Tag: tenanted

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.

23rd November 2015

2 bedroom flat, Furnace Green, Crawley

Marketed by Astons to “investors only” is this 2 bedroom flat in Furnace Green, Crawley on the market for £169950. The agents state that the property is currently tenanted and that the rent being achieved is £875pcm. Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-52224724.html

Furnace Green 23-11-15.jpg

As we’ve said before, if you plan to buy with tenants in-situ, do check their rent payment history. In addition, to avoid disrupting the tenants and to save yourself a few pounds, you might be able to get the white goods “thrown-in” with the purchase price. After all, it is unlikely that the current owner/landlord will have anywhere to put them ! Lastly, for the purpose of due diligence, always enquire as to why the owner is selling.

What about the rental yield ?

We’ve checked comparable properties in the area and the quoted rent of £875pcm seems spot on. So based on the purchase price of £169950, you would expect to get a return of close to 6.2%. So not too bad at all.

Whether you’re an experienced investor or considering buying an investment property for the first time, we’d be more that happy to have a chat with you. Should you see a potential investment property through another agent, we could also view it and give you an independent opinion on its suitability – before you part with any money on surveys or solicitors fees. We don’t charge for this service, so just give us a call on 01293 515588. Alternatively, you can also e-mail us at crawley@northwooduk.com.