22 May 2015

Further clarification on smoke and carbon monoxide alarms

Following on from our recent article there has now been a further update concerning alarms in properties.  This has been necessary as, unfortunately, this whole thing has been dealt with pretty badly so clarification was needed.

Basically the Landlord will have an obligation to fit an alarm on each storey of a rental property and a carbon monoxide alarm in any room which contains a solid fuel appliance. However, there has been no definition of what constitutes an alarm in terms of minimum requirements under British Standards so it seems any old thing will do.

Where a local authority believes a Landlord is not compliant then it is obliged to serve a remedial notice on him within 21 days.  The Landlord then has 28 days to make representation to the Local Authority as well as remedy the situation. If the Local Authority believes that the Landlord has not remedied the situation then they are obliged to do so within 28 days.  Perversely the Local Authority has no power to recover the costs of this work

If this regulation changes again we will of course let you know.

19 May 2015

Monopoly- The Andover Edition! How will you play?

A couple of local landlords and I had a discussion about the property market in Andover, 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 higher returns, with a greater risk with regards to the quality of the 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 Andover which are perceived as being more desirable, such as Burghclere Down and Saxon Fields (click here to read about some great bargains on Burghclere Down), where you may be able to achieve an annual yield of around 5-6%. Following my article afew weeks ago, if you don’t mind a slightly higher risk of void periods or a more varied quality of tenant, you are likely to be rewarded with a higher annual yield of 6.5-7%. This level of risk can be typically taken with ex local authority 3 bed houses around Andover such as King Arthurs Way. If you are after annual yields of 8% and over, you could take more of a risk with houses of multiple occupancy but beware of this strategy as there are rules and regulations to be followed with those and inevitably they attract more maintenance costs.

If you would like any advice on choosing properties, come and see us at our office or email us.

12 May 2015

Should I consider a two bedroom flat as an investment?

I was talking to one of my landlords recently when the subject of flats came up and whether they would make a good investment. Flats are not always the first choice for investors but they rent very well and generally offer good yields. There is a strong argument that buying a flat these days is not an issue as they are sensibly priced, the error people made in the past was buying them at the start of this century for more than the price of a house.
If you are a landlord with a limited budget, you can still find a decent property to let in Andover. Typically, a two bedroomed modern apartment can be bought for around £130,000 in the town centre of Andover in areas such as Heather Drive or Forge Field – the average rent for a property here is likely to be around £650 per month.
Always remember though, when buying a 2 bedroom flat, try to get two double bedrooms as this will inevitably make the property more popular and opens the market to sharers which is becoming a larger part of the rental market in this area.

Also remember with flats to factor into your figures management fees, ground rent etc.  These will usually be lower on ex local authority flats but they do not hold much of a sinking fund so you may have to stump up further funds as required for major works.
So, should you consider a two bedroom flat as a good investment? Yes. Yes you should.