Do all Falkirk properties make good buy to let investments?

Put simply, the answer is no!

Today’s Falkirk Property Blog is a wee bit different as it is focusing on a delightful property that will make somebody a lovely home but will not be a good buy to let investment.  This is with a view to highlighting some of the key things needed for a good buy to let investment.

The property is a 2 bedroom, lower villa in Gartcows Drive.  Gartcows Drive is a sought after residential area in Falkirk that is just behind the hospital.  The generously proportioned accommodation includes a lounge, a separate dining room, two double bedrooms and a bathroom with a shower over the bath.  There is gas central heating, double glazing, a driveway providing off street parking and a private garden.

The property is on the market with Clyde Properties for offers over £149,000.

With my ‘places I would like my getting older Mother to live in’ hat on I would take the house .... in fact I may even arrange a viewing for her .... but, for exactly the same reaons, with my ‘buy to let investors’ hat on, I would not touch this property with a barge pole. Some of the main reasons are:

1) It is a well delightful area of Falkirk and the price reflect this.

2) All the rooms are on one level which is attractive for wealthy older people looking to down size from a large property that is on more than one floor and the price reflects this.

3) It is a lower villa which may put off families who can get a whole house for less money.

4) It is not a ‘hip and happening’ part of Falkirk for young professionals which will reduce the number of people interested in the property.

5) It is an ‘established’ area of Falkirk meaning that the neighbours may be less tolerant of tenants particularly ones that are ‘not perfect’.

This all means that the price to buy is higher but the rent is not that great comparatively.  As I said, Clyde Properties are selling it for offers over £149,000 – given the area it is in, let’s say it goes for £160-165,000.  Rent levels for 2 bedroom properties in Falkirk range from £350-600 pcm so even assuming £600 pcm gets you to a yield of only around 4.5%.

This is a property that is best to be bought to live in than bought to rent out.  So, I would love my Mother to live in this property but I would not have it as a buy to let investment.

We hope you find our posts useful.  If you want some honest, straight forward, buy to let advice or anything else property related, come and see me in my office (6 Vicar Street, Falkirk), call us on 01324 649840 or email either of me (falkirk@thekeyplace.co.uk).

Why are less and less people moving house in Falkirk?

Years ago, it seemed that people moved all the time, friends of mine always seemed to be packing up and moving on to their next home. I actually read on the internet that the average UK person moves 8 times in their life or every 9 to 10 years. However, from research I have carried out it shows things have changed considerably in Falkirk in recent years, and interestingly, the trend is getting worse!

In the Falkirk area, there are 56,599 properties. However, after we remove the 12,716 council houses, the 2,577 housing association houses, the 4,124 privately rented houses and the 542 houses where the occupants live rent free, that leaves us with 36,640 owned properties, be that 100% outright, with a mortgage or shared ownership. This means 65% of the properties in the Falkirk area are occupied by the owner (the national average is interestingly 62%) but the number of people who have sold and moved house in Falkirk over the last 12 months has only been 3,256. This means that, on these figures, the homeowners of Falkirk are only moving on average every 17.4 years.

There are a couple of reasons for this. Firstly, the cost of moving house has risen dramatically over the last twenty years and, secondly, with many remortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability in a small minority of homeowners to finance a home sale/purchase, due to lack of equity. These are both factors leading to driving fewer moves by existing homeowners.

However, the big effect has been the change in house price inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to 7 years. Even in Greater London, with its stratospheric property price increases over the last few years, it has taken 14.5 years (August 2002 to be exact) for property values to double to today’s levels.

So what does this all mean for Falkirk buy to let landlords? Well, for the same reasons existing Falkirk homeowners aren’t moving, less ‘twenty something’s’ are buying their first home as well. Falkirk youngsters may aspire to own their own home, but without the social pressure from their peers and parents to buy their first property as soon people reach their early 20’s, the memory of the 2008 housing crisis and the belief the hard times either aren't over or the worst is yet to come, current and would-be homeowners are warming to the idea of renting. I also believe UK society has changed, with the youngster’s wanting prosperity and happiness; but wanting it all now... instantly... today... without the sacrifice, work and patience that these things take. 

As a society, we now expect things instantly, and if it doesn’t come easy, doesn’t come quick, some youngsters ask if it is really worth the effort to save for the deposit?  Why go without holidays, the newest iPhone, socialising four times a week and the fancy satellite package for a couple of years, to save for that 5% deposit. Why should they if there is no longer a social stigma in renting or pressure to buy as there was say a generation ago?

Where is my evidence for this?  Well it is the significant increase over time in the number of properties being rented – 7.3% of Falkirk properties are currently privately rented, double the level it was ten years ago.

As a result, the demand for rental properties continues to grow from tenants, meaning those wishing to invest in the buy to let market, over the long term, might be on to a good thing.

If you are planning on investing in the Falkirk property market, or just want to know more, things to consider for a successful buy to let investment please feel free to contact me on 01324 649840, email me on falkirk@thekeyplace.co.uk or pop in an see me at out office at 6 Vicar Street. 

Falkirk buy to let flat – it ain’t pretty but it is great value!

Today’s buy to let opportunity from The Falkirk Property Blog reinforced the old saying “Never judge a book by it’s cover”!  It ain’t pretty but the sums definitely add up on this one.

The property is a 2 bed flat in a block of flats at 197 Davids Loan, Bainsford.  The flat had a large lounge, a breakfasting kitchen, 2 double bedrooms and a bathroom with a bath over the shower.  There is double glazing but only (presumably electric) storage heating.  There are communal gardens around the property and there is on street parking.  The property is in good condition internally and looks ready to let out.

Double click here to get more details about this property

This property is on the market with McEwan Fraser Legal for offers around £45,000 so let’s say it goes for £45,000.  This property is likely to rent for between £425 and £450 pcm.  So that gets you to a yield of whopping yield of between 11.3% to 12%.

If you like the look of this one, get in touch for a chat (6 Vicar Street, Falkirk; 01324 469840; falkirk@thekeyplace.co.uk).  If you want to have a chat about another property you have seen, get in touch as well and I will give you my impartial advice about the property.

Falkirk Buy To let – Bedrooms?

Last week, a landlord from Falkirk emailed me to ask, after reading the Falkirk Property Blog, if he should extend his terraced house making an extra bedroom in the loft. He had a builder friend who owed him a favour, and he thought that a good way to make more money out of his property would be to get an ‘inexpensive’ extension.

Having more useable space is generally thought to be consistent with better quality accommodation and homeowners and tenants are prepared to pay for it. If you added a bedroom to a two bed terraced to make a three bed terraced, it will add around 10% to the value of the property. Turn a three bed terraced into a four bed terraced and about 9% will be added to the value. Looking at semi detached properties, and turn a two into a three bed and around 12% will be added to the value, whilst making a three bed semi into four bed will add about 9% in value.

However, before you rush off to the planning department there are some important considerations, whether you are a homeowner or landlord. What would be the cost of making that extra bedroom? The average value of a terraced house in Falkirk is currently £100,206 whilst the average value of a semi detached house is £135,346, meaning to make money the cost of the extension would need to be less than £9,516 on the terraced property and £14,211 on the semi detached house. Talking to a number of tradespeople in the Town, most are booking up to Summer. Also, no matter how good a friend he was, I know of no builders that would charge as little as that. Maybe the builder was just thinking of a bit of pointing work on the chimney!

Well, that got me thinking about how bedrooms affected rental prices and rent-ability as well. The average rent of a two bed property in Falkirk is £460pm, but a three bed is only £130pm more at £590 pcm, whilst the average four bed rent is £790 pcm.  Interestingly, you will see that whilst bedrooms do have an effect on the rent that can be achieved and the rent-ability of the property – the difference does not warrant the expense, hassle and trouble of extending.

No, if you want to increase the value of your property, be you a Falkirk landlord or homeowner, there are things that cost a lot less than building extra bedrooms. Spruce up the exterior, emulsion all the rooms, install fresh carpets and curtains. For homeowners, a matter of a few hundred pounds will add thousands whilst for landlords these things can add an extra 10% to the rent that you can achieve.

For more advice and opinion on the Falkirk Property Market, visit the Falkirk Property Blog at www.thefalkirkpropertyblog.co.uk.  If you would like to talk to us about your potential investment criteria, please pop into our office at 6 Vicar Street, Falkirk for a chat.

Get in quick for this 12% yield house in Falkirk

If you took my advice on Friday and spent the weekend mulling over the 4 bedroom terraced house in Torridon Avenue I wrote about on The Falkirk Property Blog, you may well have decided this sort of property is for you.  If so, read on as I have found another similar property which will be of interest to you.  However, if you are interested I would get in quick as this property will sell fast.

The property is another ex Council, 4 bedroom terraced house, this time in Avon Court in Hallglen.

This house is a large house.  It has a good sized lounge, a dining room, a fitted dining kitchen, four bedrooms, a bathroom with a bath and shower over it and a separate WC.  There is double glazing, gas central heating with a new boiler and on street parking.  There in an enclosed garden at the rear.  The property is in good condition internally although you may choose to neutralise the decor a bit.

Double click here to get more details about this property

This property is on the market with Homes for U at a fixed price of £81,000.  This property is likely to rent to housing benefit tenants and the housing benefit rate for a four bedroom house is £787.50 pcm. 

So that gets you to a yield of whopping yield of 11.7%.

As I mentioned about the Torridon Avenue property on Friday, the location is likely to mean that it will be rented to a housing benefit tenant.  The size means that the pool of people looking for a property of this type will be less – you need big family to need a four bedroom house.  This means that it is a higher risk property ..... but then again it has a whopping yield of 11.7% to compensate for this higher risk.

If you like the look of this one, get in touch for a chat (6 Vicar Street, Falkirk; 01324 469840; falkirk@thekeyplace.co.uk).  If you want to have a chat about another property you have seen, get in touch as well and I will give you my impartial advice about  the property.

11.1% yield on this specialist 4 bed house in Falkirk

As the week comes to an end, I thought that I would leave you with a high yielding but specialist property in Falkirk to ponder over the weekend.  The property is sound, the yield is very good and it needs a wee bit of work done to it but nothing major so all good there.  However, there is a but ...... let me explain.

The property is an ex Council, 4 bedroom terraced house in Torridon Aveniue in Falkirk.  Torridon Avenue is off Carron Road in Carron.

This house is a large house.  It has a good sized lounge, a fitted dining kitchen, four bedrooms and a bathroom with a bath and shower over it.  There is double glazing, gas central heating and on street parking.  There are gardens at the front and rear.  The property needs a wee bit of modernising – re-decorating, some new carpets and possible new doors to the kitchen units – but not a total re-furb.

Double click here to get more details about this property

The asking price for this property, which is on the market with Your Move, is offers over £73,000.  The property is recently on the market so let’s say it sells for £80,000.  I would reckon that the works required might cost £5,000 which gets you to a total spend of £85,000.  This property is likely to rent to housing benefit tenants and the housing benefit rate for a four bedroom house is £787.50 pcm. 

So that gets you to a yield of whopping yield of 11.1%.

Now for the ‘but’!  This is a specialist property given its location and size.  The location is likely to mean that it is likely to be rented to a housing benefit tenant.  The size means that the pool of people looking for a property of this type will be less – you need big family to need a four bedroom house.  This means that it is a higher risk property ..... but then again it has a whopping yield of 11.1% to compensate for this higher risk.

I will leave you to ponder this one over the weekend.

If you like the look of this one, get in touch for a chat (6 Vicar Street, Falkirk; 01324 469840; falkirk@thekeyplace.co.uk).  If you don't like the look of this one but have seen another property that you would like some advice on, get in touch for a chat as well.

Flats in Falkirk – worth a look at 7% yields with limited capital needed

I was talking to one of my landlords from Larbert the other week about the buy to let property market in Falkirk, when the subject of flats (properties not shoes – see picture!), and in particular whether they would make a good investment, came up.

He said that he was not keen on flats because he had heard people lose money on them in the past and, anyway, he wouldn’t want to climb stairs to a flat or suffer getting no peace in a flat as a result of noisy neighbours.  This is a reaction I have heard a few times so I thought that I would look into the buy to let flat market in Falkirk a bit further.

First of all, let’s take the personal stuff.  As with all buy to let investments, it’s about the returns you can make on the property rather than whether you would want to live in a property.  A flat wouldn’t be my first choice to live now but I was very happy living in flats when I was younger and, anyway, I am no longer renting. 

Secondly, let’s have a look at the financial stuff. 

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 Falkirk. Typically, a reasonably priced one bedroomed flat can be bought for around £61,000 in Falkirk – the average rent for this sort of property is likely to be around £350 per month so that’s a yield of around 7%.  A similar two bedroomed flat in Falkrik can be bought for around £84,000 and will also give you a yield of around 6.5% based on the average rent for these properties of around £450.  In either case, £61,000 to £84,000 is not that much for a buy to let property – assuming a 75% mortgage, that’s only £15,000 to £21,000 capital down to get a property.

We hope you find our posts useful.  If you want some advice on this property, another property you have in mind or anything else property related, come and see us in our office (6 Vicar Street, Falkirk), phone us (01324 469840) or email us (falkirk@thekeyplace.co.uk).

Sought after, quality stone built 1 bed flat in Penicuik

A few weeks ago on the Penicuik Property Blog we had a stone build flat that in Auchendinny .... today we have stone built flat in the heart of Penicuik which is also an uncommon occurrence in and around Peniciuik!

This property is a one bed, ground flat at 41 Cranston Street in Penicuik.  Cranston Street is off Wilson Street between the back of the post office and the Craigiebield Hotel.

The flat is in a stone build block.  The property has been well maintained and it has a lounge, a modern kitchen, a double bedroom and a wet room along with double gazing and gas central heating.  However, an older person has been living in the flat and you will need to neutralise some of the decor and the carpets. and it is in a ready to rent condition having been well maintained. 

Normally, I would comment negatively about there only being a shower – you will have heard me on this topic before, everybody wants a bath but nobody used a bath! – but in this case I am less fussed as this flat is not going to be a family home, rather it will attract young professionals or older people who are often less fussed by a bath.

Double click here to get more details on the property

This flat is on the market with Allan McDougall for offers around of £90,000 so let’s say you get it for £90,000.  Adding £4,000 on for decor and carpets gets you to a total spend of £94,000.  The right tenants should pay £525 for a flat like this so that’s a yield of 6.7% which is good for a stone built property in this part of town. 

We hope you find our posts useful.  If you want some buy to let advice on this property, another property you have in mind or anything else property related, come and see us in our office (6 Bank Street, Penicuik), call us (01968 674601) or email either of us (lettings@thekeyplace.co.uk).

Easy buy to let 3 bed in Falkirk

Welcome to a new week.  As I left the house early this morning, I felt that Spring has sprung – sun in the sky and frost on the ground.

Today’s buy to let opportunity from The Falkirk Property Blog falls into the ‘modern property, lower maintenance, lower returns’ category.

The property is a modern semi detached, 3 bedroom house at 4 Taylor Court in Falkirk.  Taylor Court is in the modern development between th Forth Valley College and the canal.

This house has a good sized lounge, a fully fitted dining kitchen with patio doors to the back garden, three ‘modern sized’ bedrooms, an en suite for the master bedroom and a bathroom with a bath and shower over it.  There is double glazing, gas central heating and driveway parking for multiple cars.  There is also a front garden.  The property is in lettable condition.

Double click here to get more details about this property

The asking price for this property, which is on the market with Russel and Aitken, is offers over £124,995.  The property has just come on the market so let’s say it sells for £135,000.  Based on our experience of renting this type of properties in this area, you should get a rent of £675 pcm on this property.

So that gets you to a yield of 6% which reflects the modern, low maintenance nature of the property.

If you don't like the look of this one, but have seen another property that you would like some advice on, ping it through on an e-mail to me at falkirk@thekeyplace.co.uk and we will happily give you my honest opinion on it's 'rentability'.

Which type of house should I buy in Falkirk?

Which type of house should I buy in Falkirk to rent out to tenants – a 2 bedroom one or a 3 bedroom one?  One of our landlords asked me that question this week. The first question I asked them was what were they looking for from the investment – capital growth in the property or a great yield?

Answering this question will help you figure out which properties you should buy... The average asking price of a 3 bed property in Falkirk is £113,100 today compared to £84,800 for a 2 bed one. 3 bed properties achieve an average rental price of £565 per month compared to £475 per month for two bedders.

That’s a yield of 6.0% for a 3 bed against 6.8% for the 2 bed. So surely, the 2 bed semi is the better bet? Well it does offer a better rate of return and the 2 bed is slightly easier to rent out (less void periods) but a 3 bed will be easier to sell in the future.

We hope you find our posts useful.  If you want some advice on this property, another property you have in mind or anything else property related, come and see me in my office (6 Vicar Street, Falkirk), call me (01324 489840) or email me (falkirk@thekeyplace.co.uk).