Are New Builds A Good Choice For Property Investment?

A local chap came into the office recently to discuss investing in a buy-to-let property. He was thinking about buying off plan and wanted to discuss the investment potential.

Tenants love new build property and will often pay a premium for them in the right location.

House developers build for a profit and charge a premium for their product, so after buying, the prices may fall or hover around their sale price for a year or two and then start to rise in line with the rest of the market.

However for new owners there are advantages to new build properties. They come with guarantees and when minor problems crop up much work can be done under warranty (such as a problem with the newly installed cooker, extractor fan or the odd leak which appears as a snagging issue)

However pay attention to service charges, these can dent rents.

Belvoir Lettings Falmouth don’t sell property - we are lettings specialists, but we do give advice on what might make a good buy-to-let property in Falmouth and the surrounding areas. We don’t charge for this service but we would like to manage your property or help you find great tenants!

Is Client Money Protection important to you?

This week Monday morning began with a call to the office from a new Landlord:

‘Hello, I am about to complete on a flat in Penryn and I’d like to know what you would charge to manage it?’

Nothing to complain about there and it’s always nice to talk to a new Landlord. We had a brief conversation. I found out more about the property and the Landlord, and he found out more about the services we offer at Belvoir and how we can meet his requirements. We’re due to talk again later this week, so all very positive.

But one thing really struck me about this Landlord, his last question to me was ‘Do you have Client Money Protection?’

He’d heard horror stories about agents using the rents they receive to support their businesses, resulting in Landlords not receiving rents for several months, and in the worst cases the agencies going out of business and that rent never being passed on to the Landlords.

Client Money Protection (CMP) gives peace of mind to Landlords AND tenants by ensuring that your money is safe and isn’t being used inappropriately.

At Belvoir Falmouth we’re part of the National Approved Lettings Scheme (NALS)  http://www.nalscheme.co.uk/ and their CMP scheme, however there are other similar schemes such as ARLA and RICS.

We recommend following this Landlord's example and asking any agent you talk to whether they have CMP and then looking at that scheme's website to check they’re up to date.

Student Letting

Have a listen to our latest podcast from Pirate 2 Homes & Gardens Show.  This week it's all about student letting.

https://soundcloud.com/elvoiralmouth/belvoir-segment-12-student-letting

Are You a Pet-Friendly Landlord?

At my letting agency business in Falmouth we are proud members of the Lets with Pets Scheme run by the charity Dogs Trust, a scheme supported by the National Approved Letting Scheme.

Instinctively, most Landlords would prefer not to rent their property to tenants with pets. Almost immediately concerns are raised around issues such as the noise of a barking dog, furniture being scratched by sharp claws on a cat and the occasional ‘accident’ ruining carpets. This can make it very difficult for pet owners to find a suitable home.

However, nowadays roughly 48% of the population have a pet, so taking a more pet-friendly approach can dramatically increase demand for your property!

Our experience is also that people with pets tend to be looking for homes for the longer term. Anyone who’s ever moved house with a cat can tell you how traumatic it can be, so it’s not something to do on a regular basis.

Obviously concerns will still exist but these can be mitigated by asking for a larger deposit, inserting additional clauses in the Tenancy Agreement and agreeing that the tenant will carry out a full professional clean at the end of the tenancy. Also, you can ask key questions up front such as whether a cat will need a litter tray or cat flap, and how long a dog will be left at home alone.

With 20% of homes in our area being privately let, opening up your property to pet owners could give it the edge!

If you're a Landlord considering whether to open up your property to those with pets, or you're a tenant finding it impossible to find a property with your pet in tow, please give us a call to discuss your situation.

The Lets with Pets scheme also has lots of helpful advice and guidance for landlords and tenants available on their website Lets with Pets

Don't neglect your rental property over Christmas & New Year!

You can never fully switch off from your responsibilities as a landlord, whether that be taking on new tenants, completing deposit disputes or making sure your property is kept in good condition over the festive period. There are a couple of things you can do to make sure your properties are in order, ensuring the safety of your tenants and hopefully a stress-free Christmas and New Year for you.

Are your tenants leaving the property over Christmas & New Year?

The deposit protection schemes received a lot of claims following the severe winter weather in 2010. The majority were the result of burst or frozen pipes at student houses where tenants had left the property to spend Christmas with their families.

In the worst cases, burst pipes resulted in damage to carpets and flooring, kitchen appliances needing replacing and claims for lost rent whilst damage was repaired. Some landlords faced repair bills of several thousand pounds.

To avoid this stress and expense, you should contact your tenants to check if they’re going away to ensure that the proper measures are taken to avoid this kind of damage.

Here is some guidance on keeping your property safe during cold spells:

1.  Insulation – Ensure water pipes and tanks are lagged and insulated.

2.  Heating – Advise tenants to keep the heating on, at a minimum of 15 degrees, if they’re going away. It’s also sensible to open the loft hatch allowing air to circulate and prevent pipes freezing and bursting in the loft.

3.  Boiler servicing – Ensure that gas and oil boilers are serviced every 12 months.

4.  If the property is going to be empty for an extended period it’s sensible to have the heating/water system drained by a qualified contractor.

5.  Chimneys – Ensure they are swept once a year by a professional chimney sweep, ideally before the tenant starts using the fire.

6.  Smoke Alarms – Check that smoke alarms are fitted in all properties and that they are all working properly. Replace batteries as necessary. 

5 Myths about Student Letting

Over the years, many misconceptions have surrounded student living and the properties they rent, but the majority of these simply aren’t true. Here, we uncover five total myths...

1.     Students don’t care about location

Whilst students may have limited budgets, this doesn’t mean they’ll live anywhere in pursuit of cheap rents. Ultimately, they’re looking for somewhere within a couple of miles of their University campus and the town centre; so it’s crucial that you find a property to rent that’s in the right area.

2.     Students don't respect property

With students now demanding more, and properties with high quality furnishings, this myth is definitely no longer the case. Failure to respect the property, and landlords would struggle to find student tenants.

What this does mean, however, is that landlords with student accommodation to rent will need to invest in quality furniture and fittings, with a modern interior. Don’t scrimp with cheap furnishings, as it’ll need to withstand wear and tear, and in the long run, you could end up forking out for replacements.

3.     Students don’t mind living in grotty properties

Again, this is another total misconception – students today look for a comfortable property that they’ll enjoy living in. It’s worth acknowledging that whilst student tenants may not demand the best of furnishings and decor, their parents most certainly will if they’re asked to be a guarantor for the rent!  A scruffy, dirty student property will most definitely struggle finding (and keeping!) quality student tenants.

4.     Students don’t pay much in rent

While it's true to say that students would prefer to pay a low rent because of their limited budgets, it isn't true to assume that all students are like this. There is a growing demand for quality accommodation which means that students are willing to pay realistic market rates to enjoy these properties.

Additionally, when a house is recognised as an HMO, the reality that the property has undergone inspection to ensure it reaches a certain standard, will draw in students looking for good-quality housing; meaning higher rents can be charged.

5.     Student houses are too much trouble

Again, the vast majority of students are decent, hard-working people who have been undermined by the antics of a very small minority. So while there are some badly behaved students, most students today have too much invested in their education to cause problems for their landlord or their neighbours. Additionally, most students sign up for a year-long tenancy agreement, ensuring the consistent payment of rent – even when they’re not residing in the property during the summer months.

Now the myths have been uncovered, here is a total truth about renting to students: 

Student properties for rent are a good proposition

Essentially, the student accommodation sector is a buoyant one, and looks to expand with more and more students entering University each year in order to secure their future job prospects.  As such, the yields are better than general residential letting making student lets a good investment for landlords, provided they provide good quality accommodation and maintain their properties well.

There are many misconceptions about students and their demands for student accommodation; but in today's world, things have changed and their demands have dramatically changed because going to University is an expensive proposition.  As such, landlords are now catering to a more discerning type of student tenant. Those who get their offering right will enjoy quality tenants who pay on time and are a delight to have in the property.

Belvoir Lettings Falmouth don't sell property - we are lettings specialists, but we do give advice on what might make a good buy-to-let property in Falmouth and the surrounding areas.  We don't charge for this service but we would like to manage your property or help you find great tenants!

Why not call Annabel Leach on 01326 210304 for an informal chat or pop in to our office at 46 Killigrew Street, Falmouth TR11 3PP.

www.belvoirlettings.com/falmouth

Email:  annabel.leach@belvoirlettings.com

A cottage in Penryn vs a terraced house in Falmouth for better rental yield?

We were talking to a landlord recently, who was considering whether a 2 bed cottage in Penryn or
a 2 bed terraced house in Falmouth would make a better buy-to-let investment. He was particularly interested in which would offer a better rental yield. We set about doing some research to help him with his decision.

We have been reviewing current properties for sale at these locations and, at the time of writing
this article, there is a 2 bed cottage in Chapel Lane Penryn with a recently reduced asking price of
£149,950. This should achieve a market rent of c. £675 pcm giving an annual gross yield of 5.4%.
More if the actual purchase price achieved is lower!

This property last sold in 2008 achieving a sale figure of £129,000 meaning it has increased in value by over 16.2% since then, although some cash has been spent refurbishing it.

On Trevarth Road in Falmouth there is a 2 double bed end terraced house advertised with an asking price of £167,500. This house was last sold in 2007 for £154,000 showing an increase in value over a similar period of 8.76%. This property should achieve a rental figure in the region of £700 pcm giving an annual gross yield of 5.0%. However the downstairs bathroom can be a negative feature.

Ultimately, we found both properties to be good investments for rental yield but it will come down to careful selection of the property to achieve the best returns.

Belvoir Lettings Falmouth don’t sell property - we are lettings specialists, but we do give advice
on what might make a good buy-to-let property in Falmouth and the surrounding areas. We don’t
charge for this service but we would like to manage your property or help you find great tenants!

Why not call Annabel Leach on 01326 210304 for an informal chat or pop in to our office in Killigrew Street, Falmouth. 
www.belvoirlettings.com/falmouth  
Email: annabel.leach@belvoirlettings.com