Friday, 27 February 2015

Why this might not be good time to get into the Thanet Buy to let market





The buy to let sector in Thanet, in fact the whole of the Kent buy to let sector is doing very well at the moment, but it can be a minefield. I could regale you with many stories where investors have got it tremendously wrong in Thanet, like in 2009 a four bed semi-detached house in need of improvement works  in Margate, which came onto the market for an asking price of £140,000.  There must have been a bidding war because the property sold for £145,100.  It sold again a few months ago for only £121,000, a drop of 17%. Interestingly, property values since the Summer of 2009 in Thanet have risen by 19.6%.
I have even seen some of those retirement apartments drop by 63.1% in value between the years 2010 and 2014 and a flat on Union Crescent which sold for less than when it was bought in 2005.  The thing is, I still see mistakes being made on a day by day basis in Thanet. You make even a small mistake, it could still prove very costly.
So what should you buy in Thanet? One option is Houses of Multiple Occupation (HMO’s). While they can be profitable, chiefly in the student market with Canterbury Christ Church University students, they can make things much more complex and costly, with the need for HMO licences etc. However, some landlords prefer the safer options with two and three bedroom modern town houses and semi-detached houses but these do not offer anywhere near as high risk as HMO properties but they certainly do appreciate in value alot quicker.  Every landlord has a different set of priorities when it comes to purchasing a buy to let property and that is why the advice I give is not a “one size fits all”. 
Mortgage rates on buy to let are really low at the moment and for the right property and person you can get rates below 3.9% if you put down a decent deposit of 25%, but the best rates are for deposits of  40% deposit, where I as type this, you can get a 5 year fixed rate buy to let mortgage from the Post Office for 3.65%. Also, the deposit will ensure you have plenty of equity in the property, if the property market stagnates in the future. The important thing to remember is the amount you can borrow is driven by the rental income, so it is vital you can identify a property with a decent yield that lets easily.
Finally though, if are investing so much time and money in building wealth for you and family, it is equally important for you to identify ways to protect it. Do not forget, if you spend years building a successful property empire in Thanet, when you pop your clogs, your family could face an inheritance tax bill of 40 %, which they would have to pay within six months of the death. In a buoyant market, selling in six months is not an issue, but what if the market was like it was in Thanet between 2008 and 2012, when things took seasons to sell, not weeks. Quite apart from losing nearly half of the assets you built for your family to the tax man, if they had to sell some your portfolio, possibly at a discount because the taxman wanted his money so quick, it might be wise to consider some life insurance that will offer protection against inheritance tax.
There are plenty of good advisors in Thanet that can help you with the mortgages and life insurance. We aren’t one, because we are a letting agent, but what we can help with is choosing the right Thanet property to buy. It’s in our interest to do so, because if we offer the best advice and opinion, you might consider (although there is no obligation) to trust us to manage the property. If you wish to discuss further please email me at a.munns@redstones.co.uk.



Wednesday, 18 February 2015

A 6.4% yielding property! A great buy!






http://www.rightmove.co.uk/property-for-sale/property-40382623.html




I saw this property listed at the weekend and I’m surprised is still for sale. Properties in this area rent for up to £750.00. That’s a yield of 6.4%. It looks quite tidy, perhaps a spot of magnolia here and there to spruce it up. I wish there were more properties like this for the price.
There’s a demand for good property at present. It’s a great market for landlords!


If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in the rental market please email me. a.munns@redstones.co.uk

Wednesday, 11 February 2015

This is a nice little buy to let




A great buy to let investment. Close to the QE2M. Decor looks in good order. These types of properties rent very easily. Needs a cheeky touch of magnolia in places to remove some of the bright colours.

I would expect a rental income of £725.00PCM . That's a great yield of 6%!

I don't expect this property to be  on the market for long, so don't hang about!


Friday, 6 February 2015

Apathy in the Ramsgate Property market


Apathy has hit the Ramsgate housing market as sellers await the outcome of the general election and stricter mortgage regulation suppresses buyer demand.  This is mirrored around the UK as Rightmove reported the number of homes registered for sale per estate agent fell to its lowest level for five years in December, with available stock 10 % lower than in the same month a year earlier.  However, in Ramsgate we actually bucked the trend because in December 2013, 435 properties were available for sale, whilst 12 months later in December 2014 the figure had risen by 20.4%, there being 524 properties available for sale in the town.
Looking at Ramsgate, in greater detail in the whole of 2014, in the Summer each estate agent in Ramsgate had on average 59 properties on its books (as there were a total of 593 properties up for sale in Ramsgate at the peak in the Summer just gone). Our research shows that number had dropped slightly to 53 per agent in January.  While the lack of new properties coming onto the market in the later months of 2014 in Ramsgate pushed asking prices up slightly from November to December, traditionally a quiet season for the housing market, property sellers will need to work hard in 2015 to complete a sale.
The length of time a property takes to sell has increased over the last few months. Two bedroom properties in Ramsgate are now taking 100 days to sell, three bedroom 91 days, four bedrooms 119 days, but here an interesting figure, one beds are taking on average 115 days to find a buyer.
2015 will be the year of the selective mover.  With only 428 brand new properties a year being built in Ramsgate since the turn of the Millennium, this woefully low and insufficient number of new buildings in the City over the past few decades and a systemic change in the type of properties homeowners want (with families splitting etc so we have too many larger houses and not enough smaller ones), buyers are becoming dissatisfied with, and therefore dismissive of what is up for sale.
I would confirm the heat has gone out of the Ramsgate property market and I anticipate a moderate reduction from the high transaction volumes seen in 2014. That might mean Ramsgate landlords could bag a bargain during this period of uncertainty, especially if the financial markets do not like the election outcome. Markets and buyers do not like uncertainty, but savvy Buy to let landlords know buy to let is a long term game, and irrespective of short term apathy, reduction in the quality and quantity of stock for homeowners to buy  or the election, if people don’t buy property they rent. Thanet Council aren’t building any more properties, the council house waiting list is decades, not years for the better type of property .. the only other place to get a roof over your head .. rent a property!  Good old Bricks and Mortar!

Therefore, if you are considering buying a property for investment in the near future, as I don't sell property, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. Email me on a.munns@redstones.co.uk.

Wednesday, 4 February 2015

Over 6% Yield on this Margate property



http://www.zoopla.co.uk/for-sale/details/35530398?search_identifier=756f2707eadd28487814367bbdcd403b#DFR7QLPzVGJUpLOB.97

This property is in a great location for a buy to let. Next to the QE2M hospital, local schools and amenities. Its a nice sized property for the price. Lack of internal photos suggests it may require freshening up on the inside.

Similar properties in this area rent up to £725.00. You would be looking at a yield of around 6.4%.

Prices for sale are on the up, so I would suggest buying earlier in the year to try and make sure you can get yourself a property bargain.