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

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

Guildford Buy-to-Let Advice

With interest rates low, and rents rising, many people are looking to invest in property for the first time.
Below, we give some basic tips to help investors find the right property. Above all, please contact a Specialist Letting Agent before putting an offer on a property. Any Estate Agent that does Sales and Lettings could be compromised on the advice they give, or simply not understand lettings. I had one such agent offer me a flat with a yield of 4.5% and try to tell me it was a great buy to let property. Knowing I could get 8% else where for my money it made me worry how much poor advise is given to first time investors.




1.) Beware of the... wrong property

It’s essential that you invest in the right property. The wrong property can easily stay vacant for extended periods and, even when let, may only achieve a low rental return. Furthermore, a wrong property may need extensive refurbishment that may mean little return for quite a time.”

There are a range of problem outcomes if landlords buy the wrong property or the wrong type of property. The sharpest of these is demand-related which can lead to adverse time to let, high turnover of tenants and lengthy void periods etc.

Also buying ‘project properties’ if you have don’t have the time and resources to complete quickly and to a good standard can have the same outcomes. The key thing is to buy appropriate to the local market, staying with mainstream properties that have high local demand. Buying to the taste of the model age range of tenants and not for your own tastes is also important.

If in doubt, Belvoir Lettings Guildford will be able to advise you on the type of properties currently in demand in your area.

Good letting agents know what properties let well in their area and are best placed to advise you on this at the pre-purchase stage, helping you to narrow down your search criteria.

Letting properties is what letting agents do day in and day out, so it is a good investment of your time to talk to them before you arrive at their office with your set of keys and you see their smile fade.

As investing in the right property depends on local demand, you must speak with a local lettings specialist. They will be able to advise what tenants are looking for, what they expect internally and what else makes a property attractive to tenants. We often speak to the landlord for the first time after they have bought the property, and know we could have pointed them in the direction of a better investment for both yield and capital growth.


2.) Beware of the... wrong location

The old adage of ‘location, location, location’ is still true. The best yields are achieved from properties close to good schools, routes into and out of towns and close to train stations etc. However, you should also look at properties in improving areas where yields should increase at some time in the future.

Phrases become clichés when they are true and they should be ignored at your peril; ‘location, location, location’ is one such phrase. Another is also true: ‘you can lead a tenant to a property but you can’t make them take it’ – so a good property in a bad area isn’t worth looking at.

And make sure you carefully research local perception and the surrounding areas of the property you’re considering for investment – just as a prime location is likely to be reflected in the rental return, a property’s proximity to less desirable areas may have an impact on tenant demand too.

The right location will always command the best rental returns, ensure that the properties are always tenanted and that property maintenance is at a minimum.


3.) Beware of the... wrong price

The rental yield is based on a ‘return on investment’ calculation, so the original investment value is critical to achieving the best return. It is worth researching sold prices online, as these are a good benchmark for what values properties can achieve in a chosen area. A property purchased at the wrong price can be disastrous, since your exit plan cannot easily be met and it is likely that you will have to keep the property longer than needed to get the required sales price.

It’s always important to think of an investment property in terms of short-term rental return and long-term capital appreciation.

Rental properties have two income streams. Yield, this is the % the property makes per year and can be directly compared to something like interest in a savings account. If the rental yield of a property is going to be low it is pointless entertaining it as you may as well put your money in a savings account. Capital appreciation in the property is the second stream. If you buy low to start with your appreciation will be greater from the outset.

Although rental yield is often a goal in itself, buying to let is after all an investment strategy – even if you are buying for your son or daughter to move in later, evidence suggests they often don’t. The principal strategy related to any investment is to buy as cheaply as possible and to sell for as much as possible. Although the market varies from area to area it is essentially a buyer’s market. Be dispassionate about the property when you view it, don’t get too attached and don’t throw money at it to secure it.

But, of course, cheaper doesn’t necessarily mean better and you must do your research thoroughly. A bargain isn’t a bargain if the property has fundamental problems or is in need of major renovation. If a property is too cheap then ask yourself why!


4.) Beware of the... wrong tenant

Getting the wrong tenant is every landlord’s worst nightmare. Not paying on time, not paying at all and not respecting the property are among the long list of problems faced if an unreliable tenant moves in.

The honest answer is that the law of averages operates in getting a good or bad tenant as it does in every aspect of life. It is impossible to eliminate risk entirely but it is possible to manage it down and, of course, to put in place a range of safeguards if the worst comes to the worst.

Previous landlord references are sometimes unreliable and you must exercise other forms of due diligence: ideally a credit report, but certainly securing photographic ID and employer references etc.

Using an accredited letting agent to find the tenant for you can help reduce the risk of getting a ‘bad’ tenant.

And, even if you are using an agent, make sure you meet your potential tenant in person too. Good referencing backed up with a subjective gut feeling about the person is the best way to get the right tenant.


5.) Beware of the... wrong agent

A good agent will manage all of the above to ensure that you get the best property and tenants. Belvoir Guildford always approach each property and tenancy as if it were our own experience – would I live in this property? Would I let them live in my property?”

Lettings agents will also market the property on your behalf and will be on hand for any advice you may need.

Once on board letting agents know which advertising channels work, will exercise due diligence on your behalf in terms of tenant referencing and will keep you on the right side of your legal responsibilities as a landlord.
And, when choosing an agent, don’t make your decision based on fees alone.

Just going for the cheapest agent is not the way forward. You may have saved 1% or 2% by going to a cheaper agent but in the long-run you may lose out if they do not place a tenant quickly resulting in costly voids. And, if the tenant they do place is unsuitable, the result may be no rent being paid at all potentially leading to legal fees and lost revenue.”

To find the right agent for you, always look for honesty, integrity, quality of service, the knowledge of the staff and a professional approach. Go online and check your chosen agent’s reviews and ask how many tenants are in arrears as a proportion of their managed properties. Additional membership such as NALS, Safe AGENT and The Property Ombudsman should indicate that robust procedures are in place to avoid nightmare tenancies.


Get it right!

Property
Location
Purchase price
Type of tenant
Monthly rental income
Choice of agent
Maintenance
Insurance
Tenancy agreement
Marketing

Accepting rent in advance - is it as easy as it should be?

It has come to my attention that the Housing Act has thrown up another potential issues for landlords that it was never intended to.
It can be every landlords dream when a prospective tenant might not be a UK citizen or have an appropriate guarantor, the cash rich tenant offers to pay the full rental amount for the fixed term. Most landlords, quite rightly would happily accept this but there are potential pitfalls one must be careful about.

Firstly, The Housing Act 2004 states that a deposit is:

..."any money intended to be held (by the landlord or otherwise) as security for -

a) the performance of any obligations of the tenant; or

b) the discharge of any liability of his;

arising under or in connection with the tenancy'."

So, in theory this could be mean that by taking the rent in advance, this money is taken against the tenants obligations and should therefore be registered with a relevant scheme!! There have been court cases where judges have interpreted it as just this, so be careful.

The obvious way to prevent this interpretation is adjust the period from monthly rent of let's say £1000 to annual rent of £12000. Great, so now the rent paid in advance can't but seen as a deposit....BUT


What about serving notice? Notice must be 1 period and not less than 2 months. What if after 10 months you needed possession of the property, remember the tenant wouldn't have passed normal referencing criteria so will they pay the rent come month13??

The solution is to serve notice at the start of the tenancy, plus stating that the period is annual not monthly.This way the rent can only be seen as rent and the notice period complies with legislation.

I urge any landlords that have received rent in advance to have a look at the wording of their tenancy and if it is a monthly period and/or they haven't served notice at the start of the tenancy - pray! Then think about whether they are using the right agent.

Belvoir Lettings Guildford will continue to protect their landlords as court cases set precedences. If you are looking for expert advice from a specialist agent in the Guildford area please call and we will see how we can help.

Landlords need to protect their Wealth

It has come to my attention over the last few months that some landlords have made a catastrophic mistake in structuring their portfolio which could mean their spouse inherits absolutely none of the equity in their estate.
We had 2 separate portfolio landlord partnerships explain how they had done conveyancing "off the shelf" in the past. All their properties were set up as joint tenancy/ownership rather than tenants in common. This will mean when one of the 2 friends die, regardless of what was written in their will the other partner inherits the other half of the property - NOT their family!!
It also leaves the surviving investor with a large inheritance tax bill which could lead to the need to sell some of the portfolio.
If you want more advise on this either contact me on 01483 537200 or come to our FREE seminar on June 9th 2011 at The Mandolay Hotel, 36-40 London Rd, Guildford for 5.30pm-8.15pm

Letting market in Guildford Jan 2011

We have seen the start of the students looking for accommodation for next year. My advise to landlords in Guildford that are looking to rent out a property to students next year is below.
Firstly - Find out NOW if your current tenants are going to re-sign for another year. If they are not, although it feels early, now is the time to start the marketing of your property for August!
We are conducting about 4 viewings a day for students at the moment.
Liaise with your tenants and come to an arrangement for viewings - never assume you can just enter your property when you please.
Make it clear exactly what you are including in the rental price - i.e furniture, bills etc
Check the students all have a UK based guarantor and ensure all parties are aware they will be joint and severally liable before doing any viewings - this saves everyone time.
Check how sure the group is sure of their numbers, at this early stage it could change.
On securing an offer - make sure you take a holding fee and get an agreement to lease at a future date signed.
You should then obtain references for the tenants that want to rent your property AND their guarantor. Do credit checks and get employers references for the guarantors.
All this work can be done by a local Letting Agency in Guildford saving you lots of time and possibly securing youa higher rent whilst giving you peace of mind.
Before the move in make sure all the utility companies are informed, you have a statement of condition and lodge a deposit with a relevant scheme - remember you can be find 4 times the deposit if you dont lodge it correctly!
If you need any further advise on letting any property not just student ones, contact your local Guildford Letting Agent - Belvoir Lettings via www.belvoirlettings.com/guildford or call us on 01483 537200

Foxtons debt to be re-financed?

http://www.negotiator-magazine.co.uk/article/foxtons-financing-under-discussion-1459

Tips for tenants

When searching for a property make sure you know what you are looking for before asking to conduct viewings. Don't arrange 5-6 viewings on the same day, you just wont rememebr each property individually and might lose the one you liked. When you phone the agents about a property ask questions about the property - does it have a freezer? What size is the bedroom? Which floor is the flat on?
If you know you don't really want a ground floor flat then don't go and see one! Whilst visiting ones that in your heart you know you aren't going to want you are most likely giving time for other tenants to see the one you do want. A good agent almost wont let you view the property and will talk to you about move in dates, affordability, referencing criteria , move in costs and the type of property you really want before letting you view a property - they are doing you, any current occupier and themselves a big favour - this is real customer service. So today's top tip is, if you aren't able to compromise on something don't waste your time viewing it, get yourself a viewing at a property you may want by asking the agent as much as possible about the property before trying to arrange a viewing. Happy hunting!