Do the numbers ever lie?

I was asked about these 2 properties below by a landlord and she wanted to know if either would make a good investment. For obvious reasons she is keen to purchase below the £250k threshold to save £5 in stamp duty and is quite flexible about the type of tenants. So I thought I would do some investigation into the figures.

property 1 - Courtesy of sale agent Bourne
http://www.rightmove.co.uk/property-for-sale/property-28541232.html


It is a 3 bedroom end of terrace in Rowan Close, Bellfields. Over the last 5 years 12 out of the 88 properties on this road have sold, at an average of £189,916.
It is advertised at £250k, it looks like it needs some redecoration so one would have to budget for that in cost and void time after purchase, so offer £240k. Assuming the integrity of the building is fine and one does due diligence on the boiler and electrics, I think one needs to budget £5k-£10k for work plus 2 months void period after purchase (1month might be feasible but best to budget for 2). This would then let to a family for c£1150pcm with a yield of 5.52%. Alternatively, the floorplan shows it could be let furnished to students / sharers or even on a room by room basis and £1400 could be achieved= 6.72% yield!
The biggest factor to consider on this property is location as it is Bellfields and is about 1.5 miles from the station and town centre, long term this could mean more void periods. However, capital growth needs to be considered too and  Rowan Close has seen an increase of 15.48% over the last 5 years.
Below is a well presented 2 Bedroom flat in Onslow Village, just under 1 mile from the station. It is in a block of flats called Wilderness Ct on Wilderness Rd. This block has seen only 6 of the 35 flats change ownership in the last 5 years at an average price of £174,083. Capital growth in the block has been 14.03% over the last 5 years , so slightly behind Rowan Close. The flat would also rent our for c£1000pcm yielding just 4.8%.

property 2 - courtesy of sales agent G-Pees
http://www.rightmove.co.uk/property-for-sale/property-28610061.html



So, the figures suggest 2 things on the face of it
1- Rowan Close is a good investment
2- Perhaps Wilderness Court is overpriced, although there are similar flats in the town at that price.

I would conclude that Wilderness Court is not for an investor as one would also have ground rent and service charges on the leasehold.
However, I would also be nervous to recommend Rowan Close even though the numbers look good- because of the location,  unless of course you were prepared to put the work in and let it on a room by room basis to transient tenants.

There is so much to consider when investing, sometimes not just the numbers.

If you want free, no obligation advice of purchasing an investment property in Guildford or the surrounding areas or just want to talk property with us, please call on 01483 537200 or drop in for a coffee to our shop on Woodbridge Rd.

Facts about the Property Market in Fairlands, Guildford

A Landlord who invests in rental properties through out Guildford asked me about her home area of Fairlands along the Aldershot Rd.
What we found out was quite interesting. The average property value in Fairlands is £343,872, with the most expensive road in the estate being Fairlands Rd itself which also has the highest value property that has sold in the last 5 years, this being 43 Fairlands Rd that sold for £490k in July 2010.
The residents of Louis Field have been the busiest selling, with  22.9% of the properties on this road changing ownership in the last 5 years.
The average rent in Fairlands is c£1450pcm.
If you would like to come and discuss property in Guildford and the surrounding areas then feel free to call me on 01483 537200 or drop into our office on Woodbridge Rd, Guildford.

Ladygrove Drive outperforms Town Centre's York Rd

I had a customer that is looking to buy their first buy-to-let property in Guildford and they asked if a 1 bed flat in Burpham was a better investment than buying a similar flat close to the town centre and station.
Long standing theories suggest purchasing close to a town centre and railway station are a must for any investor but I thought I would look at the hard facts and numbers and see if this remained true for the Weylea estate.
If one looks at 1 bed flats / masionettes on Ladygrove Drive, the current average sale value is £187k. These would rent out for £800pcm providing a return of 5.1%. Comparing this to "tenant's alley", York Rd where average sale values are £203k with rents at a similar £800pcm, the yield of 4.7% is less in the town centre.
However, taking into account capital growth over the last 5 years, Ladygrove has seen 11.59% increase, equal to £20k compared to 15.49% on York Rd which equates to over £27k. This extra £7k amounts to over £115 per month extra growth on York Rd to Ladygrove Drive.
If you would like any advice on renting out or purchasing a property in Guildford or the surrounding areas please feel free to call me us on 01483 537200

Godalming or Guildford?

A long standing landlord of ours came into the office earlier this week as they are thinking of buying another property as an investment. They asked if Godalming was perhaps a better area to buy a 1 bed property in than Guildford, GU1.
This got me thinking as usually I would recommend GU1, but I decided to do some more research.
In GU7 there is certainly a higher percentage of home owner occupiers, in fact 71% vs only 65% for GU1 and 66% nationally.
The average value of a 1 Bed property in GU7 is £202,000 with an expected rent of £800 pcm giving a yield of 4.75. Whilst in GU1 the average value is £209,800 with rents of £875 yielding 5%.
However, further research shows that over the last 2 years prices have grown by a very healthy 9.84% in GU1, but GU7 has shown even better results with 11.04% growth.
If you are thinking of investing in property in the Guildford area please feel free to speak to us on 01483 537200 or drop into our office on Woodbridge Rd, Guildford. We can discuss your objectives and help you make an informed decision.

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What strategy works for you?

                                                         
A long standing landlord of ours and I had a discussion about the property market in Guildford, when the subject of risk against returns arose.

All investors are different in the way they play the property game. Some landlords prefer to accept a modest yield/return on their investment for an increased certainty of easily finding a quality tenant. Other landlords are interested in high returns, with a greater risk with regards to the quality of the tenant. Before you start playing, it is a good idea to have a game plan. Everyone wants their cake and eat it, chasing high yields and exceptional capital growth above the market average with a superb tenant, but it is wiser to prioritise one of these in line with your long term objectives.

For a low risk investment, you could buy property in the areas of Guildford which are perceived as being more desirable, such as along Epsom Rd or in the town centre , where you may be able to achieve an annual yield of around 4.5-5.5% with quality professional or corporate tenants.
If you don’t mind a more varied quality of tenant, such as students or professional sharers, you are likely to be rewarded with a higher annual yield of 6-7%. This level of risk can be typically taken with properties in North Guildford.

If you are after annual yields of 8%, you could take more of a risk with  houses of multiple occupancy or letting on a room by room basis with properties in Bellfields or Park Barn which may attract tenants of a more transitional nature and create more work.

If you would like any advice on choosing properties, come and see us at our office on Woodbirdge Rd or email guildford@belvoirlettings.com

GU1 vs GU2 - Which is best...there's only one way to find out!

As a winner of an ESTAs award, We often have people contact us to ask about what a good buy to let property is in Guildford and where within Guildford is the best place to buy.

Obviously the answer depends on your objectives, and whether you are aiming for a good yield or Capital Growth. I know you are probably reading this thinking I want both - but the market isn't that easy at the moment and it is important to talk through your personal circumstances so you don't buy the "wrong" type of property or in the "wrong" area in relations to your needs.

I thought I would share some info regarding average yield and average price increases, comparing GU1 vs GU2.

In the last year GU1 has seen an average increase in value of £3893 (0.98%) or £74.86p a week! GU2 has seen an increase in average value of 1.09% at £3509, or £67.48. So depending on how you view things, GU2 has been working harder for your money as the % increase is greater.

But - what about yields?

The average asking price for sale properties versus the average asking price for rent in the 2 postcodes is as follows:
GU1 4% yield
GU2 4.8% yield
So, again, GU2 works harder for your money!

However, each postcode attracts different types of tenants and a property in GU1 will sell quicker if the time came when you wanted to sell. So, it is important to understand your objectives prior to deciding the type of property you buy. Please feel free to drop into our office for coffee and a chat or pick up the phone if you want impartial advice on how to get 6+% yield.

2 Bed Flat in Town centre offers Good Yield

Here's a good property that's just come onto the market. It is marketed as an ideal investment and I would say the selling agent is right.



Below is the link to right move:

http://tinyurl.com/dypvq43

York Rd is prime "renting" location in Guildford as it is next to the London Rd station and only a few minutes walk to the main Guildford station and the Town centre. Now, I don't normally recommend 2 bed flats as they are slightly harder to let than the 1 beds or 2-3 bed houses with more space and garden etc.
However, this has come to market at a good price of £185k and should comfortably achieve £1000pcm, so around 6.5% Yield. We have just let a 1 bed on the road for £800 which is probably not presented as well as this 2 bed seems to be.

Due Diligence on this one would be:

• Leasehold - what is the length left and the ground rent / maintenance charges and who manages the block. Sometime these flats in York Rd have poorly maintained communal areas which will deter the higher quality tenants.
• Get the electrics and boiler checked out!
• Meet the neighbours - are they renting or do they own their flats.
• There is no EPC attached to the details at the moment, again it might not be double glazed.
• Consider the fact there is only a shower - this will affect re-sale value and prevent families with kids renting it. So be prepared for professional sharers - possible even a couple witha friend - then it becomes an HMO. Your tenants are unlikely to stay above the average 19months of a tenancy here, but voids are unlikely due to location.

If you want any other advice please call me on 01483 537200, we continue to offer free Buy to Let advice for potential investors in the Guildford area. We are not Estate Agents, we only do lettings so we can give impartial honest advice.

2 Bedroom flat with 6.5% yield

This recently modernised flat has just come on the sales market. I assume it has been done up by a developer as there is another flat similar, also new to the market, on for £165k. The marketing details don't currently show a floor plan so hard to gauge exactly but it states 2 double bedrooms. So I would assume a rent of £850pcm with no work to do to get it ready for lettings. In fact there is a tenant already in there, so best check the details of the current tenancy. Not sure why the current rent isn't shown???
 However, when properties have been done up, sometimes it can be done on the cheap so make sure you get a trusted plumber and electrician to service the boiler and check the electrics. Electrical Inspections cost as little as £110+VAT and a plumber call out should be circa £65. Bearing in mind what one pays for a survey it is money  very well spent.
Obviously the location isn't perfect as it is a bit further from the centre and there is no mention if it is freehold or leasehold. Grrr!
However, it looks a pretty straight forward no hassle investment.

Right move link below - pictures and details courtesy of Karltons.

http://tinyurl.com/asmsslz

Mansion tax ! ?

Well, there was lots in the media over the weekend regarding the  "Mansion Tax" which the Lib Dems have been proposing and it now looks like Labour will support it. So what are the possible implications?

I am not a politically active person and not much makes me get on my high horse but really, talk about one of the most unfair taxes.

The proposal is now potentially beyond just people that live in a £2m house but would cover any landlord's overall assets. At the moment it is unclear whether the tax is on £2m worth of property or £2m equity in the property - there is quite a difference, and if it just goes on the value there will be numerous people in the South East and property investors fearing the worse. I remember the poll tax riots because it was deemed unfair as it wasn't based on income, not an exact comparasion, I admit but landlords are seen as cash rich and fair game to the media and massess despite some of them working tirelssly to provide good housing, service to tenants and making their property business work. 17% of the country wouldn't be housed without them remember!

So, someone has worked hard, built their portfolio up successfully and been prudent with their money. They have used property to build up their pension, like the government keep telling us to do. They have paid Stamp duty when purchasing the property, they will have paid tax on their income from renting out the portolio, they will pay capital gains tax if they sell and they will pay inheritance tax when they pass away. But, that's not enough! Yet the government is desperate for people to arrange their own pensions and offer tax relief on deposits on those willing to gamble on the FTSE.

It is also worth mentioning that from April, the Council Tax relief on vacant unfurnsihed properties has been reduced from 6 months to 1 month - thus numerous landlords will have more contributions to make inbetween tenancies.

Here's a story thanks to Paul Fenton on a property forum, propertytribes....

"An economics teacher at a local school made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that, if socialism was fully adopted, no one would be poor and no one would be rich, and all would be equal.

The teacher then said, "OK, we will have an experiment in this class". All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for pounds - something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the teacher told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, and gives to those who do nothing, no-one will try or want to succeed. "

The point here is that, this tax is aimed at spreading wealth, but will only seriously affect aspirations of many hard working people, and can only lead to bringing people's aspirations down to the lowest denominator.
What will most landlords do? Well, until we know more detail it is hard to tell but don't be surprised if some sell stock to avoid the tax, or decide not to extend their portfolio, thus further reducing stock for the Private Rental Sector, thus pushing rents up higher - so who ends up paying? That's right, those that can't afford a house, generation rent / wannabe first time buyers,  - so much for wealth spreading.

I promise not to bleat about political things in the future and try to make it more local, but this has to be one of the worst thought through policies.
Comments welcome!

Excellent investment property.
This is the type of property that landlords in Guildford should be drooling over if they are looking to let to students. It is well located to the University (10-15min walk if you cut across the A3 at the fish and chip shop on Southway) and has the ideal layout to convert to a 4 Bed student house if you put a wall between the dining and living room. It is on the market at £250K , the sales particulars state it needs updating. Although hard to tell from the photos I suspect the kitchen will be OK for students and the main job will be new carpets (or laminate flooring) and repainting - probably c£2k. However, check closely when viewing.
Furnish it with a sofa, armchair, coffee table, whitegoods, beds, drawers, wardrobe (if not built in) and maybe desks and you are ready to go.
I urge due diligence on getting the boiler and electrics checked out and then allow for correct smoke alarms / heat sensor for an HMO - but it looks a great opportunity. Should let for £1600-£1650. £1650 vs a sale price of £250k is as good as 8% yield! Obviously you will try to get it for less than the £250k especially if the kitchen needs work, so your yield could be even higher.
You just need to get the timing right as the student market is seasonal but once set up on that regular annual cycle this would let quite easily.
For any advice regarding buying to let in Guildford or general lettings help, please feel free to call me on 01483 537200.






Right Move link:
http://tinyurl.com/ac6ret9



Please note the photos and floor plan and sales marketing details are via Mann Countrywide

Something to whet the appetite

So, with January as good as over, we have been asked a few times by landlords "How's the letting market started this year?". To which I would have to give a general positive response to. We saw huge demand from tenants straight after new year but this has tailored off a bit towards the end of January. We secured 14 lets this month but have found a couple of properties one would normally expect to go quite quickly stick a bit - often for no particular reason, or perhaps because the decor wasn't quite as good as other properties also on the market at that time. I feel this further underlines the importance of presenting a modern feel throughout, especially in the bathroom and kitchens plus the flooring.
February is looking likely to be a busy month with numerous move ins planed but most of all the "high yielding" student market kicks into full swing. If you have a student property in Guildford do not let you agent advertise it in June, it must be on NOW in order to secure tenancy at the best possible price for you. Speak to us for free advice if you wish!.

Anyway, I wanted to show a couple of potential investment properties that have come onto the market in the last 7 days within the Guildford area. They represent 2 ends of the spectrum.
The first is a 3 bed maisonette in Park Barn. OH NO! I hear you shout! Well, the truth is that this is not for the faint hearted. It is available for £180k and currently has been letting out for £1200pcm. That's a whopping 8.2% yield if purchased for £175k BUT - it is in a poor state of repair and should be freshed up if you want to attract half decent tenants. You will only get £1200 by letting it to students furnished and it will need a lick of paint, perhaps new carpets and even a new bathroom. The truth is, this is never going to be easy to sell on and won't out perform for capital growth due to the area / block of flats it is in, plus you will always be working hard at your tenancy due to the type of tenants. But hey - 8% if you have the stomach and are looking for the monthly yield. However - if you don't set it secured to students you could be facing voids or much lower rent.

The link to rightmove is below
http://tinyurl.com/acblecr



Perhaps for those that want an easier life is the property below. Priced at £242k this 3 bed house would attract a professional couple / family and although not as close to the town centre as you would like (1.5miles to the station) , it ticks a number of boxes to make it an interesting option. Obviously it is under the 250k threshold, it has a secure garden, garage, GCH and double glazed already, and is in Stoughton.
It looks like the flooring needs replacing - I would carpet the upstairs (£4-500max) and then put wood effect laminate downstairs. The bigger job is the kitchen (bathroom seems Ok), which would need modernising (5k?).
I would most definitely want a long tenancy and want to attract tenants that want to stay long - so I would ACCEPT PETS (hence the wood floor). Families with pets treat it as their home and due to other landlords not accepting them they stay longer, get it let, sit back and enjoy an easy tenancy at £1200pcm.
Buy at £235 to reflect the work required. So  nearly 6% if you spent £242k in total.



Link to rightmove:
http://tinyurl.com/ad8xnyk

All photos courtesy of Selling Agents Callards and Gascoigne Pees

A quick update on a lesser spotted item. I haven't seen one of these for while!
OK the rate isn't great at 5.49% but one never gets great rates with higher LTV products.

It looks like 85% LTV mortgages are available again - all heading in the right way as a bit of confidence is obviously returning to the lenders.

The link below the table will take you through to other offers with lower fees but higher deposit.

I think overall, the message is that this is an encouraging move

Max LTV	Initial Rate	Term	Completion fee	Booking fee	Incentives
85%	5.49% Discount	2 Years	2.5%	£130.00	No
85%	5.99% Discount	2 Years	2.5%	£130.00	No

http://www.belvoirlettings.com/btl-mortgages-p1025

Free Buy-toLet advice:

I thought I would start posting the occassional property that is on the sales market and discuss the pros and cons of each as an investment. With Guildford continuing to be seen as a great area to invest with relatively good yields and strong tenant demand, numerous people are looking to invest for the first time (partly due to low interest rates that aren't giving a good savings return but also offer a low repayment on the mortgage).
I would suggest you still speak to us and do your own due dilligence but this is quite a nice flat at £140K which doesn't look like it requires much work.
We currently manage one very similar to this a receive a monthly rent of £780, which based on £140k purchase price is 6.7% return - although it is a leasehold so you should check the ground rent and service charges etc.
Would appeal to a couple that work at the Hospital or Research Park or perhaps a doctor that is on a 1 year secondment to Royal Surrey.

See the full listing from the sales agent on the link below (copy and paste to browser)
http://tinyurl.com/ayggzz4