Tag: rental yield

20th November 2015

Horsham v’s Crawley !

Well, the Christmas Season is really starting to gather pace now. As it does you’ll usually find that the sales & lettings markets start to quieten down a bit. However, do keep your eyes peeled. There will be some bargains to be had, particularly as most people will be turning their attention towards the festive season.

One of our landlords called up the other day after reading the blog we posted on 6th November. If you re-call, in this blog we showed why the price of flats in Crawley had underperformed houses over the last 10 years. Well, the landlord concerned lives just outside of Horsham and has investment properties there, as well Crawley. He asked us if the price of his flat in Horsham had similarly underperformed the market.

When we compared average sold prices of flats in Crawley & Horsham over the last decade, Horsham clearly came out on top. As shown in the Table below, the difference in the average sold price between flats in Crawley & Horsham was barely discernible in 2005. By 2010, however, it had increased to 3.7% and over the last 5 years had widened even further to 21%. So in direct answer to our landlord’s question, his Horsham flat had probably performed much better over the last decade, outpacing Crawley by a good 20% or so.

Table: Sold Prices in Horsham & Crawley (From Land Registry)

Crawley Blog 19-11-15 Table 2

Just to round off the Horsham v’s Crawley story, we also decided to check the current average For Sale prices advertised on Rightmove for flats in both towns. These were calculated by taking a snap-shot of flats advertised on 13th November. By doing this we found the average For Sale price of Horsham flats was about £220000 and was 11% higher than Crawley, with a figure of £198000.

In contrast to the average For Sale price, however,  when we looked at  average rents being advertised on Rightmove on the same day,  we found that Crawley was ahead at £930pcm, with Horsham lagging behind at £880pcm. Using these average rents and the current average For Sale prices, we calculated rental yields for both towns. In this case, Crawley again came out on top with an average yield of 5.6%, while Horsham was 4.8%.

So it would appear that where Horsham outperforms Crawley in terms of Capital Growth, the reverse is true for Rental Yield.

As we’ve seen before, Capital Growth & Rental Yield tend to move in opposite directions. It’s therefore well worth taking the time to consider your investment strategy thoroughly. You need to decide if you’re looking to maximise you income now, or go for maximum long term capital growth and sell later on. Of course, you could also take a compromise position between the two.

Whatever your answer is to the Capital Growth v’s Rental Yield question, we’d be more than happy to have a chat with you to explore the different options available. Why not give us a call on 01293 515588 or e-mail us at crawley@northwooduk.com.

18th November 2015

1 bedroom flat, Southgate, Crawley

Here’s a nice looking 1 bedroom flat in Southgate, Crawley that has just come on to the market with Homes Partnership, for £169950. The flat is marketed for investors only, as there’s a tenant in-situ. So potentially, a ready-made investment for you. Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-56041028.html

Southgate 1 bed flat 18-11-15

A couple of points to consider before we get to the rental yield. The property details do not mention a shower over the bath. If the current tenant moves on we would advise putting one in, if there isn’t one already – just check with the agent in the first instance. The second point to note is that the property details mention the flat is freehold. Usually flats are sold leasehold. However, sometimes a share of the freehold is available as well. Again, just check this with the agent.

Ok, so what about the rental yield ?

Although the advertised details do not mention the rent currently being paid by the tenant, a property like this should fetch around £800pcm. So, based on this and the asking price of £169950, your rental yield would be about 5.6%. Which, in our opinion, is not too bad at all.

If you’re interested in purchasing the flat with the tenant in-situ, do make sure that you check the rent payment history. As we’ve said before, you want to buy an investment, not a nightmare !

If you’re looking to invest in property in and around Crawley, why not give us a call on 01293 515588. We’d be more than happy to have a chat with you about our favourite topic ! Alternatively, you can reach us by e-mail on crawley@northwooduk.com.

 

13th November 2015

3 bedroom house, Bewbush, Crawley

Connect-UK are marketing this 3 bedroom house in Bewbush, Crawley at £259950. The property is being marketed to “investors Only”, which often means that a tenant is in-situ. A call to Connect, however, should clear that up. Here’s the Rightmove link for further details https://www.rightmove.co.uk/rmplus/property/showPropertyMcr.action?propertyId=37700691

Colwyn Cl 13-11-15

If you’re interested in the property and it is being sold tenanted, do check that they are up to date with the rent and are looking after it well. After all, you want to buy an investment property, not a nightmare (and it is Friday 13th !) – scary thought.

Properties like this in Bewbush, in good condition, can rent for around the £1200pcm mark. We know that for sure because we recently rented one in the same location !

For investment purposes this house would primarily suit a family. As we’ve mentioned before, all things being equal, families tend to stay in properties for longer, so your turnover of tenants & void periods should be shorter in the long run.

Based on the purchase price of £259950 and a rent of £1200pcm, the gross yield for this property would be around 5.5%. So not bad at all.

If you’re looking for investment properties in and around Crawley, why not call us up for a chat on 01293 515588. Alternatively, do drop us a line to crawley@northwooduk.com.

9th November 2015

4 bedroom house, Broadfield, Crawley

We don’t normally consider 4 bedroom properties as ideal for investment purposes. However, here’s an exception in Broadfield, Crawley. Marketed by agents Homes Partnership for £229950, they also quote a potential rent of £1200pcm, which we think is pretty close to the mark. Based on this rent, the gross rental yield would be an impressive 6.3%.

Readers of our blog will know that this potential yield is at the high-end of what we tend to find in Crawley. If you would like to have a look at some further details of the property, here’s the Rightmove link  http://www.rightmove.co.uk/property-for-sale/property-55273673.html

Broadfield 9-11-15jpgPlease remember that properties with higher rental yields tend to have lower long-term capital growth. The reverse is also true. So when thinking about property investment you need to consider whether rental income or capital growth are more important for you. Once you have the answer to this question, you’ll then start to have more of an idea about what type of property investment would suit you best.

If you would like to discuss the property investment options that Crawley and surrounding towns have to offer, please don’t hesitate to give us a call on 01293 515588. Alternatively, drop us an e-mail to crawley@northwooduk.com.

5th November 2015

1 bedroom flat, Horley

Here’s a 1 bedroom flat in Horley, on the market with estate agents James Dean at £130000. As far as rent is concerned, they say that a flat like this should achieve a figure of £750pcm, which in our opinion seems reasonable. Here’s the link to Rightmove if you would like some further details…. http://www.rightmove.co.uk/property-for-sale/property-37525584.htmlLongbridge Flat 5-11-15

Based on the agents estimate of the likely rent and an asking price of £130000, the rental yield is an impressive 6.9%.  Do remember in general, however, the higher the yield, the lower the capital growth.

If you’re an investor looking to purchase a property in Crawley or the surrounding towns such as Horley, Redhill, Reigate, Horsham & East Grinstead, don’t hesitate to give us a call on 01293 515588. We’d be more than happy to have a chat with you. Alternatively, you can also drop us an e-mail to crawley@northwooduk.com.

4th November 2015

2 bedroom flat, Maidenbower, Crawley

Here’s a nice looking 2 bedroom flat in Maidenbower, Crawley on with De Vere at £215000. The property was reduced in price yesterday and was originally marketed from 9th October at £220000. From the internal photographs, the flat looks to be in very good condition. Here’s the Rightmove link if you want any further details http://www.rightmove.co.uk/property-for-sale/property-55264778.html

Lyon Cl 4-11-15The recent £5000 price drop might be for a host of reasons. For example, the sellers may now have found a property to buy and want to get “things moving forward” more quickly. On the other hand, they may have just tried “testing the market” at the higher price and have now come down to secure a buyer. Whatever the reason, however, the drop in price indicates that the sellers may well be flexible in future. To put the current asking price into context, similar nearby flats that have sold recently are 30 Lyon Close (£190000 May 2015) and 50 Dakin Close (£205500 May 2015).

As we’ve mentioned before, if you can move quickly on property purchases, you can often negotiate price reductions. So if you’re an investor and interested in this flat, do bear this in mind.

What about the rental yield ?

Properties like this one rent for about £950pcm to £975pcm. Based on an asking price of £215000, this would give you a yield of 5.3% to 5.4%. Of course, if you can negotiate a lower price, so much the better !

If you’re considering investing in property and would like some advice on what & where to buy in the Crawley area, we’d be more than happy to have a chat with you. Give us a call on 01293 515588 or drop us an e-mail to crawley@northwooduk.com.

1st November 2015

2 bedroom flat, Commonwealth Drive, Three Bridges, Crawley

We’ve featured a number of these flats on our blog recently. One reason for this is the location, which ticks a number of boxes and therefore makes them very popular for tenants.  For example, there is good access to Three Bridges main line station for those commuting to London, as well as good access to Crawley town centre, Manor Royal industrial estate and of course and Gatwick Airport.

Here’s a 2 bedroom flat at the Commonwealth Drive development on with Connells at £230000. There’s an open day on 7th November……..so give Connells a call if you’re interested. Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-37376022.html

CommonwealthDr 30-10-15You’ll have noticed that over the last few months the prices of these flats has started to creep up. However, so have the rents. Currently 2 bedroom flats in this development are commanding rents of around £1050pcm to £1100pcm. Based on a purchase price of £230000, this flat would give a gross yield of 5.4% to 5.7%.

If you’re interested in this property, please check to make sure that there is a lift close-by.  As it is located on the 4th floor, the lack of a lift would be a definite negative.

If you’re new to buy-to-let and would like some advice on what to buy and where to buy it, don’t hesitate to give a call on 01293 515588. We’d be more than happy to have a chat with you… and we don’t charge for a bit advice ! Alternatively, you can also e-mail us on 01293 515588.

30th October 2015

2 bedroom maisonette, Langley Green, Crawley

Here’s a maisonette in Langley Green, Crawley which according the agents, Fox and Sons, requires a little tender loving care. Well, we certainly wouldn’t disagree with them ! However, with a guide price from £200000, there may be some scope to add value and provide a good buy-to-let investment. Here’s the Rightmove link for more further details http://www.rightmove.co.uk/property-for-sale/property-37349547.html

LG30-10-15You may recall that we featured a Langley Green maisonette previously (16th September 2015 blog) which was in tip-top condition and had a guide price of £220000.  At the time rents for these types of properties were, and still are, in the region of £975pcm. All things being equal this gave a gross rental yield of around 5.3%.

If the property we’re featuring above were in a similar condition to the one in our previous blog, we would expect it to achieve a similar rent of £975pcm. Assuming that you could buy at the lower end of the guide price range, you can see that there is some room (perhaps even up to £20k) to completely renovate the property. Of course, if your renovation costs were lower, your rental yield, based on purchase price & renovation costs, would be even higher.

As we’ve previously mentioned, if you can move quickly on any deal, you may well be able to drive a harder bargain & hence get a lower price. This idea was also mentioned in todays’ FT ( http://www.ft.com/cms/s/0/b902e6e4-7e54-11e5-a1fe-567b37f80b64.html ). There’s also another aspect that might help you in your bargaining position if you went for this property. Can you guess what it is ?

The internal pictures of the maisonette show that, not only is it in need of a “make-over”, but it’s also empty! An empty property is one that is not earning money, or is perhaps costing mortgage payments to someone. So may be the vendor might accept a lower price for a quicker sale. Who knows ? But, if you don’t ask, you don’t get !

If you’re looking for investment properties in Crawley or surrounding towns, or have your eye on a potential buy-to-let and would like a second opinion, we’d be happy to have a chat with you. Just give us a call on 01293 515588 or e-mail us at crawley@northwooduk.com.

23rd October 2015

1 bed flat in Broadfield, Crawley

For those investors interested in high rental yields, this 1 bedroom flat in Broadfield, Crawley has just come on to the market with agents Taylor Robinson, priced at £139950. Here’s the Rightmove link if you’re interested in taking a look http://www.rightmove.co.uk/property-for-sale/property-51455587.html. From the pictures, the flat looks to be in good order.

Broadfield Pl 23-10-15With regards to letting, we would expect a flat like this to achieve a rent of between £725pcm & £775pcm. Based on a purchase price of £139950, this would give a gross yield of between 6.2% to 6.6%. Followers of our blog will note that this is probably the highest potential gross yield we have reported to date. Do remember the “Golden Rule” of property investment, however, that when the rental yield is high, capital growth tends to be lower.

If you’re considering investing in a buy-to-let property in Crawley or surrounding towns, why not give us a call. We’re more than happy to have a chat with you about our favourite subject ! Alternatively, drop us an e-mail to crawley@northwooduk.com.

21st October 2015

3 bedroom terrace house, Tilgate, Crawley

This 3 bedroom house in Tilgate, Crawley, popped on to the market yesterday with estate agents Moore & Partners. The Guide Prices starts at   £260000. From the pictures the property looks to be in very good order and should make an ideal family home whether renting or buying. For more details have a look on Rightmove. Here’s the link: http://www.rightmove.co.uk/property-for-sale/property-49700830.html?premiumA=true.

Apparently there’s an open day on the 24th October, so if you’re interested give the agent a call and have a look round.

Johnson WalkIn the present market, houses like this one will usually rent for between £1150 pcm to £1250 pcm. If you could secure the house at the lower end of the guide price range, these rental figures translate into a gross yield of between 5.3% to to 5.8%. Pretty good !

Two things to bear in mind. If you’re an investor with nothing to sell and are willing to progress the sale quickly, this can be attractive to a vendor. The vendor could therefore consider an offer from you more favourably than someone else who is, for example, in a sales chain. The other point is that the lettings market usually goes fairly quiet over Christmas, not picking up again until late January /early February. As such, if you purchase the house and complete during the festive period, you may have a longer than usual void period i.e. when the property is without a tenant. Don’t panic (Captain Mainwaring !), however, as the lettings market normally picks up again at the end of January / beginning of February.

If you’re considering buying an investment property in Crawley or the surrounding towns, why not give us a call on 01293 515588. If you see a potential investment property through another agent, we’re more than happy to take a look ourselves on your behalf. We can then give you an unbiased opinion on whether the property represents a good investment or not. There’s no charge for this either ! Alternatively, drop us an e-mail to crawley@northwooduk.com.