BUY2LET - 3 to choose from.

After a few weeks with little reward, we've spotted a couple of things that should interest serious purchasers. These seem to be the pick of what's around at the moment.

This is a 1 bed town centre apartment, advertised at £77k. Lets assume you can pick it up for a couple of thousand less, but that you may need to spend a couple of thousand tidying it up. It's THE MOST POPULAR RENTAL LOCATION in town (seriously) and £500PCM is a safe price. Yield of 7.7% doesn't hurt.

 This is a 1 bed HOUSE with garden in New Duston - nice upmarket area. It has offers of £76k on it, so will probably sell for a couple of thousand more. It needs a spend of £5000 to take it back to a tip top standard, and will rent for £475. A yield of 6.8% in one of the better areas of town.

SOLD

A 2 bed Victorian Terrace very near the station and seemingly in EXCELLENT ORDER - ready to tenant at £575PCM. On the market for £112k, let's assume you can pick it up for £110k - that's a yield of 6.2%.
Some people are adamant they want something that needs no work, and will let straight away - what are you waiting for?

SOLD

Can't sell it. Should you let it?

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 lettings 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 (like I did before I became a lettings agent myself!!!). Your rental property is one of the biggest financial commitments you’ll make in your life, and you want some assurance firstly it’s being properly looked after, and secondly that you have some redress if it isn’t. 

Richard.

Northampton : Buying an Oddity

In recent blogs, I’ve looked at what you can buy, at a general level, in the Northampton Housing market.  These have covered standard properties that will appear for purchase on a regular basis, and are easy to categorise. If you're the type that likes to research before you buy, reading these blogs will make it possible to generalise about 90% of the market. 

There are however other non-standard investments that pop up on an ad hoc basis. Weird though they are, they often make really good investments, and require a confident landlord to quickly 'take a punt'. In the last 12 months, we've seen the following; 

A 1 bed coach house on Grange Park. These are freehold and very few of them are actually built, so it's not like you can wait for one to come along. However one did, and a landlord picked it up for in the region of £95k, making it a good investment. It will bring in at least £495PCM - a 6.2% yield. This isn't earth shattering, but is about as good as you'll get in a premium postcode.

A weird town centre building cut into 2 flats, but not separated legally so could only be sold as 1 unit. A canny landlord picked this up for about £100k, and brings in about £1000PCM in rent for the 2 flats. He's getting a 12% yield, and owns the freehold. Whilst the building won't win any awards for architectural beauty, as a high yield, low risk investment this is about as good as I've seen since I started trading.

And finally, a caravan! Some of you may not be aware that Northampton is home to one of the largest caravan parks in the UK - Billing Aquadrome. It's actually quite upmarket and is almost a small town in itself - acting as a retirement village, holiday destination, and commuter estate all in one. Whilst there are various rules about tenure and tenancy, some of the fixed homes there (I'm not allowed to call them caravans) sell for over £100k. However the owner of this one paid about £20k, and gets around £350PCM in rent, which by my reckoning is in the region of a 20% yield. Argue with that!