29 October 2014

The importance of thorough referencing

We cannot stress enough the importance of through referencing. A tenant in St Just, Cornwall has recently been jailed for 2 years for fraud as, on 3 separate occasions, she took up tenancies having supplied false references and payslips.  Once moved in, she failed to pay the rent and then refused to leave.

This highlights the importance of thorough referencing.  A good reference includes a credit type check and an employment reference direct with the employer checking that the contract is for longer than the initial tenancy and that the salary paid is as reported.  The final element is the landlord reference, which again must come direct from the current landlord or agent if the property is fully managed.

If you need any advice regarding referencing, please feel free to pop into our office for a chat.

24 October 2014

Bargains on Burghclere Down

A landlord became ever more curious about the Burghclere Down Buy to Let market after reading our newsletters about various areas of Andover, so decided to pop in and ask our advice.
I found that a fairly typical four bedroom semi-detached townhouse with a garage on Hibiscus Crescent was bought for £187,000 in 2012. The same property sold for £225,000 in June this year, which is a rise of 20%. Prices in the town during this same time period rose by an average of 10.8%, so it should have sold for £207,200 if it had followed the towns average house price trend.
A three bedroom detached house again on Hibiscus Crescent sold for £226,950 in the summer of 2006, and was sold this summer for £249.950. This is again a decent rise of 10%, but average prices in this time have risen by a much more remarkable 26% in the area.
With rents for detached houses on the estate could achieve between £900 and 1100 per month, yields are around 5%. I think in terms of a rental investment, there are better properties, such as smaller two or three bedroom semis, or even ex local authority properties, but for owner occupation there are some bargains.

Our passion lies firmly within the residential property market, so please feel free to talk to us at any point about our diverse area.

22 October 2014

House of multiple occupation: Good money - if you do it right....

Owning and letting an HMO (House of multiple occupation) can lead to good yields on an investment for a Landlord.  However, if you get it wrong the fines can by huge.
Two Landlords (not in the Andover area) were recently both fined £30,000 for breaches of the rules covering HMO’s in their area.  In one instant a Landlord was found guilty of 46 offences relating to 4 different properties by the Magistrates Court in Cambridge for allowing tenants to live in dangerous conditions, namely fire safety issues, dangerous electrics and poor security.  He was also charged £1250 in costs.
In a separate case another Landlord was again fined £30,000 for leaving a property with 5 tenants in it with no heating or hot water for 4 weeks during the winter, as well as a leaking toilet.  The fine was high as he was charged £15,000 for failing to licence the house as an HMO, £5,000 for failing to fix the boiler, £5,000 for failing to fix a soil pipe and a further £3,000 for failing to respond to an investigator.  On top of this he was also charged £2,160 in costs.

So the rewards for owning an HMO can be high but beware.  Always ensure you fully comply with the Management of Houses in Multiple Occupation (England) Regulations 2006 and talk to your local authority as there are regional variations to deal with as well.  If in doubt – ask your local authority or a good agent!

20 October 2014

Buy to Let opportunity with ready made tenant

This newly listed property is a great buy to let prospect as the current owners would like to rent it from the new owner if possible!

The price of this property is £164,950 and you could expect to achieve around £800pcm giving a yield of around 5.8%.  Add to this the added benefit that the new owner will collect rent from day one!

10 October 2014

Andover property market outperforms other towns in the area

A landlord with a small property portfolio came into our office on London Street last week. He lives in a village between Ludgershall and Andover, and has properties in both towns. He wanted to ask our opinion on where he should buy his next Buy to Let property.
Looking at Andover, the average property price can be an impressive £282,400 and the average rent is equally high at £1045 per month. In Ludgershall, an average property is £195,000 and the average rent is only £608 per month. The annual yield in Andover could be around 4.5% per year, compared to Ludgershall where he could achieve an annual yield of nearer 3.7%.
It made me consider two other towns close by, Whitchurch and Pewsey. In Whitchurch, I found property values are much higher than in Andover, with an average property price of £359,600. They have an average rent of £1372 per month, which could achieve a yield of 4.6%. The average price of a property in Pewsey is £361,150, with rents of around £815 per month. This could achieve a yield of 2.7% per year.
It goes to show our town of Andover can be a good area for an investment property as the purchase price can be reasonable, but it is a decision that shouldn't be taken lightly. These are only averages, so the yields for some small to medium sized properties in popular areas of Andover can achieve yields of 4.5% to 6.5% per year.

If you want to know our thoughts on property in Andover, pop into our office.

3 October 2014

Is Spanish Town Andover's sleeping giant?

A landlord recently missed his chance to buy a three bed semi-detached property on Madrid Road, near the shops and Corunna Main, as it sold in a matter of days. He asked me if there something special about the area, so I did a little research.
I have included Corunna Main, Colenzo Drive, Valencia Way and Seville Crescent in my findings for the Spanish Town area. Corunna Main is the main road going through the development with smaller roads coming off of it.  The development was built in the 1960’s, mainly to encourage workers to move to Andover as the government of the time were making a conscious effort to move businesses out of London to areas such as Andover. 
A number of three bedroom semi detached houses have sold for around £200,000 in the last two years. These properties tend to generally be offered in good order so will require minimum time and effort to get ready for letting and this could achieve rents of around £900 per month, which would provide a reasonable annual yield of around 5.4%.
Well presented three bedroom semi-detached properties in the Spanish Town area which were selling for a maximum of £190,000 two years ago, are now selling for £230,000 or even £240,000. The older houses offer the tenant and buyer larger rooms, which can be more appealing.
With achievable rents of between £875 and £900 per calendar month and, as the houses have seen great increases in value and are popular with buyers and tenants, this makes them very attractive to both home owners and investors. So, if you would like to talk to us about property in our area please feel free to email or come and see us in our office.