Friday 28 November 2014

Chelmsford City Centre with a great return




This property looked to me like it could be a good bet. So centrally located, it would be ideal for the professional tenant market. It looks as though there could be potential for it to have off road parking as well, which for a City centre property is a bit of a bonus. 

On the market for £180,000, it may need to have some decorating done to freshen it up and the bathroom is listed as a grey suite, so I would recommend replacing this with a white one, to make it more appealing. 

This type of property would probably rent in the region of £850 - £900 pcm, which in turn would generate you an annual gross yield of 5.6% - 6%

For a City centre property, this is a great return, I'm sure I'm not the only one to have spotted this either, so if you are interested, I suggest that you get down to the agents asap, so that you don;t miss out!

Thursday 27 November 2014

Why should you consider buying to let in Chelmsford?



 
In last weeks’ article, we spoke about the difference between Chelmsford and Braintree property markets. Now this resulted in a number emails arriving into my inbox as well as a few people popping into my offices for a chat about investing in buy to let.

Many people in our part of Essex, over the last few years, have seen the buy to let market become all about nest egg investment. It is fueled 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 Chelmsford, the average annual yield is in the order of 4.5% per year. However, that is based on averages, and as most landlords in Chelmsford tend to buy starter home homes, apartments and terraced houses, the majority of which are achieving 5% to 6.4% per year depending on location and price in the City.
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). As we mentioned in a previous article, average property values in Chelmsford currently stand at £314,212. Property values in Chelmsford have risen by 22.4% in the last 5 years. 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 Chelmsford landlords.

Roll the clock back 10 years to 2004 when the average value of a property in Chelmsford was £177,700. 15 years back to 1999 makes really interesting reading, as the average Chelmsford property value was only £107,800.  30 years ago was around £50,000 and just for a bit of fun, we looked at 1974 at it was around £14,800!

However, if one looks at say a 30 year investment period, if you had put your £50,000 into the stock market in 1984 instead of buying a house in Chelmsford, your shares today would be worth £238,800. Put the same £50k money in a Building Society account and you reinvested the interest back into the account, and your Building Society passbook would have around £280,250. Compare that with the property market in Chelmsford and the property would be worth £314,212 today.

Not much difference to the building society until you realise that with the rental property, as well as the capital growth in the building you would also have received rent over those 30 years, which you wouldn’t have received with the Building Society account!

Wednesday 26 November 2014

1 bed maisonette in Chelmer Village



Just popped on to Rightmove and saw this property. It seems to be quite nice from the photos, a simple property perfect for the lower end of the rental market. 

Being relatively cheap to buy as well at £135,000, this sort of property would easily achieve around £600 pcm rent. When you do your sums on these figures, you would be looking at a yearly return of around 5.3%

Being at the lower end of the rental market, means that there is always demand for this type of property, so you can't go far wrong here if you are looking for a property that will give you minimal void periods.

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Monday 24 November 2014

Chelmsford central 2 bed house


I saw this house and I thought what a great property this would be for an investment. It looks immaculate inside and these houses are always really popular with the rental market, due to their location and size.

It has just come on to the market for £222,995, which feels like the right sort of money, considering the prices of some other similar properties on the market at the moment, it seems to me that the Vendor is looking to achieve a quick sale. This property would probably rent in the region of £900 - £950 pcm, which would generate you an annual yield of 4.8% - 5.1%. 

Another interesting factor which I wanted to point out is the actual increase in capital growth. As we have spoken about many times, it is not always down to the biggest 'yield', the rise in value should also be taken into account. Some houses may not generate a high yield, but their capital growth potential is far greater. This particular property was last sold in 2011 for £193,000. If it achieves it's asking price of £222,995, you are looking at a 15% increase in capital in just 3 years! The majority of this rise to be fair would probably have been just in the last year alone. 

If you would like any advice on where to buy (or where not for that matter), feel free to drop me a line at stephen.frost@martinco.com

Friday 21 November 2014

Chelmsford City Centre Apartment


http://www.rightmove.co.uk/property-for-sale/property-47027869.html

I haven't seen one of these flats come to the market for a while, so thought I would put it out there as it seems to be quite a good deal.

In the City Centre, ideal for the commuting market and also coming with a parking space, to me, this should not be sniffed at. On the market for £209,950 with a local agent, I would recommend that you get yourself a viewing booked before you miss out. 

These properties rent out for around £895 at the moment, so if you do your sums, you would be looking at an annual return of around 5.1%

This flat may not be as swanky as say the Marconi Plaza development with a gym and concierge etc, but it's also not as expensive as them. You can get yourself a decent City centre investment property without breaking the bank!