Derbyshire's buy to let Rule four

Rule #4 Condition Is Important
 
As a lettings agent, we’d prefer landlords to give us well presented properties in worse areas, than badly presented properties in good areas. That’s because nice tenants want nice properties, and as Ilkeston and Eastwood  has very few no go areas, people are more likely to be flexible on where they live, as opposed to what they live in. 

As such you should either buy a nice property, or buy a grubby one and make it nice. Don’t buy a grubby one and expect a tenant to take it as it is. Any tenant that does take it probably won’t be that good a tenant.

Ready to go - over 7% Yield in Ripley

A great little 2 bedroom terraced property in Ripley has caught my eye this week.  This property offers lots of space and looks clean and tidy with lots of modern features.  It looks ready to let and we think this could achieve £475pcm, meaning the gross yield would be in the region of 7.6%.  Book your viewing and then contact us to find you great tenants!

Ilkeston and Belper property prices .. the long climb back to 2007 prices

 

Some landlords have been speaking to me recently about stories in the press and their concerns about booming house prices and the next housing bubble in  Ilkeston or Belper. In the past few years, if you were going to be buying in Ilkeston or Belper, it was vital to ensure that you built in some capital growth by buying cheaply or finding a way to add value.  In the last six months, properties in both towns have risen by between 2% and 3%, some even have been going for their ‘full’ asking prices, so are properties too expensive. 

 

Over the last few months, the value of those 2 bed starter homes  in Shipley Common area of Ilkeston (I choose them because everyone knows them) have nearly returned back to the same level they were selling in at the 2007 peak of around £80,000. So are we nearly back to the boom prices / values of 2007 then?

Yes and No. Yes, the headline price for the property sells for is the same figure (ie £80k in 2007 and £80k in 2014), yet No, because these headline figures don't take into account inflation. Since 2007, inflation has risen by around 19%. If  ‘2007 property prices’ had kept up with inflation, that same 2 bed house wouldn’t be £80,000 today but £80,000 plus 19% inflation which equals £95,200. Most people think inflation is a bad thing, eating away at the real value of your savings. It can however, be advantageous to property investors. 

My answer to landlords is get the best advice and opinion you can. Speak to me, speak to others, do your homework and drive a hard bargain when buying, thus ensuring when prices do start to rise again, you are in pole position.

If you would like to receive our monthly newsletter by email, offering information and advice on the local property market, then please register here

If you are a landlord, new or old, we’re certainly more than happy for you to email me on lettings@sprucetree.co.uk for our advice on what (or not) makes a good buy to let investment.

 

 

 

 

 

 

 

Extended 2 Bed Marehay

 

New to the market in The Gardens, Marehay, this 2 bedroom property on with Home2Sell offers an extended living area including a garden room and utility room.  Also having it’s own allocated parking space and a garage means there will be plenty of space for most families.  Modern and extended will be two big pluses for potential renters. We think this can perhaps achieve a gross yield of 5.7% to 6.03% based on a monthly rent of £475 - £495  per calendar month.

 

How can you find a good property deal in Ilkeston? .. or even Heanor!

 

The subject of a lack of Ilkeston, Heanor, Eastwood and Belper property bargains over the last couple of years has always been near the top of most local landlord’s thoughts. I have built up an extensive database of every property sale in Amber Valley, Erewash and Broxtowe since the late 1990 ’s, so are able to give an objective and unbiased opinion on what (and what doesn't) make a good property deal /investment. Knowing what is and what has happened to the property market in our area, compared to say Derby or Chesterfield, enables me to spot any trends or opportunities for buy to let landlords. 

Here are some bargains that I spotted at the time and made a note of. It’s obvious other people thought the same as some have now resold a few years later. A 2 bed mid terraced on Depedale Avenue in Ilkeston sold in August 2012 for just £64,950. Admittedly it needed a some TLC and a lick of paint, but what a bargain, because they sold it again a few weeks ago for £84,000 .... a 29% increase in just 18 months. If you were wanting something in Heanor, one buyer paid £110,000 in the late summer of 2011 for a Victorian detached house on Wellington Road, selling at the back end of last year for £124,500 . 

Whether you are a landlord of ours or not or someone thinking of investing in rental market for the first time, drop by our offices for any advice and opinion on where the bargains are in the area. You see, as I don’t sell property, I can look at the whole of the market. Please either ring me on on 01332 910499 or email on lettings@sprucetree.co.uk

If you would like to receive our monthly newsletter by email, offering information and advice on the local property market, then please register here

Smart and Funky in Heanor

This Victorian Terraced house on Marshall Street in Heanor for £92,500 with Henry Simms represents an ideal opportunity for a buy to let investor.  Smart and funky and will plenty of space it’s bound to attract a wide range of people.  We believe it could achieve a monthly rent of £475 to £495pcm, which gives a minimum gross yield of 6.1%  This property looks ready to let without much fuss.  Book a viewing and then give us a call to see how we can help.

Family Home under £100,000 in Eastwood

Decent family homes in good areas are always hard to come by.  This is why this spacious 3 bedroom home in Wilson Road, Eastwood caught my eye.  It’s being marketed by Your Move for £99,950. It may need a bit of a tidy up but I think it is likely to bring in a rent income of circa £550pcm.  That’s a potential gross yield of 6.6%.  With good transport links on the doorstep, this property will attract families and commuters.  It’s worth viewing to see if this could be the first or indeed next property in your portfolio!

Derbyshire buy to let rule three

Rule # 3 - Keep Your Figures Realistic

People need a lot of money to afford a deposit at the moment, so many are renting instead. This means there’s good demand for rental property, and we lettings agents can rent most things, often for a premium. 
However at some point this will change. As such don’t assume that just because you can currently rent a tatty property, that will always be the case, and don’t assume because some estate agent is promising to get you £x in rental, that it will rent at that price for ever. 
Do your figures on a worst case scenario and you should end up with your expectations being exceeded, not unrealised.

3 Bed 7+% Yield in Ilkeston

I have seen this 3 bed mid terraced on Peveril Drive in Ilkeston up with Renshaw Estates for £77,000. This is an interesting ex-local authority estate and our experience shows that these properties are quite spacious with good-sized gardens and attract rents of £450 or more per calendar month.

Whilst this one is a little basic it is clean, has a downstairs wc and looks fair value at £77,000 – making at least a 7% yield.

Have a look and let me know what you think!

 

 

3 Bed in Belper Less than £90k, over 7.5% Yield

We can never get enough properties to let in Belper - such is the strength of demand - and an interesting extended 3 bedroom end terraced property on Hunter Road caught my eye today, marketed for just £89,950!  I believe with a lick of paint and some new carpets this property could easily yield 7.8% if an asking price of £550pcm were applied.  Likely to rent quickly to families being close to both Belper School and Pottery Primary School, we think this is one not to be missed.

Great 8% Rental Yield in Ilkeston

This 2 bedroom property on PrinceStreet in Ilkeston has just come on to the market with 4Sale2U for £70,000. 

A smart modern interior awaits interested investors.  Likely to be snapped up quickly by renters with it’s open plan interior.  We anticipate  it’s likely to rent out for between £450-£475 per calendar month and provide a healthy yield of around 8%! 

Definitely one to check out as a higher-yielding family home.

If you want to have a chat about this or any other properties then give us a call on 01332 910499

Amber Valley/ Erewash and Broxtowe .. good time to buy property?

Following last week’s article, I had an interesting chat with a chap who lives in  West Hallam. He is thinking of buying his first buy to let property and he wanted my opinion on the state of the market and if it was a good time to invest. 

He was particularly worried that with all the newspaper headlines of a booming housing market, there wouldn’t be any tenant demand for rented property. One of the best pieces of advice I can give to those looking to invest in property is a simple trick of the trade. You can judge the affordability of an area’s property market (and thus how much demand there could be) by simply finding the ratio of the average property price to the average salary. The lower the ratio, the more affordable property is.

When we put this to the test, we found that Ilkeston currently has an average property value of around £133,200 with the average salary being £18,528 per year. This is a ratio of 1 to 7.18. Meanwhile in Heanor, the ratio of property values to salary is 1 to 7.38 (as average salaries are £17,906 and values £132,200). Belper’s property values are an average £198,600, so with average salaries of £25,330, this gives a similar ratio of 1 to 7.84. However, it’s the buyers of Eastwood that should feel the happiest, with a much lower ratio of 1 to 5.66 (as average property values are £111,500 and salaries are in fact £19,675 ...Ikea must pay well!).

All these ratios are very fair, compared with other parts of the UK.  However, the issue isn’t affordability, it’s the raising of the 5% deposit, which when you add buying fees and costs, will be in the order of between £7,000 and £12,000. Tenant’s inability to raise that sort of money for the deposit is driving demand for rental property. If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in rental market, please ring me on 01332 910499 or email on lettings@sprucetree.co.uk

Opportunity? 4 Bedroom House under £100k in Heanor

Recent trends suggest there’s going to be a big increase in demand for larger family homes and this 4 bedroom property caught my eye on Derby Road in Heanor, marketed by Whitegates.  

This property offers vast amounts of space over 3 floors.  This property is bright, modern and ready to let.  We anticipate an easy rent of £500pcm could be achieved which, at the asking price of £99,000, would yield a gross rent of  6%.  Surely to be a popular choice of property due to it’s convenient location. 

Why not book a viewing to see if this can be a winner for you?

Worth a look - Fisher Court, Ilkeston up to 7% Yield

I saw this property on Fisher Court on the market with Your Move Ilkeston, which could rent for between £425 and £450 per month - good value for a 3 bed family home.

It looks ready to rent out with minimal input from any potential buy to let investor.   

Should be worthwhile booking a viewing directly with the agent. As ever, someone will take this, especially as the property is priced at the lower end of what is currently a fast moving market.

Derbyshire Buy to let rule two

Rule #2 Detach Yourself

YOU will not live in the property you buy. 

As such, whether YOU like it isn’t the primary consideration! 

This is a business transaction, and as such the question is whether it works from a business perspective?

Amber Valley/Erewash/Broxtowe Property market’s – tale of 4 very different towns

Following last week’s article about how property values had risen, I thought I would share that the weekly prices rises are only part of the story. Whilst the weekly property value increases in pound notes show some towns better than others, one must look at the percentage increases as well to get the full picture.

Out of Ilkeston, Heanor, Eastwood and Belper, the best performing town was Heanor, with property values increasing on average 8.4% in the last 12 months. Silver medal goes to Eastwood at 5.3% over the same time frame and Bronze is a photo finish, with Ilkeston piping the post with increases of 4.3% and Belper at 4.2%

So is Heanor best to invest in? Not necessarily! Property ownership is a long term consideration. Today’s Ilkeston’s property values are only 5.1% higher than they were 3 years ago (so you can see most of that increase has been in the last 12 months). Heanor’s property values are a more impressive 8.5% higher and Eastwood’s are 8.2% higher than 3 years ago. However, it’s Belper that is the big surprise. Yes, it’s true property values are 4.2% higher than they were a year ago, but here’s the surprise, they are in fact 1% lower than they were 3 years ago.

Investing in property is also about the yield / annual yield that a landlord can earn each year as well. Interestingly, Eastwood landlords have the highest average yields of 5%, with Ilkeston and Heanor having average yields of 4.1% per year.  Belper’s average yield is only 3.2% per year, but landlords are compensated with higher property values
  As I have a database of all the house sales going back to 1999, I can keep an eye on the trends and see where the hot spots are for investment. If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in rental market for the first time, please ring me on 01332 910499 or email on lettings@sprucetree.co.uk

Nottingham Student lettings - take care you dont lose your Article 4 licence

I always tell Nottingham  landlords, capital growth and yield are two phrases that are one and the same with property investment and can have a big impact on the long term results of your property investment. 

Student letting is high reward (high yield) but high risk. The council imposed their Article 4 legislation a few years back, which means no more houses in the majority of the town can be converted into student accommodation. This however, is not the issue. There is in fact an oversupply of student accommodation in the city, with most students preferring to live in modern swanky apartments on campus than that of woodchipped wallpapered 8 bed Victorian houses with one shared bathroom and draughty single glazed windows.
Today’s students have a higher expectation of quality in their accommodation. They expect their properties to be ‘Lam and Mag’d with matching dark wood Ikea furniture, flat screen LCD telly on the wall and leather Sleigh bed’ (Lam = laminate floor and Mag’d = magnolia walls). Students will not pay £85 per person per week for a draughty old house, with mix and ‘not match’ second hand furniture that has come from a clearance sale, threadbare carpets and the famous wood chip wall paper.

Come the Summer, there will be student properties that don’t let. This is where the issue of Article 4 will kick in and potentially hurt the student landlord population. Landlords with an existing student property (they are called Houses under Multiple Occupation shortened to HMO’s) will be very reluctant to rent to a family in the year if it means they lose their HMO status. By putting a family in an existing HMO property, Article 4 rules mean you have changed the ‘use’ from a shared house (HMO) to a private dwelling. You would therefore need to apply to the Planning Department for planning permission if you wanted to put students in in the next academic year. Would you get planiing permission? Doubtful

One option is to drastically reduce your asking rent to the £70’s, even £60’s per week, making your Nottingham  student let, the bargain of the week, for cost-conscious students. You could consider throwing some extras, like free Sky Sports or wifi or even a cleaner?
However, you will always be chasing your rent downwards over the coming years, as more and more purpose built modern halls of residences get built. If you are in the student rental game for the long term, one option would be to let the property go empty or void (this doesn’t affect the HMO status) this coming Summer, ‘Lam and Mag’ in July and August, take your trailer down to the Ikea in Eastwood .. make it show home style .. take some fabulous internal pictures (for future marketing) and launch the property back in September to the overseas Post grad students. It should go in days and at a full rent at £90 or even £95 per week and incentivise the post grads to keep the property ship shape when undergrads start looking in November for the next academic years. Again, if its top draw, it will go quickly and at full price.

Every landlord and every property is different, but if you are an Nottingham  landlord, with student property, there are many options for you to consider. I don't charge for my advice because if I offer you the best opinion and we build a relationship, then you might (and there is no obligation or expectation to this) just use me to manage those properties and so I have plenty of time to earn money from you by looking after your buy to let property for years to come.