It Takes A Brave Investor

When you see a property being advertised at less than the market value it often makes investors sit up & take notice.  But then the doubts creep in and thoughts turn to whether it is worth the time, money and aggravation to turn it into a successful and profitable rental property.

Take for instance the House that local agent, Astons, is marketing in Gossops Green, Crawley.

http://www.rightmove.co.uk/property-for-sale/property-48473221.html

The photos on the website give a clear indication of the scope of the works needed to attract the best rent.  Many investors are looking for an easy purchase that a tenant can move straight into and minimise the void period.  To achieve the current ceiling rent of £1150 in that area this house will need a brand new kitchen, new bathroom, redecoration and carpets throughout.  I doubt there will be little change from £20,000 and at least 2 months without rental income coming in.  

But when you see similar houses being advertised at £270,000 it begins to look a more attractive prospect.  If no refurbishment were carried out the property would most likely rent at the lower end of the price spectrum, £950pcm.  The yield calculated at this rent and on the asking price would be 4.75%, just lower than the minimum 5% we all strive for.

Interestingly the yield increases if the refurbishment is carried out.  The brave investor would spend the £20,000 & rent the property at the top end of the rent spectrum of £1150.  Even when adding in the two months lost rent income the yield increases to 5.2%.  In addition to the increased yield the works may have pushed the value up to that of the similar properties nearby, £10,000 more than was spent.

It could have potential

If you have spotted any investments but unsure of their potential you are welcome to contact me for advice, my office number is 01293 735000

What Sold the Most in Crawley - Flats or Houses?

Crawley & its outlying areas attract all sorts of property hunters seeking a home with our great location of being halfway between London and Brighton.  Fortunately, just about every accommodation preference can be catered for, from highly desirable detached houses to the spacious new town commission planned neighbourhoods to modern developments of apartments dotted throughout the area.

There seems to be a constant commentary from newspapers and media about what is happening to the property market so let us use the land registry statistics to see exactly what has happened over the last 12 months, in particular, what type of property is actually selling.

Terraced Houses in Crawley

Between November 2013 and November 2014, 1456 of the 50318 properties in Crawley actually sold.  The best performing type of property was, the terraced house. Not surprising considering the new town roots of Crawley but the most popular type was the terraced house with 569 sold in the last year, with an average sale price of £230,008.  This  represents 39% of the property sold in the area (which when you consider 42% of local property is terraced houses, this means they have changed hands less than some other types of property).

In second place are the flats and apartments. They represented 23% of the sales, but then flats and apartments make up 20% of the property in Crawley, good news for all flat owners as the activity is greater than the market share of their property.

Of the 10,661 semi-detached houses in Crawley, 278 changed hands in the last year, showing that whilst 21% of properties in Crawley are semi-detached houses, they very respectably, represented 19% of the sales.

On a par with the semi’s – the detached houses also represented 19% of the sales.  However the 8802 detached houses throughout our area represented 17% of the housing stock.  The 271 that changed hands over the past year means there was ore activity in this market than that of the semi-detached houses.

What does this mean for the property owners of Crawley? It means that there is a fairly even property market in Crawley. Most homeowners start with a terraced, aspire to move to semi detached houses, then as finances allow, they move to a detached property. The majority of apartments, especially in the city centre, may have been purchased by landlords to rent out to tenants.  The Gatwick effect means that the buy-to-let market is buoyant with many landlords investing in the area meaning the activity in the apartments sector is strong. 

However, in general, the Crawley property market is in full swing and ‘negative equity’ is becoming a distant memory. We are seeing some good sales and if you look hard enough, you may chance upon a "hidden property gem" in the most unlikely of places.

If you would like to discuss anything further then please pop in and see me in our office on Orchard Street.

Tenanted Apartment in Worth for sale

Looking for that perfect turn-key investment – then look no further than the apartment my own office has for sale in Worth.  Built in 2010 the Taylor Wimpey development features larger than average apartments that benefit from undercover parking, lift access and ensuite shower rooms.  Naturally they are highly sought after and command a good rent.

  

Stone Court, Worth

 

The 2 bedroom apartment with en-suite shower room is currently tenanted at £1000pcm and being offered for sale with a guide price of £225,000 to £245,000.  The good news for investors is the lower end of the guide price makes it possible to achieve a gross yield of 5.33%.  Like all agents I like properties that make our work life easy and the apartments in Stone Court definitely fall in to that category.  The last time this property rented we let it first viewing and the landlord experienced a void period of only 48 hours.

Any investor nervous about taking on an existing tenant needn’t worry.  The Tenant Monitor & Free Eviction will continue as part of any Martin & Co management of the tenancy whilst the current tenant remains in occupation.  

Further details can be found by clicking here

Chiltern Close Revisited

Last year I highlighted the 3 bedroom house in Chiltern Close, West Green that was proving slow to sell.  The agent had reduced the price from £240,000 to £225,000 to broaden its appeal.  I commented about it on the blog and suggested it might make a decent investment purchase.  Today I have seen local agent Connells advertise a similar property in the next road along but at a rental price that is £150 per month higher than my original top estimate for the house in Chiltern Close.

 http://www.rightmove.co.uk/property-to-rent/property-50634935.html

Six months ago I estimated that the house in Chiltern Close could achieve a yield of 5.7% but that has turned out to be a very conservative estimate.  In the end the house in Chiltern Close sold for £224,000 but would have required a minimum of £6000 for a refurbishment in an attempt to attract the best tenant.  Even with allowing for the cost of the refurbishment works the current rental asking price of £1250 pcm reveals a yield much higher than I anticipated at 6.52%.  The rising rents have helped to increase the yield but when I spot any other opportunities like this one I’ll make sure to add them to the blog.      

St Peters Church - West Green - Crawley

6% Yield close to Town Centre

If I had a pound for every time a prospective tenant says they want to live “close to the tenant centre” I could be a millionaire.  I have seen this flat come on to the market that is not only close to town centre but also walking distance to the Manor Royal Industrial Estate.  The property is being marketed by Northwood, you can see the details by clicking here

http://www.rightmove.co.uk/property-for-sale/property-48933761.html

It is not the biggest 2 bedroom flat on the market but it has the big advantage of a garage and is in a very desirable location.  We would advertise at £900 per calendar month therefore a yield of over 6% is almost certain on this property.  If the tenants don’t have a car & rely on public transport they are well served by the FastWay buses that run almost 24 hours a day from the stops on the road outside the development. 

Increase yield by spending more..?

With house prices seeming to increase on a daily basis I am always interested when agents reduce the marketing price.  Astons have been marketing this property in Chiltern Close, West Green for months and have dropped the price on two occasions to its current level of £225,000.

http://www.rightmove.co.uk/property-for-sale/property-30039987.html

It has been a rental property for many years and has suffered from a lack of investment but even so, if purchased and rented in its current condition with no improvement works it would achieve £975 per month – a yield of 5.2%.

West Green is a highly sought after area close to the Town Centre and based on the similar properties I have let in the surrounding streets it would only take a new kitchen & a new bathroom and maybe a couple of new carpets upstairs to increase that rental price nearer to £1100 per month. 

I would budget a £6000 spend on new rooms to bring the property to a top rental standard.  What would interest the investor is that the total spend on the property is still much less than the £240,000 it was originally marketed for but the yield would increase to 5.7%

St Peters Church, West Green

1 Bedroom House with ready made tenants

After spotting the maisonette in Cottesmore Green on Friday that was for sale with another agents, we have just listed this little 1 bedroom house in the same area of Crawley. 

http://www.martinco.com/for-sale/property/182223

It has been tenanted with us for many years and has the benefit of being a proper house with an upstairs and downstairs.  Admittedly there isn’t a great deal of house but it is more than adequate for a single person or a couple and the current tenants are very happy living there.  One of the many advantages is not just its proximity to Buchan Country Park but this house comes with its own private garden.  To achieve its maximum values the house will require modernisation but for landlords looking for an easy investment this house will come with great tenants paying rent from the day of completion.

If you are interested in this property or any others listed on my company website please call my office on 01293 735000