Properties in the Pear Tree area outperform Littleover

Following a discussion with one of my landlords who lives in Littleover and has property to let in the Pear Tree and  Littleover areas and was thinking of purchasing another buy to let to add to his portfolio.

I did a comparison between the two and was surprised to find that the annual yield/return in the Pear Tree area is twice as much as the Littleover area . The average price of a property in the Pear Tree area is £74,500, whilst in Littleover it is £214,400. The last few months have seen the average rent in the Pear Tree area to be around £455 per month and around £617 per month in Littleover.

This means the annual yield/return would be 7.3% if you were to buy a property in the Pear Tree , but only 3.4% in Littleover…

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 long it takes to find a tenant. The average time in the Pear Tree can be up to five weeks, whereas in Littleover a tenant is usually found in two weeks. If you take into account the extra three weeks of void period for your property every year, you are losing rent and therefore annual overall return from the property. Also, property values over the last 10+ years have also increased at a much higher rate in Littleover than the Pear tree area. This is something we will look at in the coming weeks.

We can help you to find the best investment property with our specialist lettings advice. It is in our interest that you buy a property which will rent well, and for long periods of time. If you would like any advice on choosing properties, come and see us at our office on St James Street or call 01332 366171 or visit our web site at www.pplets.co.uk

Look out for our Investment Property Sales coming soon!

INVESTMENT DEAL OF THE DAY

3 bedroom terrace 

£109,500

King Alfred Street, Derby

Summary
Well positioned close to Derby City Centre, this large, three bedroom, mid terrace property is situated in a great location for the rental market.

Description
Hallway to the front leading into a spacious lounge with feature fire place. Separate dining room with understair storage. Kitchen with oven, hob and fridge freezer. Master bedroom with office off. Second bedroom plus spacious attic room. Bathroom with corner bath. Gas centrally heated and double glazed.

Simon says....
As stated, this is a well positioned property in a popular area. This property would be ideally suited to both the private rental market and for student accommodation. I would expect to achieve a calendar monthly rental of between £500 and £525. If let to students, a weekly rent of £60 - £65 per person could be achievable resulting in a potential return of over 9% based on the asking price.

This property is not currently on Rightmove or Zoopla so get in quickly!

Do semi-detached properties in Hilton make good Buy-to-Let Investments?

At the Graham Penny Auction last Friday I got talking to someone who lives in a detached house in Hilton. He wanted to purchase his first buy to let property and had noticed our local presence and previous articles, so was interested in getting to know the industry a little better.

As he has lived in Hilton for over 8 years and he felt comfortable investing there as he knew it well, we started to discuss the property market in the area. Firstly, we found that 87 semi–detached properties had sold in the area since 2005.

Property values in the area have risen, on average, around 84% over the last 10 years, however, most semi’s have beaten that rise. For example, a two bedroom semi--detached property on Foss Road rose by 122%, from £43,000 in 2002 to £95,500 in 2012.

When we looked back to 1999, a three bedroomed semi-detached in Hilton was bought for £33,500 and sold in 2008 for an impressive £137,000. With good capital growth you would expect yields to be comparatively lower, but most two bedroomed properties in the area can be picked up from £100,000 to £110,000 and could have achievable rents of £500 to £525 per calendar month. This is an attractive 6% return!

If you would like to talk to us about your potential investment, please come into our office on the High Street.

DERBY PROPERTY PRICES INCREASE BY £93.26 PER WEEK

Whilst at the Graham Penny Auction last Friday I got chatting to a landlord about the rising property values in Derby.

He owns a varied portfolio of rental properties, primarily in Derby with a couple in Swadlincote and Ilkeston, so it is interesting to compare the increase in property values around the area.

Over the last 12 months the average property value in Derby has risen by nearly £4,750, from £159,800 to £164,650. This is a very reasonable 3% increase, which if you look at it on a weekly basis, average property values in Derby, throughout 2013, have increased by an impressive £93.26 per week. When we looked at the values for detached houses in Derby, this average increase is even greater at £7,100, a rise of £136.53 per week.

When I looked at some of the surrounding towns, Ilkeston has had a lower average increase in property values, at around £86.88 per week, whilst Swadlincote has an even more modest average increase of around £64.75 per week. It is, nonetheless, a rise in average property values to suggest the market is recovering steadily in our area – good news for home owners and landlords alike.
When considering this landlord’s buy to let portfolio, the rental values have remained fairly stable during the 12 months. They are slowly recovering to the average of around 5 years ago, therefore it could be a good time to invest in the property market in Derby.

If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in rental market, please come and see me at our office on St James Street.

To visit our website - click HERE

PROPERTY AUCTIONS... TO BUY OR NOT TO BUY...?

Yesterday was the first Derby Graham Penny Auction in 2014.
As usual the Professional Properties team were in attendance to what was one of the busiest yet.

We gave advice to a lot of potential buyers and picked up 5 pieces of new business so it was an excellent day!

Is buying at auction a good way of acquiring property.....?

The Fors...

Potential Bargins - The obvious benefit of buying at auction is the appealing thought of finding your perfect home at a price that is considerably less than market value - or indeed - a fantastic investment opportunity offering a healthy return! Of course, it does depend on how many other bidders are also in the room looking for the same bargin -  the popular lots can attract a significant number of bidders.

No Gazumping Allowed - Bidding is open and fair and the highest bid wins!  It really is that simple. Once the auctioneer's gavel falls, the sale is complete and binding. Exchange of contracts takes place there and then with, usually, a 10% deposit payable instantly.

It is Quick - The timescales involved is remarkably quick. Once exchanged, the property, in most cases, will be set for completion after 21 days.

Something Different - As I've already said, prices are usually extremely competitive and often cheaper than in the estate agents window. There is also a wider choice of property, including repossessed homes needing a quick sale and unusual properties that might otherwise prove to be difficult to sell through normal channels. This is particularly beneficial to investors who may not necessarily need to buy in the area in which they live.

The Againsts...

It's easy to get carried away! - It is so easy to get lost in the excitement! Set your maximum price and stick to it. There will be the usual property related costs; solicitors' and surveyors' fees, the auctioneer's fee and, dependant upon sale price, stamp duty. Properties can sometimes sell prior to auction. Check with the auctioneer to confirm that your property is still being offered.

Sort your Finances - The quick process of an auction purchase means that you will have to organise things that would normally take a while if buying traditionally. You need to have searches and legals completed before bidding. You will also need to have the remaining 90% completion monies available as 21 days is not long enough to get this organised!

You can't change your mind! - Once the gavel falls and you hear "SOLD", if you are the winning bidder then it's yours. You should be well prepared in advance. Scour the property details in the auction catalogue and visit the property. If renovation works are necessary, prepare a schedule of costs to ensure the deal stacks up. If you buy it and find out it backs onto a power station, there's no going back!

Lose Your Deposit - If you back out after exchange of contracts, you will lose your deposit.

It can be scary and, believe me, your heart will be racing if you are bidding. It is the most exciting way to purchase property, however, remember the golden rule...

BE PREPARED!