Larkspur Close vs Kestrel View

Larkspur Close vs Kestrel View

I was talking to a couple who popped by the office yesterday who are looking at investment properties in the area.  They brought in details of two properties, a two bed in Kestrel View and the same in Larkspur Close and asked me my view on which would make the better investment.  Which would offer a better return/yield?  

Now both streets let well but I decided to do a little research to help them with their decision.

The average asking price on a property in Larkspur Close stands at £160,000 whilst on Kestrel View  it is currently  24% lower at £139,000.   To fully understand the investment opportunities available, I considered the average rents currently payable in each street.

Currently a two bed terrace house on Larkspur Close will rent for around £700 giving around 5.25% return whilst the same on Kestrel View will return around £650 showing around 5.41%- not a lot of difference.

However when we consider capital growth over the last 5 years the properties in Kestrel View have appreciated nearly 20% more than those  in Larkspur Close.  

So it comes down to that old chestnut, yield or capital growth!  Assuming both properties were in lettable  condition  I would suggest that you would be better investing your money in Kestrel View because although the yields are similar the capital growth is significantly greater and the original purchase price would be much less.

If you would like any more information on investing in Weymouth’s property market please call me on 01305 775504 or visit our office at the top of St Thomas Street.

Buy to let opportunity in Weymouth

This little  two  bed is on the market for offers on £150k but £150k might get it of course.  It looks very tidy and would rent very quickly given its location.  Rental wise we are looking at £700 per calendar month so the yield would be 5.6%.  

An excellent rental proposition it can be seen at

http://www.zoopla.co.uk/for-sale/details/32844807

Property values rise by £139 per week in Weymout

Last week a Landlord who lives in Dorchester came into our office to discuss rising property values in our part of Dorset.  He owns a varied portfolio of rental properties in Weymouth and Dorchester.  He thought that Weymouth prices were beginning to move.  What I discovered surprised him and I must say myself.

Over the last two years in Weymouth average property prices have risen by £139 per week  but over the last 12 months that increase has been only £44 per week meaning that the growth has slowed considerably over the last 12 months.   In Dorchester a similar scenario has played out - the overall growth over 2 years  has been £33 a week, significantly less!  However any rise in a towns average property values suggests that the market is recovering steadily – good news for home-owners and landlords alike.

When considering a landlords buy to let  portfolio yields can be in the order of 4-7% per year, depending on where you buy, so it is best to combine that with steady rental growth and good capital increases in the value of the properties themselves.    With prices’ locally bucking the national trend of galloping inflation but with some steady growth there already now could be the time to invest in the property market before prices start to rocket.   If you would like any advice about buying to let, whether you are an established landlord with a portfolio or someone thinking to put a toe in the water of the rental market please do pop into our office in Weymouth at the top of St Thomas street.

4 reasons why referencing a new tenant is vital

Good Afternoon                                                          

One of the most important things an agent will do for a landlord is to reference potential tenants.  Tenants fall into 2 different categories-dishonest and honest.   Professional referencing helps to sort one from the other.

As we go through life things happen that we cannot always control-if they are financial we get a bad credit file which can stay with us for many years.  When we need to move house either as a tenant or a buyer we need a good credit file in order to satisfy a potential landlord or lender.  In the letting business I come across all sorts of oddities. There was the case of the gentleman who had been through a bad divorce, taken help from the local benefits office fraudulently then moved area and then wondered why we wouldn’t let to him after we discovered he had a CCJ against him for £32000.00!

  That is an extreme case but we get many cases where people have had problems with mobile phone companies and similar and judgements against them for small amounts - often £100 or less.  The point is here that if they tell us that they have had a small problem in the past it is more  likely that we can take a lenient view of the tenant and let them a property (after discussing it with their potential landlord- all landlords are shown a copy of their future tenants referencing here at Martin and Co, Weymouth)   If that tenant denies the problem from the beginning we cannot get an accept under any circumstances.  This is typical of the ‘naïve’ tenant

An informed tenant will be honest and truthful right from the start and we will work with them in order to secure them a let.

Private landlords do not have easy access to referencing and are taking a big risk with their investment.  A previous landlord will probably send in a glowing report just to get rid of their problem tenant.  Tenants will often say they have brought their references with them.  How easy is it to produce a letter from a fake employer or landlord.  As a landlord you have to weigh up all these points and calculate the risk you are taking putting a poorly referenced tenant into your property.

We had a tenant recently whose previous landlord had gone awol.  No reference!  So we asked for his bank statements which showed his salary being regularly paid and his rent going out, it also showed the return of his deposit which when cross referenced with his previous tenancy showed that the complete deposit was returned – no deductions.  Meaning of course that he left the property in good condition! Together with his employers letter showing full employment we were able to prove to the new landlord that this tenant was a responsible reliable person.

So, the 4 reasons are

1 A credit check can find issues that may go back years (6) –if we know what they are we can take a judgement-it can also catch a tenant out.

2 A good reference proves affordability-do they earn enough? and do they spend more than they earn?

3 Employment is checked

4 If the reference is a little ‘sticky’ we can ask for a guarantor-most people will have a friend who will stand by them-if they haven’t you would have to ask yourself ‘why?’

One of the added advantages of having a tenant referenced through Martin and Co Weymouth is that we can offer all new  landlords a FREE 6 month rent guarantee on every let supported by acceptable references.  This is on the property and will remain in force even if the tenants change - if you decide to continue with it after the initial free 6 months  If the tenant don’t pay we will!

Philip Wakefield    01/05/2014

www.martincoweymouth.co.uk