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

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.