority that guarantee rent for a period of 5 years. It is a local authority that I am going to be speaking to over the next few weeks as I very much like the idea of guaranteed rent for 5 years. This type of passive investment is right up my street.

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