Month: December 2015

23rd December 2015

Making your property appeal to the widest range of tenants

Did you get the answer to the question I posed on Monday ? It is, of course, that there is no shower over the bath in the family bathroom. The shower head attachment is fixed low down (for washing hair etc….) and the walls above the bath are only part-tiled.

To appeal to the widest range of prospective tenants, you will need to tile the walls up to the ceiling around the bath and then raise the shower head, so that someone can have a proper “stand-up” shower. The cost of doing this is not too great (perhaps a few hundred pounds), but do make sure there is sufficient water pressure to operate the shower ! In terms of rental investment, however, the cost of not installing the shower may be considerable, due to increased void periods i.e. when the property is untenanted. Most people would know this as being “penny-wise but pound foolish”. Don’t fall into that particular trap !

A word of caution, however. If you install a shower over the bath, please ensure that the walls are properly treated and made waterproof prior to tiling. In the shower area, the walls will get very wet and water penetration will then occur if /when the grout between the tiles starts to cracks. This will often happen naturally as the grout ages. Then, if the underlying walls are not waterproofed, you’ll have a much bigger & more expensive job on your hands than just re-grouting ! We’ve even come across some landlords who tried to use “waterproof” paint on their walls instead of tiles …….you don’t need us to tell you the outcome of that particular type of “DIY disaster” !

That’s enough on showers for now.

However, if you do have a question about what you might need to do to make your property more appealing to propective tenants, give us a call on 01293 515588 and we’ll hopefully be able to steer you in the right direction. Alternatively, you can e-mail us at crawley@northwooduk.com.

 

 

21st December 2015

2 bedroom apartment, Pound Hill, Crawley

I spy with my little eye…..a 2 bedroom apartment that has just come on with estate agents Greenaway. The Guide price is £210000, although they also give a price range of up to £230000. A major bonus for a property like this is its proximity to Three Bridges mainline station with fast trains to and from London.  Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-36504540.html

Trafalgard Gdns 21-12-15

As we saw in our last blog post, the agent has used rather summery looking pictures of the outside of the development, which may be indicative of  some prior marketing activity. In fact, checking back at the marketing history it appears that this flat was up for sale with the same agents back in September.

According to the agents’ description, the apartment is currently tenanted with the tenants contract due to expire in February 2016. As the property is not being specifically marketed for “Investors Only”, we can only assume that the vendor will sell to a fellow investor or someone looking to make the property their home.

Looking at the description, there are a couple of key features to consider from an investment point of view. Firstly, the flat is on the ground floor, which can be considered by some as more of a security risk. Personally, I wouldn’t let this put you off. To its advantage the apartment has its own (small) patio area and of course, no stairs to climb with bags of heavy shopping after a trip to the supermarket.

For the second feature, take a look at the bathroom in the property details. What do you see, or should I say, what do you not see ? If you’re unsure, think about the property and how it should appeal to the widest possible range of potential tenants. This will ensure minimum void periods and maximum rent. By way of a clue, check out one of our previous blogs e.g. 14th September 2015 at https://wordpress.com/post/thecrawleypropertyblog.com/13   If you’re still unsure, I’ll provide the answer for you tomorrow.

What about the potential yield ?

Properties like this one currently let for between £975pcm and £1000pcm. So in terms of yield you are looking at a range from 5.1% to 5.7%. We’ve calculated this range based on the “worst case” scenario in which the flat is purchased for £230000 and lets for £975pcm. The upper range or “best case” occurs where you buy the flat at £210000, but manage to let it for £1000pcm. Yields for both “worst” and “best” cases are certainly very respectable, but you should of course try to secure a property like this for as low a price as you can.

If you’re looking to invest in Crawley or surrounding towns why not give us a call to discuss what options are open to you. Our advice is free and, due to our years of lettings experience, we can provide you with many valuable insights. Call us on 01293 515588 or alternatively drop us an e-mail on crawley@northwooduk.com.

NB Don’t forget, we’ll give you the answer to our question tomorrow.

 

 

18th December 2015

1 bedroom flat, Copeland House, Rathlin Road, Broadfield, Crawley

Here’s a charming looking 1 bedroom flat in Copeland House, Broadfield, Crawley that has just come on to the market. It’s on with estate agents Zoom995 at £169995.

The warm sunshine in the picture, however, gives the game away a bit. A little further digging indicates that the property actually first came on to the market back in September …. which indicates the vendor hasn’t been able to sell at this price ! Well, not to worry, we’ll store that piece of information away and use it later  …. here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-36615825.html

Rathlin Rd 17-12-15

You’ll see from the internal photos that the property appears to be presented in very good condition, which is all to the good.

1 bed flats in Copeland House are renting for between £750pcm and £800pcm. In fact there’s one available now for £875pcm …… which may be just a little too high. It’s still on the market To Let and has been since the end of November. Only time will tell if they achieve this price.

If we look at the rental yield for this flat based on the rents that have been achieved i.e. £750pcm & £8000pcm, we get a range from 5.3% to 5.6%. So, not too bad at all.

Of course, using our “inside” knowledge regarding the actual marketing date of the property, you should have a better than evens chance of negotiating the price down a bit. As we always say, if you don’t ask, you don’t get !

If you’re looking for investment properties in and around the Crawley area, why not give us a call on 01293 515588. We’re more than happy to give you advice & will even view properties on your behalf before you buy. Please note, we don’t charge for this service either ! That way you get an independent, unbiased opinion of a property’s investment potential. Always remember that the selling agent in any property deal acts for the vendor, not the purchaser ! Alternatively, you can e-mail us at crawley@northwooduk.com.

 

 

17th December 2015

Price Reduction: 2 bedroom flat, Furnace Green, Crawley

You may recall back in November we published a blog featuring a 2 bedroom flat in Furnace Green, Crawley. Here’s the link https://thecrawleypropertyblog.com/2015/11/23/23rd-november-2015/

According to the selling agents (Astons) the property, which was being marketed to investors, was let for £875pcm. Back in November the asking price was £169950.

Well, the same property (with the same summery photo !) has just been relaunched with a £4k price reduction at £165950. Here’s the Rightmove link in case you want a closer look http://www.rightmove.co.uk/property-for-sale/property-52224724.html

Furnace Green 23-11-15

Based on the new asking price & quoted monthly rent, the potential rental yield has notched up a couple of tenths from just over a 6.1% in November to 6.3% as of now. Readers of this blog will know that a yield of this size  is  pretty healthy for the Crawley buy-to-let market. However, as we’ve said before, where the rental yield is high, capital growth is often lower.

One question that you might be asking yourself is whether, after a £4k price reduction, the flat is now reasonably priced. The second question, of course, is whether the vendor would be prepared to accept an even lower offer.  To answer the second question first, just ask. The worst that the vendor can say is no !

There are a couple of pieces of information that might help us decide whether the flat is now reasonably priced.

Consider, for example, the sold price history for this particular flat which is shown on the Rightmove details. At the peak of the market in 2007 the flat sold for £150000. Our previous analysis of sold prices for flats in Crawley over the last 15 years (see our blog post of 6th November) indicates that prices have only increased by a relatively small amount (approx 6% ) from the 2007 peak. If we were to assume that the flat under consideration here had increased in value by 6% since it was last sold in 2007, it should now be worth about £159000.

Another point to consider is that the property is currently being marketed to “investors only” and probably means that the  vendor would ideally like to sell the flat with the tenant in-situ. This type of sale can be advantageous for both purchaser and seller alike. From the purchasers point of view he gets a tenant from day one. As far as the seller is concerned, however, he should in theory be paid rent up to the day the sale completes. This is of course infinitely better than having to pay a mortgage on an empty flat while the sale (hopefully) goes through! In addition, with the imminent 3% increase in stamp duty for buy-to-let property purchases due to come into effect in April 2016, a vendor in this position would presumably rather sell sooner than later.

Thus armed with your analysis and understanding of the property market in Crawley you can make a more informed decision about whether to buy the property and what price you should be paying.

Whether you’re an experienced property investor or a buy-to-let novice, you can always give us a call for free advice on what the property market in Crawley has to offer. Call us on 01293 515588 or e-mail us on crawley@northwooduk.com.

14th December 2015

Property Investments – Seeing the wood for the trees

As we approach Christmas so we are seeing quite a few properties coming on to the market which are already tenanted. This may be because some landlords have had enough of renting – after all it’s perhaps not as easy as it seems at first glance. It may also have something to do with that Mr Osbourne, the Chancellor, and his rather unhelpful tax announcements for buy-to-let landlords. We’ll be saying at little more about these in the next few weeks or so….so keep a look out.

Whatever the reasons for these landlords deciding to sell with their tenants in-situ, the same criteria about buying investment property still applies. Just because the property is currently tenanted, it doesn’t mean that it is necessarily a good long term investment. We still need to apply our critical faculties and look at each opportunity as objectively as possible.

Location, of course, is one of the keys to unlocking investment potential, as are the additional facilities that a property has to offer. In this context “facilities” refers to the general situation of the property concerned, particularly in relation to what propsective tenants are looking for. In other words, it is crucial that you have researched & know your market really well. If you try to put yourself in the shoes of prospective tenants you’re more likely to make a better & more informed investment decision. You can also talk to your local letting agents as well. They should have a mine of information on what type of property lets well and, perhaps more importantly, what doesn’t !

To illustrate the point, let’s take a look at a couple of flats that have recently come on to the market. They’re both on the popular Pembroke Park development in Three Bridges, Crawley. For those of you who know Crawley quite well, this developement, which was completed in 2010, is on the site of the old leisure centre. This location is ideal for access to Three Bridges train station with its fast line to London. In addition, you are also in a great position for access to Gatwick Airport, Crawley Town Centre and Manor Royal industrial estate. In our opinion, the location of this development is pretty much spot on.

So let’s look at the other “facilities” the flats have to offer ?

One of the flats we’re considering was featured in our blog post of 1st November. It is marketed by Connells with an asking price of £230000. Since then the advertised status of the property has changed to “sold subject to contract” – here’s the link to our blog post https://thecrawleypropertyblog.com/2015/11/01/1st-november-2015/ and to the Rightmove details http://www.rightmove.co.uk/property-for-sale/property-37376022.html?premiumA=true

The second flat we’re looking at has only come on to the market in the last couple of days. It’s being marketed by House Network.co.uk with a Guide Price of £225000. According to the agents, this flat is currently being let on an Assured Shorthold Tenancies (AST’s). Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-34542621.html

Page Ct 15-12-15

Take a moment to look at the details for both of the flats. What do you consider to be the main difference between them in terms of medium to long term investment potential ? Remember, try to look at them objectively from the point of view of prospective tenants !

In our opinion, the main difference between these two flats is the availability and quantity of parking.  The Connell’s flat has a secure underground allocated parking space, plus a permit to park and a visitors parking permit. However, in the case of House Network.co.uk’s flat, there is only apparently permit parking available. This usually means you do not have a guaranteed parking space and it’s more on a “first come first serve” basis. In essence, therefore, the Connells’ flat has the best part of twice as much parking as the other.

Clearly, statistically speaking, the flat with more available parking is, in the long run, more likely to rent quicker and have fewer & shorter void periods. I know which one I would consider buying.

Assessing whether a property is a good long term investment can often be quite difficult to do. As we’ve tried to illustrate above, even similar properties on the same development could lead to very different investment outcomes.

If you find yourself in an quandary, where you can’t see the “wood for the trees” with regard to a potential investment purchase, why not give us a call ? We’ll be able to cast a fresh & experienced eye on the situation and give you our objective, unbiased opinion. Don’t hesitate to call us on 01293 515588 or e-mail us at crawley@northwooduk.com.

7th December 2015

3 Bedroom House, Tilgate, Crawley

Here’s a 3 bedroom house on Ashdown Drive, Tilgate, Crawley that has just come on to market with a guide price range of £260000 to £290000. Moore & Partners are the estate agents and there’s an Open Day on 12th December. So give them call if you’re interested. For a closer look now, however, here’s the Rightmove link http://www.rightmove.co.uk/property-for-sale/property-56472209.html

Ashdown Dr 7-12-15

The agents (Moore & Partners) indicate that the property could do with some updating. We’d agree with this, although from the pictures the house is presented in a neat and tidy condition. However, the green bathroom suite is a bit of a giveaway ! Of course, with your investors hat on, one key element you would need to have in the bathroom would be a shower over the bath. From the pictures and description, this appears to be missing. If you don’t change the bathroom suite (for a white one !), the minimum we would recommend is to make sure that there is a shower over the bath.

Please also check that the property has double glazing through out. It is mentioned in the description a couple of times, but in relation to specific windows & doors only.  A quick call to the agent will remove any doubts.

If you were interested in the property with a view to updating it, one question to ask yourself is how much is reasonable to spend on the remedial works ? Of course, there are no “hard & fast” rules in answering this question. However, we looked at a similar scenario in our previous blog of the 19th October 2015 and the analysis there can also be applied here. Here’s the link to the blog in case you want to take a look https://wordpress.com/post/thecrawleypropertyblog.com/274

In reality, any renovation project should be concerned with making sure that what you plan on doing is “reasonable” and “fits in” with similar properties in the area. To that end, similar properties in the Tilgate area that have already been updated are being marketed for sale in the £280000 to £300000 price range.  One property is up for sale at £295000, with a tenant in-situ. In terms of rental returns, however, properties like the one we are considering here currently rent out for between £1150pcm to £1200pcm.

If you consider a 5% rental yield as a benchmark return on your investment, these rents translate into prices ranging from £276000 to £288000 with an average of about £282000. Hence, spending £15000 to £20000 on top of a purchase price of £260000 to renovate the property would, in our opinion, not seem too excessive. Of course, the assumption is that the money is spent wisely and not, for example, on gold-plated taps ! One item that the selling agent hints at is the potential for off road parking (subject to planning consent). In our opinion, this would be something well worth considering if updating the property.

If you have your eye on a renovation project, be it to do up and sell or rent out, don’t hesitate to give us a call. We’d be more than happy to give you our opinion as to what would be reasonable to spend your hard earned cash on. Call us on 01293 515588 or e-mail us on crawley@northwooduk.com.