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

Property Sourcing in Guildford

Having run our seminar on Thursday 9th June, I thought I would summarise the main points we spoke about when looking to buy a good buy-to-let investment.
1- Think about your objectives, what is your goal? To get both capital growth and a good yield at the moment can be tricky.
2- The best yields will be 2-3 bed properties.
3- Student properties continue to offer potential yield of 7% if you buy in the right place with the right size bedrooms.
4- Capital growth investments can be either properties with the opportunity to make improvements or buy something the over 60s would like. An ageing population that has equity in their larger homes will be looking to downsize in 15 years time, Bungalows, 2 bed ground floor flats near hospitals, surgeries and mainline stations will grow at a quicker rate than average increases.
5- Speak to an impartial letting agent NOT an estate agent when seeking advise. An estate agent might point you in the direction of a property they are trying to sell not one that is right for you.
6- Use a specialist to manage your property, their fees are tax deductible.
7- Stay up to date with local housing regulations and plans. Speak to a local expert or the housing officer
8- Use a specialist conveyancing solicitor, don't do this on the cheap!
9- Speak to a wealth management expert to make sure you structure the ownership of your investment in the most tax efficient way.

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