Bargain or not ?
Take a look at this 1 bedroom flat at Connaught Gardens, West Green, Crawley, on the market with Astons at £167950. The property is marked for “Investors Only”, which probably means that there’s a tenant in-situ. However, no rent is quoted and there are no internal photographs.
For further details, here’s the Rightmove link http://www.rightmove.co.uk/property-for-sale/property-52224760.html
One thing to notice straight away is that the picture looks quite “summery”, rather than indicative of the end of November! A little further digging and we found an identical photograph, advertising (presumably) the same property, from July 2015 at a lower price of £164950. Here’s the Rightmove link https://www.rightmove.co.uk/rmplus/property/showPropertyMcr.action?propertyId=35578086 You’ll also notice that there is a “Sold STC” flash on this picture. So presumably, an offer was accepted by the vendor, but for one reason or another the sale did not go through to completion.
If the property didn’t sell at £164950, why market it now for £3000 more?
Well, perhaps the agent could argue that the market has now “moved-on” a bit since July and the vendor, fed up with waiting for another sale, has also decided to let the property out. Hence it is now being marketed for “Investors Only”.
Of course, the above is just speculation on our part you understand, but these things do happen.
One bedroom flats like the one we’re considering rent for between £775pcm & £795pcm. So based on a marketing price of £167950, the rental yield would be in the region of 5.5% to 5.7%. Regular readers of our blog will know that a rental yield at this level is pretty good.
However, let’s take a closer look at the asking price.
Land Registry price paid information for properties can easily be found from sites such as Rightmove or Zoopla. Looking at the price paid information for Connaught Gardens, Crawley, on Rightmove, you’ll see that a similar one bedroom flat sold for £155000 (June 2015) and a 2 bedroom flat completed in April 2015 for £167500.
So the question remains, is the 1 bedroom flat we’re considering a bargain at £167950 or not?
Well, from the marketing price history of the flat, together with recent sold price information for other properties in the same development, £167950 does seem to be a bit on the high side. This is inspite of the fact that the rental yield appears to stack up. So armed with the results of our investigation, you could sensibly approach the agent with a below asking price offer and argue quite a convincing case for it to be accepted.
Of course, it remains to be seen whether the vendor would be persuaded! However, your most powerful weapon in any negotiation is that you can make a “sensible” offer and then walk away. This will leave any decisions to be taken, firmly in the vendors hands. And remember, don’t get “hooked” up on any one particular property, there are others around to consider.
If you currently have your eye on a buy-to-let property in and around the Crawley area, but are not sure whether you’re paying too much for it, why not give us a call on 01283 515588. We would be more than happy to offer you our advice. Alternatively, you can also e-mail us on crawley@northwooduk.com.
The Crawley Property Blog 