The Highs and Lows of Milton Avenue in the last 14 years.

A landlord I know has owned a few properties on Milton Avenue for the last thirteen (ish) years. She came in to our office to take advantage of our tea and coffee making facilities (me!) and to discuss the rise and fall of property prices on Milton Avenue and how this has affected her yield over the years.

In 2000, when she purchased her first property on Milton Avenue, the average value of a terraced house on the street was £44,649 which had a sharp rise to £86,879 by 2003. This rise in value continued and in 2006 the average value was £107,250. At the height of the property boom in this area, a terraced house on Milton Avenue had an average value of £113,028. This soon dropped and in 2009 - 2010 the average was £98,832, this year has seen the average value increase to around £108,000.

When she told me of the rents she had achieved on the street, they seemed fairly stable over the thirteen years. In 2003-2004 the average rent was £410 per month, in 2006 – 2007 this rose to £556, in the slump between 2008 – 2010 it dropped marginally to £540 and now the average rent in Milton Avenue is £575, dependant on the property’s accommodation. Therefore, a landlord could expect a respectable annual yield of around 6.4% on Milton Avenue at the moment.

If you would like some advice with your potential investment, please come and see us in our office along Northdown Road. I do make a great cuppa!

Data Source - Zoopla Sold Prices - Rightmove Plus

Who wants 7.6% -- 9% yield!?

This property has come on to the market with Cooke & Co estate agents. One bedroom flats are renting very well at the moment and  would achieve in the region of £350 and £375 each month. The current owner claims he had been receiving £400 a month but seems a bit high to me, but still achievable obviously. Properties like this don't need to have a lot of money thrown at them to get them up to a rentable standard. As long as there is a decent kitchen and bathroom, a lick of paint should suffice. So a purchase price of £55k (unless you can knock a bit off) and a minimum rent of £350 each month gives a cool gross yield of 7.6%. Lets imagine for arguments sake that you can purchase this one for £50k and you tart it up a bit. Rent it for £375 a month. You would be looking at a fantastic 9% gross yield! Not bad at all!

Check out the full particulars here

http://www.rightmove.co.uk/property-for-sale/property-46915450.html

Margate Terraced Property Values Increase By £266 Per Week

Regular readers may remember that recently I wrote about house prices in Ramsgate and the increase in the last year. So I thought I would do the same for Margate.

Over the last 12 months the average property value in Margate has risen by over £15,500 from £167,063 to £182,606. A very nice 9.3% increase. I took a closer look at terraced properties as they make up nearly 34% of the housing stock in Margate. The average cost of a terraced house at the moment is £162,497 which is £13,827 more than this time last year. A nice increase of £266 per week. 

One of my Landlords who invests all over East Kent has recently bought in Canterbury so I thought I would compare our Seaside town with the Student City. Interesting results.

Canterbury has a higher weekly increase in value of £298 but prices in Canterbury are higher than Margate so we need to note the percentages on this one. The percentage increase in Canterbury in the last year is 6.9%, which is still not a bad return. However this is trumped by Margate with its 9.3% increase. It is also worth noting that property in Westgate on Sea increased by over 11% and Broadstairs is nearly 13% which is a testament to how Thanet’s property market is performing. 

If you need any advice on what to buy and where to buy it then drop in for a cup of tea and a chat. Alternatively give me a ring or drop me an email on gavin.horton@belvoirlettings.com

Easy Peasy!

This property has just become available in Ramsgate. Within 0.25 mile to Ramsgate Train Station. It is in good rentable condition with modern kitchen that includes all the aplliances. There is outside space. The only downside to this property is the parking situation. However this is perfect for those who work in London. The property will rent in the region of £625 - £650 pcm giving you a yield of around 5.75% - 6% depending on how good a haggler you are! There is very minimal if any work needing doing so a tenant could be found immediately, meaning you will have very few costs before this one starts making you money! 

Selling agents are Miles and Barr in Ramsgate. Full particulars are here

 http://www.milesandbarr.co.uk/property/details/id/125044/#.VE5MxPmsU9Y

Winstanley Crescent or Dane Park Road...Which is the best investment?

I was talking to somebody last week about the St Lukes area of Ramsgate, she was considering becoming a landlord for the first time. She visited our office to ask us whether buying a property on Dane Park Road or Winstanley Crescent would make a better Buy to Let investment, and which would offer a better return/yield. She knew the area well, as she lived around there a few years ago. I confirmed that the properties on both streets let and sell well, but I wanted to do a bit more research to help with her choice...

The average price for a property on Winstanley Crescent is £141,404, while on Dane Park Road it was nearly 8% more, at £152,713. To better understand the investment opportunities available, we took a look at the rents achieved over the last year. The average rent achieved on Winstanley Crescent was £655 pcm giving a yield/return of 5.6%. On Dane Park Road the average rent was slightly lower, at £616 pcm, with a corresponding yield/return of 4.8%. We took a quick look to see what capital growth had been achieved in both roads and found that a 2 bedroom terrace in Dane Park Road was sold in 2000 for £46,000 and sold again earlier this year for £126,000 giving a capital growth of just over 93%. In Winstanley Crescent a similar property sold in 2000 for £51,950 and sold again in August this year for £149,500 giving a slightly higher capital growth of just under 97%. We found both streets to be as good as each other, but as you can see there is a difference in the yields/returns, which we would not have identified without the extra investigation. In this case it really comes down to the best available property to buy on the day.

If you are a landlord or investor, whether you deal with us or not, feel free to visit us at our office on Northdown Road to ask our opinion on which property investment is best for you.

Feeling confused about property investment? Get in touch gavin.horton@belvoirlettings.com

One House or Two Flats - What should you buy?

I often see investors who want to buy the biggest house they can find with their available cash.  But in the world of property investment we often find it is the investors who have divided their cash among as many properties as possible that benefit the most.  As an example I have seen that Ward and Partners are currently advertising a great family home in the Westcliff area of Ramsgate for £199,995.

It has all the hallmarks of being a great rental property, driveway, close to the train station and close to schools.  If I listed this house to rent the phone lines would go into meltdown with the amount of enquiries we would get.  Based on a buy to let mortgage of 75% the deposit would be around £50,000.  A conservative rental valuation would be £850 per month giving a yield of around 5.1%.

However if you had £50,000 cash I would be telling you to increase your yield, simply by buying two smaller properties.  I have seen a 2 bedroom maisonette on the other side of town being advertised at £99,995 and another 2 bedroom maisonette around the corner on Hardres Street for the same price.  Obviously not as attractive as the house, there are no driveways but the office phone would still ring and we would have tenants very quickly for both.  The £50,000 will buy both of these properties with a 25% deposit and I would give a conservative rental figure of £575 on each.  Combine both rents and that gives a rental yield of 6.9% - 27% higher than the yield for the house!

Here at Belvoir, we don’t sell properties so you can be 100% confident that our advice is impartial and will help ensure you won’t be pushed in to buying something that isn’t suitable when you visit estate agents. 

Great BTL property!

Great little BTL property here. Two double bedrooms and ready to rent straight away, keeping costs down! Id expect this property to rent in the region of £650-£675 pcm giving a gross yield of around 5.7 - 6%! Demand is high in this area so finding a decent tenant will not be difficult. We recently let an almost identical property not far from this one on the second day of marketing!  

See the full details here http://www.rightmove.co.uk/property-for-sale/property-32559492.html

Margate has some of the most affordable properties in the South East

An Investor came in to our office earlier this week to discuss the affordability of property in Margate, with the current national property market being in recovery with increasing house prices. The best advice I can give to those looking to invest in property is our secret trick of the trade. You can judge the affordability of a town 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 Margate currently has an average property value of around £151,759 with the average salary being £19,810. This is a respectable ratio of 1 to 7.6. Meanwhile in Herne Bay, the average asking price is £196,289 with the average salary being £21,006. The ratio of property values to salary is 1 to 9.4, which suggests the property in Herne Bay is 21% less affordable than in Margate.

We also had a look at Deal and found the average salary is £21,923 and the average property value is £204,298. This means that property in Deal is also a rather significant 20% less affordable than Margate, with a ratio of 1 to 9.3.

This could mean that now is a brilliant time to invest in Margate’s property market, while the average value of property is low compared to the average salary.

If you would like to talk to us about your potential investment or to see if you are maximising the potential of your current investments, please come into our office along Northdown road in Cliftonville or alternatively drop me an email on gavin.horton@belvoirlettings.com.

How is the local property market performing in Sandwich?

I have recently been helping a Landlord who has invested in rental properties throughout Thanet and was interested in extending her portfolio, but as a side project she asked me about the property market in her home town of Sandwich. Now we don’t actually cover that area with our property management service but I was more than happy to look into the market and see how it has been performing.

What I found out was quite interesting. The average value of a property in Sandwich is £284,942 which is £48,523 above the average of its neighbouring town of Deal. The most expensive street in Sandwich is St. Georges Place where an average property is worth in excess of £700,000. Only 13 properties have been sold in this street since the summer of 1995.

The most expensive property sold in Sandwich was a fantastic property on Strand Street, which sold for £757,000 in 2008. Quite recently, in April in fact, another property in Strand Street became the second most expensive property in Sandwich at £740,000. The average rent in Sandwich over the last 3 years has been £740 per month. According to land registry 103 properties have been sold in the last 12 months. Overall sale prices in Sandwich were up 11% on the previous year and 4% higher than the peak of 2007, this is slightly better than Deal who boast a 10% rise in the previous year and a 3% increase on the 2007 levels.

If you would like to come and discuss property in the area or need some advice on investing in property across the Isle of Thanet then you are welcome to visit our office in Margate or pick up the phone and give me a ring. 

Thanet Property - Do you know the Facts and Figures?

Here at Belvoir, we can guide you to the right places to identify property values and yields in Thanet and other useful property related information so you can make sure you get all the information you need about your future investments. Here are just a few property facts about our towns in Thanet....

There are 511 streets in the CT9 postcode area with 22,192 households, and of all those households 2,719 have changed hands in the last 5 years. In the Ramsgate area of CT11 there are 391 streets with 15,173 households and in the last 5 years 2,192 have changed hands. If we turn our attention to Broadstairs we can see there are 381 streets in the CT10 postcode with 12,628 households, and again looking at the last 5 years we can see that a little over 16% of these (2,070 to be precise) have changed hands. 

If I concentrate on Margate for this instance, we can report that compared to the national average – detached houses in Margate make up 15.34% of households with the national average being a little over 23%. Semi-detached houses make up 24.26% with the national average being 28%, 33.82% of households are terraced houses with the national average just above 31% and 26.58% of households are made up of flats compared to 17.28% nationally. Along with the fact that nearly 38% of occupants are in the privately rented sector we believe this is a good indication that Margate is a good place to buy a buy to let property.

If you would like more useful facts and figures pop in to see us at our office, we are situated along Northdown road in Cliftonville. 

Ramsgate property prices increase by £19,204 in the last year.

Last week, a landlord came in to our office to discuss the property values in Ramsgate. He owns a varied portfolio of rental properties, primarily in Ramsgate but also throughout Kent and is hoping to increase his portfolio. So it is interesting to compare the increase in property values around the areas and see what area is performing better.

Over the last 12 months the average property value in Ramsgate has risen by nearly £19,205 from £174,240 to £193,445. This is an excellent increase of 11.02%. When we looked at the values for detached houses, this average increase is even greater at £28,361. This is a considerable average increase of £545.40 per week.

When I looked at some of the surrounding towns, Ashford has a lower average increase in property value, at around £311 per week, whilst Deal has an even more modest average increase of around £291 per week. Come back in to Thanet and in Margate property has increased by around £414 per week. A great sign to see our towns outperform neighbouring areas. A great reason for people to invest in property on the Isle of Thanet.  

When considering this landlord’s buy to let portfolio, the rental values have remained fairly stable during the 12 months. They are slowly recovering to the average of around 5 years ago, therefore it could be a good time to invest in the property market in Thanet. If you would like some advice about buying to let, please come and see us at our office in Northdown road in Cliftonville. 

Buy To Let deal of the week!

On my morning travels of Rightmove this morning I noticed this little gem. It is a two bedroom terrace house situated in garlinge high street. The property is in great rental condition and would not require any works so could be available to let immediately. The current price is £119,995 and the possible rental will be in the region of £650 pcm giving a very appealing 6.5% gross yield. If your negotiating skills are top notch and you are able to knock some ££££'s off the asking price then even more reaon to grab this one whilst you can!

The property is currently marketed byu Miles and Barr in Birchington. Here is the link on rightmove http://www.rightmove.co.uk/property-for-sale/property-31989177.html

I doubt this will hang around for long as it is in a desireable location, it has no chain and is priced reasonably No banana skins here! If you need any further information on the property markets or would like advice in general. Drop me a line on gavin.horton@belvoirlettings.com or call me 01843 293 293. 

Struggling to sell? Why not rent?

One of the main sources of new properties to the rental market over recent months has been from people who can't sell their property for a price they are happy with, so rent it instead. These properties are usually popular with tenants as by their nature, they tend to be family properties in nice areas. As such finding a tenant isn't usually an issue. However if you are an 'accidental landlord' the overall success of letting your property depends to a large extent on your understanding and acceptance of what being a landlord involves.

What do I need to do before I can rent my property?

The vast majority of this will be covered by a competent letting agent when they visit to appraise your property. Getting a couple of ARLA agents round will identify key points that come up again and again – these are the ones that really need your attention.

• Switch your buildings and contents insurance to a Landlord specific policy. Your insurer won't pay out if you haven't told them the property is rented.

• Get the relevant safety certification sorted out for your property. Again a competent agent will assist you with this.

• Sort out any little imperfections that you know exist in the property, and that you put up with yourself – once someone is paying you money to live there, they won't put up with it like you did. Cupboard doors that don't quite close properly are a classic example!

• Think health & safety! A small pond in the garden may have been fine whilst you lived in the house alone, but is not fine if your tenant has 2 small children. You must protect your own interests by dealing with issues such as this.

• Clean it! This isn't always the easiest thing to get across to someone who's lived in a property, but look at it this way – if you pay for a professional clean before the tenant moves in, you can expect the property back with a professional clean done too.

Will I be satisfied with the rental experience?

We find that 'accidental landlords' are often less satisfied with the whole rental experience than people who have bought property specifically as an investment. To an extent this is inevitable as renting the house is not ideally what they wanted to do. To make it work, your expectations need to be realistic:

• Detach yourself! Although you may have lived in the house for 10 years, at the point you rent it you need to make a bit of a mental adjustment – the property is no longer your home and is now a commercial investment! If anything it's someone else's home. The key thing for you is making the investment pay.

• Be flexible. Although you may love your flowery green carpet, this isn't something that will necessarily appeal to a tenant. Don't be offended if your agent politely suggests changing things like this – they only make suggestions like this because they know if will enable them to find YOU a tenant more quickly.

• Accept that a tenant rarely cares for a property quite as well as an owner. You should not expect damage, but you should expect wear and tear. If you rent to a family with young children, spills, scuffs and scrapes are inevitable – this is part and parcel of renting a property. In particular tenants rarely maintain a garden like an owner does – if you've spent the last 20 years developing prize winning flower beds, don't be surprised when the tenant doesn't share your enthusiasm!

• Don't drive by every day and worry! If they don't cut the front garden or clean the front windows quite as often as you did, you can't insist on them doing this, unless they are fundamentally neglecting things. What matters is that the property is returned to you at the end of the tenancy in the same condition it was given, minus reasonable wear and tear.

What does an agent do?

Most 'accidental landlords' choose an agent to manage their property, rather than doing so themselves, as they don't have experience of letting, and don't know much about tenancy law. It's always a good idea to get a couple of different ARLA agents round and listen to what each has to say – in that way you'll get a flavour of what each can offer. Remember that finding a tenant is the easy bit – the skill is in looking after the property on an ongoing basis. You'll find ARLA agents are better geared to do this than estate agents who have opened a lettings department.

Don't make the classic mistake of choosing the cheapest unregulated agent in town. Your rental property is one of the biggest financial commitments you'll make in your life, and you want some assurance firstly it is being properly looked after, and secondly that you have some redress if it isn't. 

If you would like to discuss renting your home, come and see us here at Belvoir. We are situated at 200 Northdown road in Cliftonville. Alternatively give us a ring on 01843 293 293.

Is the West Cliff area of Ramsgate the place to buy a buy to let?

A couple of weeks ago I had a couple pop their head through the doors of my offices on Northdown road. They live in Canterbury, near the Golf course, and wanted to pick my brains on buying their first buy to let property in Thanet. They were particularly interested in the West Cliff area of Ramsgate, particularly around the football ground.

Therefore, I looked at the area around Southwood road. From January this year, 27 properties have been let with 7 more currently on the market at the moment. The average time it is taking to let a property here (the time between first day of marketing and tenant moving in) is 27 days. This is important for investors to know as they should factor this in to their costs as it would be a month without income. As always it is worth taking into consideration the possible capital growth. I used a property in Hebert road as an example. It sold in April this year for £119,000 (am sure would have been more if the kitchen and bathroom had been modern) and in 2004 it was sold for £80,000 giving a capital growth figure of 48.75%. Sticking with this same property, the likely rent would be in the region of £750 giving a gross yield of 7.5%. With such excellent demand from tenants and excellent amenities surrounding this area (easy to reach bus links, less than a mile to the train station and local shops within walking distance) could this be the right area to purchase your next buy to let investment?

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. If you are a landlord, new or old, I am more than happy for you to pop in and see me or email on gavin.horton@belvoirlettings.com

Monoply in Margate. How would you play?

A couple of local landlords and I had a discussion about the property market in Margate, when the subject of risk against returns arose.

All Landlords are different in the way they play the property game. Some landlords prefer to accept a modest yield/return on their investment for an increased certainty of finding a quality tenant. Other Landlords are interested in high returns, with a greater risk with regards to the quality of tenant. Before you start playing, it is a good idea to have a game plan.

For a low risk investment, you could buy property in the areas of Margate which are perceived as being more desireable, such as the Palm Bay estate, where you can achieve annual yields in the region of 4-6%. If you don’t mind a slightly higher risk of void periods or varied quality of tenant, you will more than likely achieve higher yields in the region of 6-8%. The types of properties you would be looking at here would be in the Cliftonville area and generally be two bedroom apartments or three or four bedroom houses. If you are after higher yields of 9% and over, you could take more of a risk with houses of multiple occupancy but these are generally filled with less desireable tenants naturally leading to ongoing issues, therefore they are ideal for the risk takers amongst us.

If you are interested in investing in Thanet or need some advice on how to get the best out of your current property investments then come in and see us. Our office is along Northdown road in Cliftonville. 

Can you get a decent buy to let investment in Margate? You bet!

During our ‘Official Opening’ a couple of weeks ago where the Mayor of Margate kindly cut the ribbon on our shiny new office, I was chatting to a developer who has a very large portfolio of property throughout Thanet. We were chatting about the local towns and how Margate had seen an upturn in fortunes and had a ‘feel good’ factor to it. He informed me that he was no longer actively looking to invest in property because sale prices had risen yet rental prices were largely staying the same. Meaning he wasn’t getting the sort of yields he was after, and since he had no intention of selling or leveraging, capital growth didn’t have much of a hold on him.

I agreed with him to a certain extent that prices had risen and yields weren’t increasing like an investor would like, but only to those who weren’t actively looking. For instance, we recently had a Landlady who has only two properties, one she lives in and one she has recently bought as a pension fund if you like. So she is hardly a professional landlord.

We sat down with her back in February and together kept our eyes on the markets looking for something that would suit her needs, bring her steady income from a reliable tenant whilst also providing potential for significant capital growth.

We found her a property in Church Street in Margate. A 3 bedroom mid terrace, she bought it for £95,000. We have just let this property to a very reliable tenant who has not defaulted on rent for at least 11 years. We let it for £675 pcm. Giving a gross yield of 8.5%! Not bad! The property next door sold for £93,000 back in February this year. It sold back in 2000 for £48,500. So over the 14 years it has increased in value by over 91%. Therefore we managed to find her exactly what she is after. Admittedly it isn’t always possible, but if you are not actively seeking then you will not find.

So to summarise, yes the property market may be at a stage where it isn’t throwing out fantastic bargain after fantastic bargain, but there are some real gems out there. Be patient, speak to specialists, and be ready to pounce when you find it.

If you would like any help at all in finding your next investment then please come and see us, our office is along Northdown road. We look forward to meeting with you.

Come on, thats something to shout about! 

Ramsgate property market Vs Margate property market

I was in a discussion with a local landlord who lives in Ramsgate, we got chatting about where he was going to buy next. Interestingly, he had several properties throughout Thanet, Herne Bay, Canterbury and Sandwich. I did some research to find out how our local markets had been doing over the last year.

The average price of terraced property in Ramsgate sold last year was £152,399. When you consider the rents that are achieved for these type of properties are on average £662 per month, this gives us a Gross Yield of 5.2% per year.  In Margate last year, the average sold price for the same style property was £137,343 and would rent on average for £618 and give a gross yield of 5.4%.

This, however, is a great example of annual yield/return not being the only factor when choosing an investment property, as you should also consider how much the value of the property goes up in the long term. In the last 12 months, property values have only risen on average by 3% in Ramsgate. However, average property values in Margate have risen on average by 9% in the same time frame. Interestingly the Market in Margate is only 5% away from reaching the peaks of 2007 yet in Ramsgate it is 9% away from the peaks reached in 2007.  The question that every landlord must ask from their investment is, do you want capital value or yield?

I always tell investors, 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.

Many investors believe that by chasing high yielding properties they will make a faster profit than waiting for capital growth. The problem with this is that to achieve high yield you usually have to compromise on capital growth. Therefore, it would seem the most logical solution is to find high a yielding property in a strong capital growth area. Such properties don’t exist (or if they do, I don’t know of them!)

This is because, as I tell my landlords, there is generally an inverse relationship between yield and capital growth so the higher the yield, the lower the capital growth and the higher the capital growth, the lower the yield. This means property investment becomes all about balancing the scales. Whether you are a new landlord or an existing landlord our advice is completely free and impartial. So, feel free to pop into our office in Northdown Road, Cliftonville for a chat about the property market in our town.

Deal of the week is in Manston!

As I scrolled through the websites this week, I happened to stumble upon this little gem. Currently on the market at £115,000. It is a 2 bedroom maisonnette with allocated parking situated in a quiet rural location. The property would likely achieve a rental income circa £675pcm giving a gross yield of  7%.

For more information on similar bargains give me a ring 01843 293 293.

(This property is being marketed by xpertagents)

To buy a flat or not to buy a flat? That is the question.

A property investor from London called me last week looking for objective advice as he had been offered a ‘Below Market Value’ 2 bedroom apartment in a modern development in Margate.

Even before he told me the name of the development, I could work out where he meant and quickly steered him away from this, pointing him in the direction of the sort of properties in the CT9 postcode that may not be as ‘sexy’ as the one he’d been offered but will inevitably stack up as a much better investments.

We rarely advise investors to purchase flats or apartments in or around the Cliftonville area due to oversupply forcing rents down and also the constant churn of young tenants which will eat into their returns.

That said, flats should not be discounted out of hand, as they often require less maintenance and upkeep than houses and may be available more affordably – but we advise canny investors to do some stringent research which should lead to picking up a bargain and for a steadier stream of long term, working tenants.

In certain areas of Cliftonville and Margate there are developments of 2 bedroom flats that are always popular with tenants due to the proximity to transport links, the beaches, shops etc – in fact there is a 2 bedroom 2nd floor flat in Palm Bay that will easily achieve £600 pcm & therefore return 5.8% gross yield if the total cost of investment was £125,000. Given 2 similar flats in an identical block sold last year for around £145,000 this looks very realistic and achievable.

On the other side of Margate in Westbrook we always find it easy to rent the 2 bedroom flats that have been converted or newly built in the Royal Sea Bathing Complex to good working tenants. These versatile flats appeal to a wide range of tenants due to their handy location, close to Margate Station and the beach as the rear garden! Our newest Landlord has just let one for £695 pcm whilst she purchased it for £142,000 giving a gross yield of 5.9%.

To summarise, Flats and Apartments can prove to be a very astute investment. As long as you have the right knowledge and advice. So if you are thinking of investing then give us a call, we would be happy to help. 

What's happening with rental prices?

Recently, there's been a lot of talk in the national press about an increase in rental prices. People are beginning to struggle to buy houses currently due to the new strict lending criteria, and people also aren't moving out of rental property, so if you're looking for somewhere nice to rent, it's a lot harder to find something than it was say 12 months ago.

So have we seen rental prices increasing as a result? Certainly not across the board is the answer, and there are probably a few reasons for this:

1.               The natural time to change the rent is when your tenant vacates and you have a new one going in - only this isn't happening much at the moment. To change the rent, landlords have to apply for an increase mid tenancy - and whilst there is confidence in the market, it's still a brave landlord who calls his tenants bluff and risks losing them over a small rental increase.

2.               Property condition remains a massive factor in a Landlords ability to increase rent. When the newspapers state there is a shortage of rental property, they mean a shortage of good quality rental property. Whatever the market conditions, there's never a shortage of poor quality property to rent, and it's always hard to command a premium rent if the property is in poor order.

3.               In certain sectors of the market, there's still oversupply of property. Two bedroom apartments in Margate for example, are still in plentiful supply (70 out of the 148 properties currently available to rent in Margate are two bedroom flats), and getting a significant rental increase in this area is tricky business.

And what does the future hold for rental prices?  This isn't an easy question to answer, and if you ask three different 'experts', you'll get three different responses. As such the brutally honest response is probably "who knows"!

From my own perspective, I believe very strongly that the answer remains tied in to people's ability to buy property - as long as this remains difficult, people will have no choice other than to rent. This should keep demand high, and hold prices up too. If you are a landlord that has good quality property, you shouldn't have a problem 1) attracting a good quality tenant and 2) charging a decent rent. This hasn't always been the case though, so don't 3) start to think it's the norm and 4) base your future financial decisions on it!

Pop in and see us along Northdown road for some impartial advice if you are thinking of investing in property OR if you want me to look into a specific area or property for you then why not email me the details and I’ll happily help you out. (gavin.horton@belvoirlettings.com)

Whilst dining out the other evening the fire alarm went off in the restaurant, the waiter, who had been making me laugh all night, was quick to allay everyones fears with the following quip!

Well I thought it was funny!

The importance of an exit strategy

One of my landlords who has property in a number of UK towns came to the office for a coffee the other day and we got on to the subject of exit strategies. The three properties he has in Ramsgate, he told me, will be sold in 2019 and 2020. This was interesting, because the guy had genuinely planned to the last detail how he was going to exit the investment property market. How many other landlords could honestly say they had thought this far ahead?

Probably most haven’t, but they should. I asked a couple of other people I happened to speak to in the next 48 hours when they would exit the rental market, and got the sort of answers I expected – “in a few years when prices are higher” or “never, I want the income instead of a pension”. Some will get lucky and earn a few pounds in the process, while others will make less than they should have. The ones that make the most when they sell, will be the ones that have done proper research, made proper plans, and tied their property portfolio in with the rest of their financial affairs. Things they will look at include:

· What will it cost me to sell my portfolio?

· Will I incur loss of rent during the sale process?

· What are the mortgage implications (redemption penalties etc)?

· Are there leasehold implications (will I need to renew the lease before I sell)?

· What are the capital gains tax implications?

· Could there be an inheritance tax issue?

· What will happen to the proceeds of sale?

· Is it beneficial to move the house into joint names prior to the sale?

· How does this fit with other financial issues such as maturing investments, pensions, etc.

These are probably areas in which it’s not good to dabble! When you buy an investment property, you talk to ‘experts’ regarding what is or isn’t worth considering. When you sell a property it should be no different - If you exit the market in a planned manner, you’re likely to be far more successful than if you exit quickly because ‘something has come up and I need the cash’! Belvoir works with Franklyn Financial Management, a partner of St James Place Wealth Management, in these areas if you don’t know people yourself. It’s another area that will separate the professional landlord from the novice.

Should I invest in a house or an apartment in Westgate-on-Sea?

I was having a chat with a Landlord the other day who has several properties across the Isle of Thanet and is currently looking at expanding his portfolio. It was clear that he was a bit stuck with what to buy and where to buy it. He had been keen on an apartment in Westgate but he lost out to another buyer as he wasn’t quick enough in deciding if it was going to be the best investment for him. The delay was caused by his opinion that there’s too much of a saturation of apartments in the Westgate area and therefore he should be investing in a house instead. After our brief discussion he left his conundrum with me for the evening in order to do some research and get back to him with the results. This is a brief look at what I found…

The current average rental price of a one bedroom apartment in Westgate is £487 pcm and the current average asking price is £95,538 giving an annual yield of around 6.1% - not bad! Now let’s look at the other option our Landlord’s contemplating. The current average rental price of a 2 bedroom house in Westgate is £686 pcm whilst the average asking price is £173,571, an annual yield of 4.7% - not quite as impressive. It is worth noting the capital growth too, as readers of previous articles will be aware! In Westgate, apartments on average increased in value by 9.6% in the last 12 months, whereas in comparison houses on average increased by 8% in the same timeframe.

Now if we were going on figures alone then the obvious choice of an annual return of 15.7% on an apartment opposed to the 12.7% on a house would be the clear winner. However, it’s not as easy as that and one must also consider a range of variables when it comes to being a buy to let investor, of which there are many and I’ll discuss these in greater detail another time, or if you simply can’t wait then pop in and see me!

Going back to the Landlord’s conundrum about apartment saturation in Westgate; if you gave me 20 apartments, I’d find you 20 tenants, maybe not in one day but certainly within the first month, provided they are priced sensibly so there’s no need to be concerned with voids.

As ever I can’t always fit in all the information I collate during my research so if you would like to know more or would like me to look into buy to let investments for you then please do come and see me. At Belvoir, we don’t sell property so our advice is always free and impartial, our office is on Northdown road in Cliftonville and I look forward to seeing you soon.

Data source - Net house prices - Rightmove HPI - Mouseprice - Zoopla

The London Ripple and its effect on the Thanet property market.

This week, due to all the hype surrounding the ‘London Ripple’, I thought I would look at how this is affecting us down here in Thanet.

The London property market has gone a bit mad recently to say the least (yes, even more than usual). I have been keeping my eye on this as my sister and her boyfriend are currently trying to get a mortgage to purchase in London. They are currently renting in Hackney and would, within reason and financial constraints, like to stay in the area. So I did some research for them and found that property in Hackney, in ONE year, has increased by over £100,000, around 17.5% annual increase!

This got me wondering to what degree this has affected us here in Thanet. So after doing some more research I found that in the month from March to April of this year, property has increased by nearly 3% on average in the Isle of Thanet. From April 2013 to April 2014 the average price has increased by just over 5% - not bad for those buy to let investors that are also getting average yields of 4.9% giving an annual return of around 10%! If anyone knows of a bank savings account that can offer this, let me know!

If you would like some more information about how the markets are changing due to the ‘London Ripple’ or would just like some advice on what areas and what properties make for a good investment then come and see us. Our office is in Northdown Road in Cliftonville. I look forward to seeing you. 

OR give me a ring on 07432 716 257

Ramsgate Property market - Good Yields?

Following last week's discussion about how property values (aka Capital growth) had gone up in Ramsgate, this week I want to discuss the other side of property investment, the yield.  If you recall, the yield is the yearly rent from a property reflected as a percentage of the value of the property.

So what sort of yields can be achieved in Ramsgate? Starting at the lower end of the market, Two Bedroom Apartments, depending on accommodation, have an average price of £145,539, whilst the average rent achieved is £616 per month, giving an average yield of 5.1%. Considering properties like this in Ramsgate have risen in value by around 2.2% this year, that's an overall return of 7.3% in the last 12 months.

A modern 3 bed town house can be bought for around £185,000 in Meridian Close and they achieve rents around £850 to £900 per month. This gives a yield of 5.5% - 5.85% and with property values increasing by nearly 2.2%, that gives us 7.7% - 8% return. Other factors must also be taken into account when buying a property to rent out. The more modern property will require less maintenance, and could sell quicker (because there will be a time when you do need to sell it) also the larger modern property will have slightly less void periods than a smaller property. Balancing capital growth and yield is vital, but they are not the only factors to consider when buying a property to invest in.

The reality is, buying a buy to let property, wherever it may be, is a vastly different affair to buying a property for yourself to live in. When you buy a home for yourself, you look for a property with the accommodation you need, in an area that you want to live in, within your budget. When buying a home, the only opinion that matters about its features, location or accommodation is your own. For a buy to let property, the equation is exactly the opposite. Buy to let investment is about finding a property in high demand and short supply that will go up in value substantially over time.

The only views that matter when assessing an investment property’s potential, features, location and accommodation are that of the market place, both now and in the future. It’s this balance of market opinion and underlying demand which ultimately determines its investment performance, both in terms of income and capital growth. I tell landlords never to allow their own personal likes and dislikes to cloud their rational investment judgement. Remember, rule No.1 of property investment. YOU aren't going to live there.

If you want to chat about property investment in the area, be it Ramsgate, Margate or anywhere in the Isle of Thanet, please pop in to my offices on Northdown Road in Cliftonville or give us a ring on 01843 293 293

Ramsgate property market - Good Capital Growth?

For those that read my last article, I promised that I would look at the Thanet property market and compare its Rental yield and capital growth for the buy to let investor. For those new to the buy to let investment game, the yield is the yearly rent from a property, reflected as a percentage of the value of the property (one might consider it in the same light as the interest rate from your savings account) whilst the 'Capital growth' is the amount the property goes up in value each year, reflected as a percentage of the value of the property. For today’s purpose I will concentrate on Ramsgate.

The average value of a property before the crash of 2007 in Ramsgate was around £285,000. The year after, in the 2008 slump, prices dropped to £250,000. Considering values today are around £270,000, if you bought in Ramsgate in 2008, values would have increased by 8%. When you consider values in Herne Bay since the 2008 slump are only 4.0% higher and in Deal are 6.0% higher, this is an excellent increase.

However, property investment cannot be judged over short time frames and most certainly not by averages. I often, when looking at a market for a landlord, like to take a longer look at the market, and consider 10 to 15 years a more suitable time frame for capital growth. After doing my research, a lovely characterful terrace house set over three floors along Boundary road, sold for £47,000 in January 1999. It sold again in November last year for £115,000. Now the average property value increase for Ramsgate and the immediate villages, in that time frame was 48.6% whilst this property along boundary road saw capital growth of nearer 60%. Put the same £47,000 in the stock market in 1999, and in 2013, it would have risen to £55,880, a not so impressive rise of only 2.3%.

That's not to say everything in Ramsgate turns to gold. There are good properties, which have dropped in value. A very pretty 4 bed detached house sold in 2006 for £295,000. It sold again last year and if it had followed the Ramsgate averages, it should have sold for nearer £320,000. However, some lucky person purchased it for £250,000.

As we don't sell property, I can always give my landlords and landlords who aren't with me but want a second opinion and even people who are thinking of becoming landlords, my unbiased opinion on what to buy and what not to buy. I pride myself on knowing the market intimately, so I can give some great advice and opinion. It might not be what you want to hear but, I can assure you, it is what you need to hear. If you buy right, you will build yourself some capital growth for the future. If you want to chat about property investment in the area, be it Ramsgate, Margate, Broadstairs or anywhere around Thanet and the surrounding villages. My office is 200 Northdown road in Cliftonville, Margate. I look forward to seeing you soon.

Is Thanet an ideal investment location?

I have recently been speaking with a number of landlords about the importance of a balanced portfolio, when buying and renting out property. The balance between buying properties that offer good monthly returns (high yields) but quite often offer poor capital growth (i.e. they don't increase in value that much over the years compared with the average) verses properties that do go up in value quicker but often offer a lower yield. Another consideration has to be the mix of town properties verses the villages.

Choosing the right village though is very important. Living in villages often has higher costs, especially transport and petrol costs. Some tenants don't buy because they can't afford the mortgage, so if you buy in the wrong village, you could limit yourself to the type of tenant who can afford those extra transport costs.

However, one town that has a high demand with tenants is Ramsgate. Particularly popular with people that commute to London, with a high speed rail link, easy access to the A2 matched to an active and varied social scene, Ramsgate is pulling in good quality tenants. 

Rental prices range at the lower end from around £450 per month for a small apartment to around £1100 for a large 4 bed detached house. For the mid £700's, a larger 3 bed semi can be rented. As an up and coming town with further improvements sited to the train links to London, properties are in high demand.

So, does that mean you should buy a property in Ramsgate as a buy to let investment? Before I can answer that, you must really consider the capital growth vs yield question. Some Thanet buy to let investors often make the mistake of chasing yield over capital growth. Some investors believe that by chasing high yielding properties, in say the poorer parts of Thanet, they will make a faster profit than waiting for capital growth. The problem with this is that to achieve high yield you usually have to compromise on capital growth.

Therefore it would seem the most logical solution is to find a high yielding property in a strong capital growth area but, these simply don't exist and in actual fact, most of the time, lower yielding properties have a better capital growth. This is because there is generally a contrary relationship between yield and capital growth so the higher the yield, the lower the capital growth and the higher the capital growth, the lower the yield. Property investment in Thanet is about balancing the two.

Not many landlords, especially those who use buy to let mortgages, can afford to service high levels of debt without a reasonable yield, which forces them to look at ways of making an investment affordable by finding the right balance between capital gain and yield.

Yield is critical to the survival of a buy to let investment but it’s not the key to building wealth. Don’t chase yield for yield’s sake, but rather chase capital growth with enough yield to make it serviceable because in the long term it is the capital growth, not the yield that will generate you the wealth and the financial independence you are seeking.

Next time, I will show that Thanet could just offer that right balance of yield and capital growth.