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.