Why an investment property for your Uni kids might be the way to go!

So, I had a more unusual enquiry last week that I thought could relate to many Teddington residents and therefore worth sharing. A mum who lives in Hampton dropped me an email to ask for my advice on buying an investment property for her daughter who was about to start at Uni. We met for a coffee and discussed the details. Her daughter has just started at Bristol university this September and is currently, as most first year students do, living in Halls. Now, her plan is, instead of paying a landlord an astronomical rent for a tiny 3 bed house, packed with 4 students, where you want to wipe your feet before leaving(!), she wants to become that landlord and provide her daughter and her friends with a decent place to live for her last 2 years of Uni.

So, here’s what we did….we looked at an example property, analysed the figures and how it would work. We found a really nice, large 3 bed terrace a 10 minute walk from the Uni (just about do-able for students apparently)! It has 2 reception rooms which means you can convert one into a bedroom and the other becomes the house lounge with a separate kitchen. It’s on the market for £375k and, with 4 students living there, you would get an average of £400pcm from each, giving you a gross income of £1600pcm. That gives you a gross yield of 5.1%. Now don’t forget, you’re not getting the income from your own child’s rent but effectively you are, in real terms, seeing as you would otherwise be paying that to another landlord anyway.

Let’s look at the pros of you buying a property for your child at Uni…

• You are investing in property rather than giving dead money to another landlord

• You know your child is living in a nice, well looked after property complying with current regulations (fire safety etc.)

• Your property will more than likely increase in value during your child’s time at university

• You can either sell the property at the end of their Uni course or continue renting to a new set of students.

• You can pass the property on to your child, potentially saving on tax, to get them started on the property ladder

If this is something you’ve maybe been thinking about for a while and appeals to your circumstances then please do drop me an email or give me a call and we can chat about how it can work for you. As part of my business, I can find you a suitable property in any UK University town, make sure you are compliant with all regulations, provide all relevant tenancy agreements and even fully manage the property for you. Effectively a one-stop shop where you can be involved as little or as much as you like.

Rebecca Smith

http://www.rebeccasmithpropertyservices.co.uk/

Buy to let deal of the day - Feltham 5.2% yield AND added value

I know a lot of you only like the TW11 postcode but you should consider TW13 - Feltham. Its so close to Hampton that it could be the next up and coming area and give good capital appreciation next year.

I found this 2 bed house which needs full refurbishment, perfect for immediately adding value should you wish to refinance and get some equity out to buy another property - if that floats your boat!

    

Its on at £275k so, say you get it for £270 and spend £30k on it, your total investment, minus fees, is £300k. You would get £1300pcm rent for this giving you a gross yield of 5.2% on a property now worth in the region of £320k. Pretty decent in my book.

http://www.zoopla.co.uk/for-sale/details/35269484

Rebecca Smith

http://www.rebeccasmithpropertyservices.co.uk/

Where is the Teddington property market going in the next 10 years?

Following my article a couple of months ago on property values up to July, I am pleased to say that Teddington house prices edged up by a further 1.8% in the last 3 months. As a result, the annual pace of house price growth in Teddington is up to 12.7% from 10.9% in July. We need to go back to March 2010 to see such a high growth, as house price growth continues to outpace earnings by a wide margin, with average wage growth running at less than 1% in recent months.

I am not an estate agent, but know most of the estate agents in town pretty well and they say new buyer enquiries have moderated somewhat in recent months. Coupled with the prospect of interest rate increases together with subdued wage growth may temper demand in the year to come. The demand should be there as the brightening economic outlook and consumer sentiment remains buoyant thanks to declining inflation and sustained decreases in unemployment down in Teddington to one of its lowest rates of 1.5%

Nevertheless, Teddington housing affordability does not appear stretched by historic standards, in part, due to the low level of mortgage rates. However, a decent two bed flat can be yours in Teddington for £350,000, meaning if you could save the £52,500 deposit (85% LTV), it would be cheaper to rent than buy. So why are first time buyers buying their first house instead of renting?

It comes down to choice and lifestyle of the tenants. In many cases renting provides the flexibility some people, especially young people, want and need. For others, home ownership is top priority but when there is no social pressure to buy and you can ring the landlord and sort out any issue, why would someone want to buy? Youngsters find it hard to save for the deposit when Apple launch their latest iPhone every six months or the next 50 inch LCD TV needs buying. Renting is a choice and we are developing a more European mind-set it would seem.

  

Therefore, my message to Teddington landlords is renting is here to stay for the medium to long term, whilst the outlook in the short term for the Teddington and Richmond Borough housing market remains uncertain. The number of mortgage approvals fell by almost 20% between January and August, suggesting that activity was cooling. However, there was a modest rebound in September and it is unclear how much of the slowdown was due to the introduction of Mortgage Market Review rather than an underlying loss of momentum.

It’s all about buying a property that will attract the right sort of tenants, a good balance of yield and capital growth and when you do come to sell it in ten or twenty years, it will sell at whatever the market is doing at the time. I can give you my honest opinion on any property. Many landlords send me Rightmove links to property, asking my advice. You can too if you want... It’s no trouble at all, but I will warn you, I will always tell you what you need to hear, not want you want to hear! Email me on rebecca@rebeccasmithpropertyservices.co.uk   

Rebecca Smith

http://www.rebeccasmithpropertyservices.co.uk/

Buy to let deal of the day - Twickenham 5.9% yield

Teddington is getting harder and harder to find a good deal. The demand is not even close to waning which is keeping property prices high. Good if you already own a property here but not so good if you're looking to buy an investment property here to supplement your income.

So, until the next bargain pops up we have to look elsewhere - and not too far fortunately! I saw this one online which ticks all the boxes for rentals. Central location - tick. Close to transport links, particularly the fast train into Waterloo - tick. Big with 2 double bedrooms - tick. Looking a bit tired so opportunity to add value - tick! 

    
(Can't believe they didn't even put the toilet seat down to take the marketing pictures - unbelievable)!!

It's on at £285k so, say you shave a bit off and get it for £280k, you should get around £1400pcm for it which would be a gross yield of 5.9%. 

You can always do some work to it at a later date to add the value...

http://www.zoopla.co.uk/for-sale/details/31471011#FcBmV3bz6dHl3rfA.97

Rebecca Smith
http://www.rebeccasmithpropertyservices.co.uk/

Strawberry Hill or St Margarets? It's all about the yield.

A landlord dropped me an email, just last week, asking whether he should buy a two bedroomed flat in the Strawberry Hill or St Margarets area. He likes and knows both and so would be comfortable investing in either. I hear this a lot, and whilst it probably won’t produce the greatest return, if you are much happier investing in your own area then do it. Life’s too short to be worrying about a property 100 miles away that, whilst it may get you an extra 2% yield, may also give you 100% more stress!!

We did some research and found that a nice two-bedroomed leasehold flat in a very attractive block called Stangate Mansions off Tower Road in St Margarets, was on the market for £419,950. We worked out the possible rent for this as £1450 per month, which could achieve an annual gross yield of 4.1%. The properties in this area are quite popular with professional couples and tend to have a great demand with investors and tenants alike, making it a relatively good investment.

A similar two bedroomed leasehold flat on Popes Grove, just around the corner from the station in Strawberry Hill, approximately two miles away, has a value of £599,950. The possible rent for this property is slightly higher, at £1800 per month, as it is slightly larger and a higher spec than the one on Tower Road. We found that although the rent can be higher, the annual gross yield was actually less at 3.6%.

This shows that, whilst a property can achieve a higher rent, it does not necessarily mean higher returns!
                      


If you would like any advice when choosing properties, please do get in touch as I’d be happy to help. There’s the right property out there for everyone if you’re ready to invest!

Rebecca Smith

http://www.rebeccasmithpropertyservices.co.uk/

Buy to let deal of the day - Teddington conversion?!

Lets be a bit brave today! It's a Monday after all and, as Christmas songs have now been playing on the radio for around 3 weeks, it must be that time of year!

If you follow my blog and newsletter on a regular basis then you'll know Stanley Road; the cheaper (if such a thing exists) end of Teddington where a lot of the houses have been split into flats. So, why not do the splitting yourself and be the one to reap the benefits rather than someone else?!

Here's a 2 bed house that's actually been done to a lovely standard. If you've got the cash you could split it into a 2 bed split-level flat on the top floor going into the loft and keep a 1 bed garden flat on the ground floor. 

  


http://www.rightmove.co.uk/property-for-sale/property-32698191.html

So, very basic estimates are that you could do the work for £100k which, added to the purchase price of £500k, makes a total (not including fees) investment of £600k. Done to a top spec, the 2 bed top floor flat will rent for £1500pcm and the one bed ground floor for £1300pcm. That's an income of £2,800 which is a gross yield of 5.6%. Pretty good for Teddington - IF you have the funds and mindset for the work!

Don't forget you could also flip the flats for a tidy profit should you wish. A 2 bed flat on Stanley road sells for around £400k and a 1 bed garden flat for £300k. That's £100k gross profit. Even if you don't sell it, you've instantly got that added value sat there either for your nest egg or, as equity you can release to re-invest into more property! I know what I'd do with it! :o)

If you're thinking of getting into buy to let but have no idea where to start then I can help you. Just drop me an email or give me a call and I'd love to have a chat. 
rebecca@rebeccasmithpropertyservices.co.uk
020 8398 9333

Rebecca Smith
http://www.rebeccasmithpropertyservices.co.uk/