Homework and local knowledge make this Falkirk buy to let property a winner

Purchasing a buy to let property that makes financial sense often requires a bit of homework to find out what the seller is likely to be thinking and a bit of local knowledge.  Today’s buy to let opportunity from The Falkirk Property Blog is a perfect example of this.

Last week we highlighted a 2 bed buy to let flat in Victoria Street that had a few complications so needed a patience, ‘nouse’ and negotiating skills to make a successful purchase (see blog post dated 23 May 2016 entitled ‘Patience, ‘nouse’ and negotiating skills needed for this modern Falkirk buy to let opportunity).

Today’s buy to let opportunity is a 1 bed flat in the same complex at 45 Victoria Street.  The property is a top floor, 1 bed flat that is in walk in condition.  Victoria Road is between the back of the Retail Park and Victoria Park.

Double click here to get more details about this property

The property is on the market with JSB Gillespie & Co for offers over £52,500 so let’s say it goes for £57,500 – £60,000.  The property will rent easily and you could expect to get £395 per month in rent.  So that gives you a yield of 7.9-8.2% which is a decent return given the relatively low maintenance age of the property.

So now to the homework and the local knowledge.

Firstly the homework.  45 Victoria Street has been on the market since October 2015 which is an awfully long time in the current market and there must be a reason for this!  Well there is.  My homework has discovered that this property has been bought 3 times since it was built – it was bought for £38,000 in July 2003, for £51,500 in January 2005 and £67,500 in May 2007.  May 2007 was at the height of the last property boom so the current owners are looking at making a loss on the property and I know from personal experience how difficult this is for a seller to accept .... but also how futile for a seller not to accept as the market is always right.  Given that the property has been on the market for over 8 months now, the seller is probably at the stage now where they are feed up not being able to sell the house so are likely to be becoming more realistic about price.  It is worth checking that this is the case by having a chat with JSB Gillespie ..... there is no point in looking at this property unless the price is way below what the current owners paid for the property.

Secondly the local knowledge.  Doing the sums on 45 Victoria Street shows that you can get a decent return on this property which makes the Victoria Street property highlighted on last weeks The Falkirk Property Blog – which was a 2 bed flat for a similar price – look even more worth the patience, ‘nouse’ and negotiating skills to make a successful purchase!

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’s Premier Property Investor List .... join to stop keeping on missing out on the perfect Falkirk investment property

We are almost halfway through 2016, it seems that the first half of this year has just flown by. The last time I invited my blog readers to join our Premier Investor list was around 6 months ago so I thought I would share this post again.  Our premier investment list will give you direct access to any properties we find in Falkirk which will make a good investment. 

Having found our blog, you probably know a little more about the local market and about us, and you've probably even been in contact to ask us about something you've already seen. All good so far.

So why wait?

With blogs featuring great deals published daily, wouldn't it be great to be able to 'jump the queue' and get the inside info a few days early? We constantly check the market and keep an up to date list of potential Buy To Let properties in the Falkirk area, so we have a database we can refer to should you wish to consider a selection of options.

If YOU want to be the first to know about what would make a great Buy To Let investment that is currently available either on the open market or via our own sources (landlord to landlord sales etc), call or email us now and get your name put on our Premier Investor list on 01324 469840, pop through the door of our offices at 6 Vicar Street in Falkirk or send us an email on falkirk@thekeyplace.co.uk.

Don’t forget to visit the links below to view back dated deals for properties in, and articles about, the local Falkirk property market on www.thefalkirkpropertyblog.co.uk. 

£1,300,000,000,000,000,000 in loose change can help the Falkirk Property market

For those of you with a memory for financial matters, the 5th of March 2009 will  be a date etched into your memory as that was the date by when Mervyn King, the then Bank of England Governor, had slashed UK interest rates to the unparalleled figure of 0.5%. In just under five months, starting on 8th October 2008, the rate had come down from 4.5% to that low figure, all in an attempt to ensure the British economy survived the worldwide credit crunch. Nobody expected that, over six years later, rates would still be at that low level.

Last summer, people were predicting a rise in the New Year but that did not happen and now some forecast it may remain the same for years to come the due to the issues in China. Now, I am not some City Whiz kid with a hotline to Mr Carney at Threadneedle Street, but merely a humble letting agent from Falkirk, so I cannot profess to know what will happen to interest rates. However, what I do know, speaking to my Falkirk friends and Falkirk landlords is that these low interest rates have hit savers really hard.

If you added up everyone’s bank and building society savings in the UK, they would add up to £1,300,000,000,000,000,000 (that’s £1.3 trillion), most of which is earning a pittance in interest.  That is why more and more 40 and 50 year old Falkirk landlords have been investing some of that cash into Falkirk bricks and mortar, as they search for a low risk investment opportunity.

Buying a Falkirk buy to let property isn’t risk free, but there are certainly things you can do to mitigate and lower one’s exposure to risk. You see by buying a rental property, it potentially offers an enigmatically decent proposition in terms of being able to obtain attractive returns that beat inflation and savings accounts, yet without taking the levels of risk associated with stock markets.

The UK residential property market has long been the safest form of collateral for lenders of all varieties. Against a backdrop of a greatly changing economic environment, house prices have been extraordinarily robust, increasing by over 1879% between 1974 and today. Some will say there have been significant property price falls, namely in 1975, 1988 and 2008, yet each time after this has been followed by an upturn in property values. For the record, the stock markets in the same time frame only rose by 432.5%!

...and that is the best thing about buy to let property. Unlike the stock market, with its unfathomable equities, shares and bonds, that nobody really understands (as they are controlled by some faceless whizzkid in Canary Wharf!) with a buy to let property, landlords can take control and understand their investment .. in fact you can touch and feel the bricks and mortar investment.

...but before you go out and buy any old Falkirk property, plenty of landlords still get it wrong. You have to buy the right property at the right price. Recently I have seen some really heart breaking situations in Falkirk and the immediate area, of people paying way too much for a property, only to lose out when they came to sell. One example that comes to mind is that of a property owner in Rosebank Gardens .... a lovely new flat that was bought in March 2008 for £80,000. When it was sold in January of this year, it only obtained £60,000, a drop of 25% - a very disappointing result.

Next, you have to be aware of your legal responsibilities as a landlord when it comes to tenant safety, tenants deposits, energy certificates and the like. Get it wrong and big fines and even prison is an option – but that’s why many landlords use a letting agent to manage their property for them.

I cannot stress enough the importance of doing your homework. One source of information and advice is The Falkirk Property Blog where I have similar articles to this about the Falkirk property market and what I consider to be the best buy to let deals around at any one time in the Town, irrespective of which agent it is on the market with. If you haven’t visited and you are interested in the local property market in Falkirk .. you are missing out! .. www.thefalkirkpropertyblog.com.

Patience, ‘nouse’ and negotiating skills needed for this modern Falkirk buy to let opportunity

Patience, ‘nouse’ and negotiating skills, 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 Victoria Road in Falkirk.  

Victoria Road is between the back of the Retail Park and Victoria Park.  From the photos, it looks like this property has been rented out before.  It could rented out in its current stage if you had to but it would benefit from a wee bit of TLC before you put it on the market.

Double click here to get more details about this property

The property is on the market with Your Move for a fixed price of £60,000.  The property will rent easily and you could expect to get £450-475 per month in rent.

This looks all very straight-forward so why do I need patience, ‘nouse’ and negotiating skills I hear you say.  Well there are a few interesting things about this BTL opportunity ... which are probably connected.

The property has been on the market since mid February of this year which is a long time in the current market for a property of this type.  Also, the property is on at a fixed price which is unusual at the moment as virtually every property is on at ‘offers over’.  Both of these things suggest that the seller is struggling to sell the property which is a good thing for a buyer so long as the property is worth having (which it is in this case) as it means less competition. 

I suspect that the reason the seller is struggling to sell this one is because it currently has a ‘shared ownership’ arrangement in place.  Share ownership is where a buyer gets a helping hand to buy a property from somebody like a Housing Association.  The owner will, for example, own 75% and the Housing Association will own 25%. 

The advert says that the property is ‘Available for Outright Purchase or 25% Shared Equity’.  So the good news is that you can buy the whole property which is a must for a BTL investor but the not so good news is that there may well be a few complications along the way to buying this property as you are having to deal with two sellers.  This is why you need patience, ‘nouse’ and negotiating skills but the prize is getting a good deal on the purchase because there is less interest from buyers.

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 4 bed terraced house giving a 10% yield

For those of you who are looking for an investment property in Falkirk why not take a look at this property below. I personally think it would make a good buy to let investment if you’re looking to add to a rental portfolio or looking as a first time investor. 

This property is a four bedroomed terraced house on Shannon Drive.  Shannon Drive is off Maggie Wood’s Loan near both Bantaskine Primary and Falkirk High Schools making it an ideal family house in a desirable location.  This house has a large lounge/dining room, a fitted kitchen, four good sized double bedrooms and a bathroom.  There are gardens to the front and rear and on street parking.

This property is likely to attract Housing Benefit tenants although, as I have mentioned before, there are far more people on Housing Benefit than you probably think!

Double click here to get more details about this property

It has been on the market with Nest since early March 2016.

So what do the figures look like.  The asking price is offers over £90,000 so let’s say it goes for £95,000.  The Housing Benefit rate for a 4 bed is £787.80.  This gives you a rental yield of 10%.

If you would like to pick my brains about buying for investment purposes, pop into our new office at 6 Vicar Street, Falkirk for a coffee and we can have a chat!  Alternatively, give us a call on on 01324 469840 or email us at falkirk@thekeyplace.co.uk. 

Why should you consider buying to let in Falkirk?

We have mentioned in previous articles about the difference between Falkirk and the surround towns, such as Larbert and Linlithgow, this always gets a response from people asking me lots of questions. This time, I wanted to highlight, why you should be looking at buying a property to let in Falkirk. 

Many people in our part of Forth Valley, over the last few years, have seen the buy to let market become all about nest egg investment. It has been fuelled by pitiful interest rates on building society savings and reflects the fact that building society savings accounts are paying half a per cent interest and pension returns are struggling to match expectations, turning more and more people into landlords to secure their future. 

So what can you expect from your rental property investment? In the short term, rental yields are important, and in Falkirk, the average annual yield is in the order of 5.5% per year. However, that is based on averages, and as most landlords in Falkirk tend to buy starter home homes, apartments and terraced houses, the majority of which are achieving 6% to 8% per year depending on location and price in the town.

In the long term though, the question of capital growth is as important, if not more important (because if you have great short term yields, but the value of the property doesn't keep up with the rest of the market, you will have an asset that in real terms is dropping). Average property values in Falkirk currently stand at £133,816. On the other hand, property investment is a long term game, so I wanted to share with you the research I did for a couple of Falkirk landlords. Property values in Falkirk have risen by 11.1% in the last 5 years. Roll the clock back 20 years to 1995 and property values have increased by 257% since then when.

So, not only can you get a better return on your investment with regards to the annual yield compared to savings accounts at the moment, you also have got the additional capital growth with a property. Falkirk is also still developing, with more properties being built and business opening and expanding. This, along with Falkirk’s close proximity to Edinburgh and Glasgow should make for a stable market, bringing new people to the area. This will also keep the demand for property high, which will maintain and grow the property prices further.

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 649840, email us on falkirk@thekeyplace.co.uk or visit our office at 6 Vicar Street, Falkirk 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. 

High yielding re-development opportunity in Falkirk

Today’s buy to let opportunity from The Falkirk Property Blog is a wee bit unusual so I suggest that you take the weekend to mull it over.

The property is a 1 bedroom flat at 11 St Crispins Place in Falkirk.  St Crispins Place is just off the end of the Cow Wynd so it’s very central.

The flat is on the market with Future Property Auctions with a guide price of £12,000.  Why so cheap I hear you ask?   Well the simple answer is that the property is uninhabitable and needs a complete refurbishment.

Double click here to get more details about this property

Some buy to let investors think this is great as it gives them an opportunity to create value through the refurbishment, other buy to let investors think this sort of stuff is just too much hassle.  Personally, I do not mind the re-development work but I am always wary to ensure that I am very clear as to my projected costs (acquisition price, refurbishment costs and contingency) before I would buy so that I do not over pay ... overpaying is the easiest way to through away money in property investing.

Working back.  1 bed flats in this area rent for around £350 pcm.  Given the extent of the refurbishment work required I would be looking for a 15% yield on this property.  This gets you to a maximum total cost of £28,000 which to me means that you need to be able to buy and refurbish the flat for £28,000 so if you can buy the flat for the guide price of £12,000 that leaves £16,000 to refurbish the flat.  Is this enough? Best you go and see the property first and get you contractor to price it up.

This is an interesting opportunity but I appreciate that it is not everybody’s cup of tea so I suggest you mull if over over the weekend.

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

Is Falkirk bucking the national trend by increase its stock of houses?

A buy to let landlord popped into the office last week saying that he had seen a lot of new houses being built around Falkirk and wondered whether he should buy one of them.  As an experienced landlord, he was less interested in the low maintenance nature of these new houses, rather he was thinking more about whether buying a flat or a house would be better.

I did a bit of research and it interesting what I found.

There are currently far more houses in Falkirk than flats.  In total, 68% of properties in Falkirk are houses (split 20% detached, 26% semi detached and 22% terraced) with only 32% being flats.  Interestingly Falkirk has a higher proportion of houses (68%) than Scotland as a whole (63%) as the ‘Scottish as a whole’ figure is affected by the high proportion of flats in cities particularly Edinburgh and Glasgow.

The trend in Falkirk is to build more houses than flats.  Over the last 10 years more houses than flats have been built as 10 years ago 67% of Falkirk’s properties were houses and 33% were flats.  This trend is continuing if you look at the recent, current and projected building plans for Falkirk overall.  The main private sector developers (Taylor Wimpey, Barrett, Persimmon, Kier, Cala etc) are exclusively building houses which will more than offset any flats build by Falkirk Council meaning that overall less than 32% (the current proportion of flats in Falkirk) of properties being built will be flats.

Falkirk is bucking the trend seen across the country where the current proportion of flats (33%) is more than double the level of 20 years ago (15%).  More flats are being, and will continue to be, built across the country as a whole for a number of reasons:

• The current housing shortage is encouraging developers to create more and more flats.
• Institutional investors coming into the Private Rented Sector are building flats as they can manage blocks more effectively.
• The planning regime is encouraging the change of use of office and commercial buildings into flats in city centres.
• Councils are keen on high density flats as they can extract more council tax, which might influence planning decisions. They also need to solving the housing shortage on a local level.
• Developers are turning big houses into flats to increase their overall value.

So why is Falkirk bucking the national trend and building more houses?  I believe that it is a combination a few things.  Many people generally prefer to live in houses so will gravitate to where they are more common.  Many people like to live in new houses with gardens and green spaces around them and lots of this sort of houses being built around Falkirk.  Also, the back pocket is very important to people and lower house prices in Falkirk compared to Edinburgh and Glasgow attracts people into the area.

So back to my landlord, what did I say to him?  Well I advised him to ignore the larger new houses as the yields are never very good on these sort of properties.  I also advised him to have a look at some of the smaller new houses as these may fit his buy to let criteria.  Finally, remembering that he isn’t phased by doing works to properties, I advised him not to lose sight of the thousands of non-new properties in the area as many of these definitely will fit his buy to let criteria and particularly to think about flats as these are becoming a rarer commodity in Falkirk!

Having this detail of information at our finger tips, allows us to spot trends in the local market, which then enables us to give the very best advice to our clients. We don't charge for that advice.  If you want some advice, phone me on 01324 649840, come and see me in our offices (6 Vicar Street, Falkirk) or email either of us (falkirk@thekeyplace.co.uk).

Start your week with a BTL flat in Falkirk yielding 7.7%!

Let’s start the week at The Falkirk Property Blog with a 2 bed flat in Hayfield which is next to Bankside off Graham’s Road that is yielding 7.7%.

The property is a 2 bedroom upper flat in Hayfield in a block of 4 ex Council flats.  Hayfield is a cul de sac fairly near the centre of Falkirk as well being only a short walk to the Helix Park.

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 double glazing, gas central heating and a garden.  There is also ample parking.  

The flat 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 Nest, is offers over £59,995.  The property has been on the market since 31 March 2016 which is a fairly long time in the current market so let’s say you can get it for £62,500.

Based on our recent experience of renting this type of properties in this area, you should get a rent of £400 pcm on this property.

So that gets you to a yield of 7.7%.

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

Falkirk tenants feel the squeeze as rents continue to rise

As my regular readers know, my passion is talking about the Falkirk property market which I hope will be of interest to both home owners and buy to let landlords alike. However, this week, I want to highlight the plight of the tenants of Falkirk as more and more of their wages are being taken up by ever increasing rents.

The cost of renting a home in Falkirk has broken through the £490 a month barrier as the average rent for a property in the town now stands at £492 per month which is around 11.8% higher than 12 months ago.

House price inflation has certainly eased in Falkirk from the heady days of 2015, but still with retail price inflation (for goods and services) being around 0.5%, any increase in property values, no matter how small, means in real terms property is still getting more expensive. Meanwhile, many tenants have given up saving for a mortgage deposit as rents continue to take more and more of their wage packets leaving nothing to save for a deposit. That means, more and more tenants are deciding to rent for the long term and therefore the desire for decent high quality rental properties continues to exceed the available rental stock.

I would go as far as to suggest that rents are an ideal barometer to the state of the local economy as a whole and strongly believe that the recent increase in Falkirk rents are a sign that the Falkirk economy is picking up.

This means Falkirk landlords are continuing to capitalise on the Falkirk property market. The most recent Zoopla data suggests the annual property price rises in the town have eased over the last year, leaving property values 2.99% higher than 12 months ago. With property price growth easing off, the increasing rents mean that rental yields are strengthening for the first time in years to compensate. The mortgage market is still competitive and so everything is set to be good news for landlords even with the Finance Secretary’s and the Chancellor’s change of tax rules in the coming years for buy to let mortgages (so long as you take the right steps to mitigate some of the effect of these tax changes).

You can get some amazingly low mortgage rate deals at the moment, so with mortgage rates so low and returns still extraordinarily attractive, there’s rarely been a better time to invest in rental properties.

However, (you knew there would be a however!), it’s all about buying the right property at the right price. Not all property types are seeing equal rises in rents and capital growth.  Different parts of the town, different types of properties are experiencing quite different changes.  For example, the average length of time Falkirk one bed properties take to rent is 49 days whereas it takes on average 65 and 46 days to rent 2 and 3 bed properties respectively.

When you start comparing different parts of Falkirk, the numbers are even stranger!  The bottom line is that you must take advice and opinion. One source of advice and opinion is The Falkirk Property Blog. In The Falkirk Property Blog, you will see many more articles like this, discussions and even what I consider to be the best buy to let deals around, irrespective of which agent is selling it.

Whether you are a landlord, a ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit The Falkirk property Blog (www.thefalkirkproperty blog.co.uk), contact me for a chat (phone us on 01324 649840), come and see me in our offices (6 Vicar Street, Falkirk) or email us (falkirk@thekeyplace.co.uk).