Great Little Investment in Ifield West

It is always worth splashing out a little bit more for a property that has its own private garden and I saw this little 1 bedroom maisonette being marketed with Astons.

http://www.rightmove.co.uk/property-for-sale/property-30852609.html

These maisonettes in the leafy suburb of Ifield West have a great shape to the living space that allows for distinct areas for lounge & dining – which is unusual in the smaller properties.  They also have enclosed kitchens rather than the current craze of having cookers and washing machines open plan to the main living area.  With its own private garden I can rent this at £725 per month or maybe even more in todays property starved rental market.  Ifield West is not best served by public transport but car owners would enjoy the allocated parking space. 

If purchased at the marketing price of £154,950 the yield would be a respectable 5.6% but I’d be tempted to put in a cheeky offer based on the highest price achieved for one of these in the 2007 boom time.  If accepted at £140,000 the yield would be over 6% & make the property much more attractive to the investor.

Prices Boom, Bust and Boom again but Yields remain constant in Seaford Road, Crawley

A few weeks ago I featured a 3 bedroom house in Seaford Road, Crawley that I thought would make a good investment.  Interestingly I have just let one of these houses for a landlord who owns a number of properties all in the same road and I checked back through the records to discuss the rise and fall of property prices on the street and how this has affected the yield over the years.

In 2001, when he purchased his first property on Seaford Road, the average sold price of the 3 bedroom terraced houses on the street was £105,000. This rose sharply to £144,500 in 2004 and continued to rise to £150,750 by 2006.

At the end of 2007, in the height of the property boom, the same terraced house on Seaford Road had an average value of £177,000. But along came the crash and sold prices fell back by over £20,000, land registry data shows the average sold price in 2011 was just £154,000.

The land registry sold house price data for 2014 will verify every media report about a housing market recovery (or boom depending on which media you read).  There have only been 2 sales recorded this year but the average sold price has rocketed to £185,000, surpassing the previous property highs of the 2007 boom and do not look like slowing at any time soon.

We trawled through the dusty Martin & Co archives to look at the average rents achieved on the street and they have done nothing but rise.  In 2002 the average rent was £750 per month and is now £975 per month.  Despite the obvious fluctuations in price the yield has barely changed in the last ten years, it was 6.6% in 2004 and in 2014 the yield is now 6.3%.

For any landlord who has kept hold of their property in Seaford Road it has been a solid investment.  Prices have gone up, come down, gone up again but with 10 years of consistently achieving a yield of over 6% it is still a road to consider investing in.

Return to Sunnymead, Crawley

Back in June I wrote about the tremendous yield you could get on the 2 bedroom flats in West Green, Crawley & today I have seen one of these flats come to the market with local agent Platinum Estates

http://www.rightmove.co.uk/property-for-sale/property-47689544.html

On my last post I had  guessed the price had surpassed the 2007 peak and if they achieve todays marketing price of £179,950 it would be a record for a two bedroom flat in that road.  It would seem that my client that bought in 2006 for £137,000 has done ok now that the market has recovered. 

But do these flats still make a good investment?  The current rent for a 2 bedroom flat in this road is now £850 per month.  Even if this flat was purchased for the record full asking price it would generate a yield of 5.66% which makes it worth considering. 

My job is to keep the property filled with tenants paying the correct rent & I can show how the rent for these properties have consistently risen, in fact rents are 20% higher now than 6 years ago.  It would be up the investor to see how much of a discount they could get off the asking price to make it an even better investment and increase that yield even further.

One House versus Two Flats

I often see investors who want to buy the biggest house they can find with their available cash.  But in the world of property investment we often find it is the investors who have divided their cash among as many properties as possible that benefit the most.  As an example I have seen that Mansell McTaggart are currently advertising this great family home in Three Bridges for £280,000

http://www.rightmove.co.uk/property-for-sale/property-31874094.html

It has all the hallmarks of being a great rental property, driveway, garage, close to Three Bridges Station & some of the best schools in Crawley.  If I listed this house to rent the phone lines would go into meltdown with the amount of enquiries we would get.  Based on a buy to let mortgage of 75% the deposit would be £70,000.  A conservative rental valuation would be £1200 per month giving a yield of 5.1%.

However if you had £70,000 cash I would be telling you to increase your yield by 11% simply by buying two smaller properties.  I have seen two 1 bedroom maisonettes on the other side of town being advertised at £140,000 each.  Neither are as attractive as the house, there are no garages or driveways but the office phone would still ring & we would have tenants for them very quickly.  The £70,000 will buy both with a 25% deposit and I would give a conservative rental figure of £675 on each.  Combine both rents & that gives a rental yield of 5.7% - 11% higher than the yield for the house.

I would have guessed the house would win with its capital appreciation but I may have been wrong.  The current marketing price is 24% higher than the last sold price from 3 years ago.  There were fewer property sales in 2011 but the data that is available would give a 2011 valuation of £110,000 to the maisonettes.  Based on the marketing price their capital appreciation is even greater than the house at 27% higher than 3 years ago.  Both maisonettes have already had their asking prices reduced and a few months after they have been sold I’ll be able to check the land registry data to see if the maisonettes met the current asking price and achieved a greater capital increase.

Investment Opportunity - Southgate

With house prices being at their highest level we worry there aren’t any good investments to be had in Crawley.  But I think there are – I saw this 3 bedroom house come on the market this morning with Connells in Crawley High Street.

http://www.rightmove.co.uk/property-for-sale/property-47664386.html

Investors might gasp at the £220,000 price tag but with a little bit of touching up these properties will rent for £1100 per month to a family – that’s a 5.7% yield which is pretty good on a 3 bedroom house.  Renting to a single family will give any landlord an easier life and a more stable let.  Southgate has always been popular with tenants, it is close to Town, has great links to Gatwick and is a traditional family neighbourhood.  The price may seem high but doing a quick search on Rightmove is showing similar properties in the £230,000 to £240,000 price range.      

Tollgate Hill Price Reduction gives 6.2% Yield

We love these little maisonettes – they are really popular with tenants, easy for landlords to maintain & even though they are leasehold there is no service charge & only a peppercorn ground rent.  My neighbour, Taylor Robinson, has just reduced the price of this 1 bedroom ground floor maisonette in Tollgate Hill.

http://www.rightmove.co.uk/property-for-sale/property-45762676.html

We know it is currently rented and I suspect the lack of any internal photo’s could be a clue as to why there has been a price reduction on what should be a really popular property.  However, as an investment the figures look good.  The garden would be a big draw for tenants & the rental valuation of £725 per month would give a yield of 6.2%.  Prices have risen sharply over the last 12 months but the benefit of these properties is that they tend to attract long term tenants.  It could be the fact they have gardens or the easy commute to Gatwick via FastWay or the M23 motorway.  I have a couple of these garden maisonettes that have tenancies in excess of eight years, ensuring a constant income stream throughout the peaks and troughs of the housing market.

5.8% Yield & Move-In Condition in Broadfield

Anyone would think I was wearing my “I Love Broadfield” T-shirt but I have seen this great 3 bedroom house come on the market with Zoom995.

http://www.rightmove.co.uk/property-for-sale/property-47432291.html

Even though the price is 22% higher than only a few years ago the yield is still an impressive 5.7%.  I have rented a number of similar houses in the surrounding roads this year all at the £975 or even £995 price.  It looks to be in move-in condition so would require no initial works and therefore no delay in generating the income.  I think tenants would be drawn to the property because of the garage and the separate shower cubicle.  In addition, the location is well served for transport, being only a couple of minutes walk from the No.10 and No.20 FastWay routes direct to both terminals at Gatwick Airport and both stations, Crawley & Three Bridges.  And finally, what would please any investor is that from my experience the length of tenancy in these properties can be is 4 to 5 years or even longer.  

Langley Green - A Forgotten Gold Mine?

Many of the new investors I meet want to buy in Maidenbower and Pound Hill because they have been told about the lists of prospective tenants waiting for those houses but finding good deals in these areas can be tricky.  They are amongst the most desirable areas and naturally attract the highest prices in Crawley.

It is then I step in and tell them about the clients I have with investment properties that have achieved a 45% increase in capital value.  Langley Green is another of Crawleys well planned new town estates, north of the town centre, west of the Manor Royal business park and south of the runway at Gatwick Airport.  They say location is key and that could be the reason why properties in the Langley Green area have generated great returns.

One of my clients was a little apprehensive when I took him to view the early 1960’s new town commission house that I told him would be a great investment purchase.  Located in Beckett Lane, Langley Green, the road is a mixture of 2 and 3 bedroom council and ex-council properties, close to the Manor Royal business park.  That was in 2008 and he obtained the house for £155,000, we saw a similar property come on to the market last week at £225,000, that’s a 45% increase in capital value.  He has no plans to sell, in fact he still has the same tenants that moved into the property in 2008.  The tenants work at Gatwick Airport and the house makes a perfect home for their family because it is only a 15 minute commute to the North Terminal. 

In general the new town commission parts of Crawley are only 54% owner occupied making them fertile grounds for property investors. Local agent Choices is currently marketing a 2 bedroom maisonette at £180,000 which would make a great rental property for either a young family or 2 sharers.  The rental value of £850.00 would generate a yield of 5.7%, more than enough to satisfy the most discerning of investors.  For those looking a little higher up the market the Vancouver Drive area of Langley Green offers a collection of detached and semi-detached house with a private estate feel.  The main UK headquarters of Virgin Atlantic is an easy 10 minute walk from the entrance of the estate and for other airport related staff the No.10 FastWay stops almost right outside, giving a direct route to both North & South terminals.

Another of our investors bought a 3 bedroom detached house on this estate for £190,000 in 2004, a neighbouring house sold for £264,000 in 2013, that’s a 39% increase in capital value over the last 9 years.  This house is still rented and with the current rent set at £1020 per month giving a 6.4% yield on the original purchase price.

For any property prospectors considering an investment purchase in Crawley I am happy to look through the data and offer advice, free of charge & based on actual properties and tenancies deals that I have been involved with.