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)