Falkirk ‘eye candy’ property of the week!

This week’s ‘eye candy’ Falkirk property of the week is a 2 bed flat in the Towers Court development off Grahams Road .... so it is very central!

The property is a 2 bedroom flat in Towers Court.  Towers Court is a fairly modern development off Grahams Road so it is within walking distance of the town centre and the railway station, perfect for the commuting tenant.

This apartment has a good sized lounge, a fitted kitchen, two decent sized bedrooms and a bathroom with a bath and shower over it.  There is Upvc double glazing but only electric heating.  There is ample parking.   

The flat is in lettable condition .... hurrah!

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 £69,950 so let’s say you can get it for £75,000.

Based on our recent experience of renting this type of properties in this area, you should get a rent of £450 pcm on this property.

So that gets you to a yield of 7.2%.

We hope you find our posts useful.  If you would like some advice with your potential investment, please come and see us in our new offices at 6 Vicar Street, Falkirk for a chat, give us a call 01324 469840 or email us on falkirk@thekeyplace.co.uk. 

Falkirk landlords owe more than £358 million!

The Brits can’t stop talking about property. The hot topic of discussion at the posh dinner parties of Lionthorn, Majors Loan and Larbert movers and shakers is the subject of the Falkirk Property market, but in particular, buy to let. These people are buying up buy to let properties quicker than an ace Monopoly player ...... or so it would seem if you read the Sunday papers. So is the buy to let market a sure fire way to make money?  Is it something everyone should be jumping into? Is it a sure fire way to make money? Am I asking too many questions? The answer is Yes and No to all those questions!

Firstly, a landlord only has to flick through Rightmove or Zoopla, pick any property at random and agree a price. Then, find a modest deposit of 25% (often by remortgaging their own home) which for an average Falkirk terraced house, would mean finding £34,362 for the deposit (as the average Falkirk terraced house is currently worth £137,450) and borrow the rest with a low interest rate buy to let mortgage.  Finally, the landlord would rent out the property in a matter of hours for top dollar and live happily ever after, with the rent then covering the mortgage payments, with loads of money to spare and come retirement have a portfolio of property that would have quadrupled in value in fifteen years. Sounds wonderful – doesn’t it? Or does it?

Let us not forgot that the half of one per cent Bank of England base rate is artificially low. The international money markets can be fickle and if interest rates do rise quicker and higher than expected because of some unforeseen global economic situation, that monthly profit will soon turn into a loss as the mortgage will be more than the rent. Even though tenants are staying longer in their rental property, tenants still come and go and my guidance to landlords is they should allow for void periods, plus the maintenance costs of a rental property and of course, agents fees ...... all things that eat into that profit.

Interestingly, by my calculations Falkirk landlords owe in excess of £358 million in mortgages on buy to let properties.  An impressive amount when you consider Falkirk only has 0.31% of all the rental properties in the Country. It really does come down to a number of important factors going forward to ensure you are water tight for the future. A lot of my existing landlords are fixing their mortgage rates. One told me that HSBC are currently offering a 5 year fixed BTL remortgage rate at 3.39% for 5 years (based on a 75% loan). I don’t give financial advice, so you must speak with a qualified mortgage advisor...... but that sounds very fair!

However, one thing I do know is that buy to let is a long term investment, it’s a ten, fifteen, twenty year plan and property prices will go down as well as up. You wouldn’t dream of investing in the stock market without advice, so why invest in the Falkirk Property Market without advice? We give bespoke detailed advice to our landlords to enable them to spot trends in the Falkirk Property Market before others, enabling them to buy better properties at better prices. For example, did you know that flats are selling for around 1.96% lower than 12 months ago in Falkirk yet semis are selling for 1.39% more (with every other type in between). This means we can advise on which properties will go up in value better (or lose less if property prices drop), we can also advise which have lower voids and which properties have higher maintenance issues. 

Information on the local property market and ability to process it is the strongest asset we can give you. As Lois Horowitz, the famous author says, “Not having the information you need when you need it leaves you wanting. Not knowing where to look for that information leaves you powerless. In a society where information is king, none of us can afford that”. One place to find information on the Falkirk Property Market is the Falkirk Property Blog, where you will find many articles just like this. www.thefalkirkpropertyblog.com.

Get in quick for this cracking Falkirk buy to let opportunity for the disciplined investor!

Speed and discipline, that’s what you need for this Falkirk buy to let property.

The property is a first floor, 2 bed flat in a fairly modern block in Middlemass Court which is off Graham’s Road.  It will sell quickly so if you are interested then get in quick.

Double click here to get more details about this property

Firstly, the good points.  The property is on the market with Allan & Harris and it is priced to sell at offers over £40,000.  The property will rent easily and you could expect to get £450 per month in rent.

Now onto the not so good points. 

The property looks like a re-possession.  The photos have been cleverly taken to avoid showing the tell tale signs of a re-possession (eg tape over the toilet) but the property is being advertised as being ‘old as seen’ so it is fairly clear that it is a re-possession.  Now I am not against re-possessions in principle, and have bought some myself, but there carry greater risk as you have virtually no comeback on the seller so if you are buying a re-possession make sure you do enough diligence and take the requisite legal advice.

The property needs work to it.  This looks like mainly decorating and flooring but there are no photos of the bathroom so worth checking this out in particular. 

However, the biggest issue is the combination of a property that is priced to sell with ‘complications’ eg re-possession, needing works done to it.  The good price will attract lots of interest which is likely to include inexperienced buyers who may not correctly price in the risks/costs of these complications and therefore may offer silly money for the property.  This is why you need to be disciplined, otherwise may get ‘deal fever’ and over pay for what should be a good deal on paper.

As an illustration, if I was buying this property, I would base my price on getting a 10% yield which would take account of the re-possession risk (although I would do more diligence than normal on the property as well) and a conservative estimate of rent of £425.  This would get me to a total price of £51,000 off which I would take the re-furb costs of say £5,000 leaving £46,000.  In this example, this is the maximum price I would offer and if this is a lower price I may offer got me the flat then all well and good but if it didn’t then there are plenty more fish in the sea!

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.

Could your Falkirk property save you from pension oblivion?

If you were born in the late 1960’s or early 1970’s and you haven’t started to think about it yet, retirement is closer than you think. In fact the number of years you have left to work is less than the number of years you have worked. The basic state pension is worth a maximum of £155.60 a week for a single person in 2016/17 (or £8,091 a year) and £237.55 a week for a couple (£12,353 a year).

As a household, could you live on just over £12k a year?

However, could the property you are living in save you from poverty when you reach retirement? You see, a regular income is vital in retirement, and the bricks and mortar you own in Falkirk could provide a way for you to finance life when you retire.

If you are in your 30’s, instead of saddling yourself with bigger and bigger mortgages, going from your first time buyer flat, to a terraced, to the semi and then the large detached house, you could instead keep your terraced or small semi, turning it into buy a buy to let property, let the rent pay the mortgage and then rely on capital growth to provide you with a lump sum when you sell the property and retire.  One of the biggest plus points of buy to let is what is known as leverage. Let me explain ... say you have a deposit of 25% and the value of the property rises by 3% a year, your gains in fact multiply to 12%.  However, if property prices drop, 'leverage' can be catastrophic, as losses will also be multiplied. Property values have dropped a number of times in the last 50 years, but they always seem to bounce back ... property must be seen as a long term investment.

Let me explain how leverage could work for you. If you had bought a Falkirk house in Spring of 1983 for £25,000, using a 75% mortgage and 25% deposit, (meaning your deposit would be £7,500). Today, that Falkirk property would have risen in value to £120,375, a rise of 481.5%. However, when you look at the growth on just your deposit, the rise is even better ... instead of 481.5%, we see a rise of 1,926% (remembering that the mortgage would have been paid off).

However, buy to let is not all about capital growth and in retirement, income is more important than capital growth, as rent is the key to a steady income.

So surely the best strategy is to buy those Falkirk properties with the high rents (when compared to the value of the property). These are called high yield properties in the buy to let world because the monthly return is so much greater. So surely they are the best in Falkirk? Possibly, but the properties that offer these higher yields (over 7% to 10%) tend to be in “not so nice areas” of Falkirk, historically they haven’t offered such good capital growth when compared to the town average, and have a higher tendency for void periods (ie when there is no tenant in the property paying you rent) and such properties tend to attract tenants that have a greater propensity to be high maintenance.

Therefore, if a high maintenance rental portfolio wasn’t for you, another strategy could be buy a property with relatively smaller rental returns of 5% to 7% per year (ie lower yields), but in a more up market area. Properties such as these tend to suffer from less void periods and they historically have had better long term capital growth when compared to the town average.

Every landlord is different and every property is different. All I suggest to you is do your homework. I am always happy to give advice and would be more than happy to talk to you so, if it would help, call me on 01324 469840 or visit our office at 6 Vicar Street, Falkirk, FK1 5JJ for further details.

Don't forget to visit www.thefalkirkpropertyblog.co.uk to view back dated articles and deals from the Falkirk Property Blog. 

High yielding 3 bed flat in Falkirk .... 11.5% high yielding!

Today’s buy to let opportunity from The Falkirk Property Blog is a high return property but, as you will have heard me say before, with higher return comes higher risk so go into this one with your eyes open.

The property is a top floor 3 bedroom flat in Haugh Gardens.  Haugh Gardens is a cul de sac off Haugh Street which is of Carron Road. The flats is in a 1950’s block and it is an ex Council property.

This apartment has a good sized lounge, an almost fitted kitchen with a balcony off it, three decent sized bedrooms and a bathroom with a bath and shower over it.  There is double glazing, gas central heating and off street parking.  The flat needs a wee bit of TLC – let’s say this will cost you £3,000.

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 £49,950.  It has been on the market since October 2014 so let’s say it sells for £52,000 which, once you add in the £3,000 TLC spend, gets you to a total spend of £55,000.  Based on our experience of renting this type of properties in this area, you should get a rent of £525 pcm on this property.

So that gets you to a yield of 11.5%.

If you would like to explore how we can help you with your property investments, or should you require any advice about investing in the Falkirk property market, wish to enquire about our Investment Analysis Reports, Property Sourcing, Residential Lettings or Property Management services, please do not hesitate to pop in an see us in our new office at 6 Vicar Street, Falkirk or contact us by phone on 01324 469840 or by email at falkirk@thekeyplace.co.uk.

The Falkirk Property Blog’s Basic Guide on Buy to Let in Falkirk

Being active in the Falkirk property market really does help when it comes to choosing the right property to invest in as you have the opportunity to see which properties in what areas are in high demand, which bring in the biggest yields and which properties give the largest capital gains.  It allows you to understand the market and know what landlords and tenants are looking for. 

All this helps when I have first time investors looking to purchase their first buy-to-let like Gregor who popped into the office a few weeks ago after reading my previous articles. We chat about the basics on choosing an investment property in Falkirk.

Size is not always the main consideration, quality and location are more important. Investing in new-build flats, old houses or ex local authority properties all have merit in different ways, it depends on your investment objectives, timeframes and budget. Before investing there are numerous things you need to research including – but not limited to – cash amounts, mortgages and rates, fixed costs (such as service charges in flats), potential repairs and improvements, furnishings, gross and net yields, plus likely returns on capital employed. 

Houses seem to be more popular than flats in Falkirk, larger bedrooms are better than singles, good nearby transport links are also useful and double-glazing and gas central heating are becoming a requirement for most tenants. Location of the property is also vitally important – the main drivers are access to transport links, good shops and restaurants and in the case of growing families, good schools.

The condition of property should also be considered. Tenants want dry, structurally sound properties in good condition (cracked fittings, marked walls, damaged appliances, grubby kitchens and bathrooms are all a turn off). Think carefully about the size and layout of the accommodation too. Most tenants will dislike small living spaces, odd shaped rooms and bathrooms without natural light. And remember, tenants have a strong sense of rental values so the days of landlords setting the rent to cover their mortgage are gone and they must therefore buy wisely.

A Buy to Let property should look good from the outside (kerb appeal). If the inside is immaculate but the outside isn’t, you will struggle to get people through the door. Ideally the property should have gas central heating, double glazing and a shower as well as a bath.

Think about the age of the property. The younger the property, the less maintenance you will have. If you purchase an older property it is likely you will have to rewire the property, therefore I would strongly suggest that Buy to Let landlords have the gas and electric checks done on the property before Exchange of Contracts. If problems are found the cost of rectifying the issues could potentially come off the agreed sale price.

Two and three beds are the most popular (with two beds usually giving a better return on an investment), but it is essential that you understand the Buy to Let market and complete all your homework before purchase. I would urge all Buy to Ley landlords to carry out a cost analysis before committing and have sufficient funds set aside for potential void periods and major repairs (a new boiler could cost around £1,000, if you cannot afford to replace it then don't buy the property).

If you would like some advice about buying to let, whether you are a landlord with an existing portfolio or someone thinking of investing in the Falkirk rental market for the first time, call us on 01324 469840 or visit our office at 6 Vicar Street, Falkirk, FK1 1JL for further details. The Kettle is always on and we are always excited to get stuck into finding new Buy to Let deals in and around Falkirk. Let us take the stress away from you.

Don't forget to visit www.thefalkirkpropertyblog.co.uk to view back dated articles and deals from The Falkirk Property Blog. 

One bedroom flats in Falkirk, are they good investments?

I was out for my lunch the other day in Falkirk when somebody stopped me to ask about the Falkirk property market .... a common and delightful occurrence for the author of the Falkirk Property Blog! 

The discussion this time was about whether one bedroom flats in Falkirk make good buy to let investments. We had a good chat about this, both in the street and further in my office in Vicar Street.

There are around 18,215 flats in Falkirk. This represents around 32.3% of the housing stock here, with the national average being nearer 36.4%. The average price of flats in Falkirk is around £84,600, which is nearly 2% lower than 12 months ago.

You can buy a one bedroom flat in the centre of Falkirk, for a reasonable £50-55,000.  With a 75% mortgage, a landlord would only need to put down a £12-14,000 deposit to get the property.  These sort of one bedroom flats could achieve around £375 per month in rent giving a gross yield of around 8-9% per year on the purchase price. However, you must remember that every landlord’s tax and interest rates are different, so it is essential to research your investment carefully before committing.

Finally, let’s not forget about the potential increase in capital value of the property. I was looking at the one bedroom flats in Springbank Gardens and found that they have sold for around £25,000 in the early 2000.  This had grown by more than2.5 times at the height of the property boom in 2008 to around £65,000. The values have now dropped down to an average nearer £60,000 which is still more than double the early 2000 levels, but that is not to say we couldn’t see similar growth in the future.

If you would like some advice about what could make a good investment, please visit our offices at Vicar Street .... or just catch me when I am out an about the streets of Falkirk, I am always delighted to chat!