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Friday 19 September 2014

Property File                       

Last Friday a Landlord called me to say that she loved the article in the paper but it wasn’t clear who had written it so I have tried to redress that this week.    All articles are on my blog so please go to macweymouth.blogspot.co.uk if you are interested. 
In this column it is my intention to discuss property issues in the Weymouth, Dorchester and Portland areas on a weekly basis that I believe will be of interest to investors, landlords and house purchasers.

Today I am going to look at buying two different types of semi detached property in two different areas in Weymouth, the first area is around Corporation Road just off Abbotsbury Road and the second on the other side specifically Knightsdale Road.  Both roads are popular with tenants and a house on Corporation will let for £775 to £800 and Knightsdale £825 to £850.

An important part of any property  investment is balancing the capital growth with the rental income so looking at our two examples our ex local authority house in Corporation Road will return 5.5% on a purchase price of £175k whereas our property in Knightsdale Road costing £210k  will return 4.5% nearly 20% less.
Capital growth wise, over the last 14 years both houses have risen in price by around £145 per week. The sensible money would therefore appear to be on a property in Corporation Road or in its immediate vicinity.  

If you have a particular property in mind please come and see me to discuss your investment!

 Philip Wakefield                               Martin and Co

                                                              01305 775504

Friday 12 September 2014

Is a one or two bed buy-to-let the best investment?


 Ok so you’ve decided to take the plunge, become a landlord and invest your savings in a buy to let apartment or flat in Weymouth in order to boost your income and try to build in a little capital growth.  What are the things to look out for when starting this search?

We had a similar brief a while ago from an investor who came into the office and this is the results of the research we did for him.

The average price for a one bed flat locally is around £80,000 and it would typically rent for £450 which gives a return of 6.75%

A two bed’s average rent is around £625 and costs on average £130000  giving you a return of 5.7% some 16% lower.   Capital appreciation over the long term is likely to be similar on both.  We have a healthy demand for both one bed and two beds so there is unlikely to be an advantage to owning either one or the other for letability.

As flats are leasehold consideration must be given to the management of the block.   If it is a large block managed by a professional management company the maintenance and fees can easily come to the equivalent of two months’ rent over a year, however if you are buying a flat in a converted house there is often little organised maintenance and it is done on a ‘just in time’ basis with the bills being shared by the leaseholders.   A purpose built flat with a professional management company will cost more to buy and run but the rent achieved can be up to £100 more per month.  It is important to factor in all these costs when doing your sums!

Comparing also two bed houses which have no expensive management fees to pay, cost on average in Weymouth in the region of £140,000 to £160,000 and will rent for £750 if they are nice. There is a constant good demand from potential tenants and the return here is up to 6.4%. with all the advantages of a freehold over a leasehold for you the owner.

If you are looking in Weymouth or Dorchester to make an investment such as this please pop into our office’s at 2 St Thomas Street, Weymouth for a chat when you are passing.
APW


Thursday 4 September 2014

The 5 do's of property investment


I've been meaning to write this article for quite  a while! Experience in the letting game is hard won but as a professional letting agent with some personal experience as well I feel at least a little qualified to offer the following opinions.   

In that time, I've seen loads of landlords buy loads of different properties. Some (in my view) have bought well. Others have bought less well (or to be precise been "sold something"). I've invested myself and have certainly bought things towards the start that I now regret - being within the industry has changed my perspective on what constitutes a good purchase! 

So what type of landlord seems to do well?

Do not overpay.

Property is an investment, so if you overpay at the start, you're forever playing catch up in terms of trying to make that investment work. Some buyers are happy to pay the market rate for a genuinely nice property. Others seek dilapidated properties at reduced prices and generally get good deals even though works are required. Either is fine, but what you want to avoid is paying good money for a property that's actually pretty average - and that's 80% of the market!

Do have your business head on

What I'm saying here is that those who become a landlord accidentally struggle to make it work for them. If the house you're renting out was once 'home', there's always going to be an opportunity to feel 'the lawn wasn't like that when I lived there' or 'there are some scratches on that wall I took ages painting'. If you rent out a place you've never lived in, anything the tenant does isn't as personal.

Do maintain your property(s)

It's important that any property is kept up to date. If you spend nothing on it, over a few years it will become dilapidated which affects the value of your investment. Equally if you don't repair things quickly, decent tenants will get fed up with you and leave. Your property will churn more frequently and your tenant quality will drop too. You're now in a downward spiral which will cost you far more in the long run than keeping your property in good repair.

Do not 'fiddle'.

No I am not talking about money here. Good tenants want the 'peaceful enjoyment' of their property and invariably get frustrated by landlords who are overly  attentive. We manage one property where I know the landlady (who's a really well meaning lady) has lost 3 tenants in the last few years because they feel like they are being 'supervised' - a property inspection on a 2 bed flat does not take 30 minutes and involve quizzing the tenants on their personal sleeping arrangements(!)

Do not become greedy.


You would be surprised how many landlords are OBSESSED with the amount of rent they are receiving. You can legally raise a rent every 12 months and this is the only date some landlords diarise - irrespective of whether the rental market or the state of the property justifies an increase - every year they force through a rental increase even if it's just a fiver. When you have a good tenant who looks after the property and is paying a decent rent anyway, this is a complete false economy as all it does is antagonise the tenant. It's the same with landlords who have got £x for a property previously and will dig their heels in until they get £x again - they fail to understand that you maximise your income by killing void periods and the costs associated with a change of tenant. If a good tenant comes along far better to take £10 less per month than lose a whole months rent in a void. Conversely landlords whose end of year figures look the best are those who've set a sensible rent to start off with, and once they have a decent tenant don't rock the boat.

House Investment Alert Alert Alert!!!!!!!!!!!!

House Investment Alert Alert Alert!!!!!!!!!!!!

Absolute cracker of an investment.



Three bed terrace in Clayton Close with two double bedrooms and a single, garden plus views for £130,000   This will rent quickly at £750.00 per month returning 6.9%  I am not sure why this has been missed  but it surely is an opportunity for someone!