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

Home owners Occupiers become Tenants and Landlords in one move!

There is a new trend gaining momentum in the residential lettings market – and it could be taking a foothold in Guildford over coming months.

“Double renting‟ is springing up all over the country – where home owners struggling to sell are taking up the option of letting out their existing home to provide an on-going income stream, whilst moving into another - lower cost – rental property themselves.

This has created a curious situation in which a home owner becomes both a landlord and a tenant. But for many it is the ideal solution if they are struggling to sell their property for the desired asking price. It means they can make alternative arrangements without playing the “waiting game‟ for a sale.
In this current market, with rents rising and very strong tenant demand, “double renting‟ offers a new and ideal solution for many people.

It is particularly suitable for owners and their families who are looking to move to another town or city because of a promotion or new job – or for families re-locating to a new area for a particular school. It is very lifestyle driven.

Changes in the family structure – such as parents deciding to downsize, or move to a different area once they have raised their children – are also factors.

With double renting, there is no stamp duty or associated legal costs, as there would be in a selling and buying situation. The process is instantaneous and it also enables home owners to stay “invested‟ in the property market. With property prices at an all time low, they can become renters themselves elsewhere and wait for the market to pick up and sell at a profit.

On the face of it, it is a perfect solution for certain people who need to re-locate quickly, but do not necessarily want to let go of their own family home.

But ,”double renters‟ need to ensure that they attract the right kind of tenant for their property; carry out detailed referencing and also conform with the wide range of insurance, legislative and health and safety requirements related to private property rental.

Here at Belvoir Guildford, our team of property specialists can provide expert guidance and assistance and ensure that the whole process is handled both professionally and efficiently, leaving property owners safe in the knowledge that their home – and investment - will be expertly managed and maintained whilst they are away from it.