EXAMPLES OF OUR WORK ...

BUY TO LET IN EAST GRINSTEAD (500 word article) ONE OF THESE IS £100+vat

I have recently been speaking with a number of landlords about the importance of a balanced portfolio, when buying and renting out property. The balance between buying properties that offer good monthly returns (high yields) but quite often offer poor capital growth (ie they don't increase in value that much over the years compared with the average) verses properties that do go up in value quicker but often offer a lower yield. Another consideration has to be the mix of town properties verses the villages. Choosing the right village though is very important. Living in villages often has higher costs, especially transport and petrol costs.

Some tenants don't buy because they can't afford the mortgage, so if you buy in the wrong village, you could limit yourself to the type of tenant who can afford those extra transport costs. However, one village that has a high demand with tenants is East Grinstead. Particularly popular with staff from Gatwick airport and people from the nearby RAF Henlow. With two churches, three pubs, two shops, a village hall, East Grinstead offers a peaceful environment matched to an active and varied social scene. The village consists of some 800 dwellings of different housing types and a population of nearly 2000 people.Rental prices range at the lower end from around £650 per month for a small terraced cottage, although we recently let a lovely 1bed annexe / maisonette in the village, which literally went in hours at £600 per month. For the mid £700's , a larger 3 bed semi can be rented whilst a £1000 per month will get you a large 4 bed detached house. All very reasonable rents, which means with the the RAF base and Gatwick airport on the door step, there is always demand for properties in the village. So, does that mean you should buy a property in East Grinstead as a buy to let investment ? Before I can answer that, you must really consider the capital growth vs yield question. Some Haywards Heath and Crawley buy to let investors often make the mistake of chasing yield over capital growth.

Some investors believe that by chasing high yielding properties, in say the poorer parts of Crawley, they will make a faster profit than waiting for capital growth. The problem with this is that to achieve high yield you usually have to compromise on capital growth. Therefore it would seem the most logical solution is to find a high yielding property in a strong capital growth area but, these simply don't exist and in actual fact, most of the time, lower yielding properties have a better capital growth. This is because there is generally an contrary relationship between yield and capital growth so the higher the yield, the lower the capital growth and the higher the capital growth, the lower the yield. Property investment in Haywards Heath and Crawley is about balancing the two. Not many landlords, especially those who use buy to let mortgages, can afford to service high levels of debt without a reasonable yield , which forces them to look at ways of making an investment affordable by finding the right balance between capital gain and yield. Yield is critical to the survival of an buy to investment but it’s not the key to building wealth. Don’t chase yield for yield’s sake, but rather chase capital growth with enough yield to make it serviceable because in the long term it is the capital growth, not the yield that will generate you the wealth and the financial independence you are seeking. Next week, I will show that East Grinstead could just offer that right balance of yield and capital growth.

East Grinstead property market - Good Capital Growth? (500 word article)

For those that read last week's article, I promised that I would look at the East Grinstead property market and compare its Rental yield and capital growth for the buy to let investor.. For those new to the buy to let investment game, the yield is the yearly rent from a property reflected as a percentage of the value of the property (one might consider it in the same light as the interest rate from your savings account) whilst the 'Capital growth' is the amount the property goes up in value each year reflected as a percentage of the value of the property. The average value of a property before the crash of 2007 in East Grinstead was around £301,000. The year after, in the 2008 slump, prices dropped in the village to £279,000. Considering values today in the village are around £312,000, if you bought in East Grinstead in 2008, values would have increased by just over 11%. When you consider values in Crawley since the 2008 slump are only 4.5% higher and in Gatwick 6.2% higher, this is an excellent increase.

According to my records, three properties sold in the village in July. A very nice modern extended 4 bed semi on Wheelwright Close, which came onto the market in 2012 at £250,000, sold for £225,000 this February. Also, a small 2 bed detached house on Woodmer Close in the village, sold in March for £210,000. Of the 800 properties in the village, an impressive 95 have changed hands in the last five years, so properties certainly come up for sale and they most certainly sell. However, property investment cannot be judged over short time frames and most certainly not by averages. I often, when looking at a market for a landlord, like to take a longer look at the market, and consider 10 to 15 years a more suitable time frame for capital growth. After doing my research, a very nice stone terraced cottage, sold on Church Street for £55,000 in June 2000. It sold again this year for £125,000. Now the average property value increase for Haywards Heath and the immediate villages, in that time frame was 77.6% whilst property saw capital growth of nearer 127%. Put the same £55,000 in the stock market in 2000, and in 2013, it would have risen to £55,880, a not so impressive rise of only 1.6%.

That's not to say everything in East Grinstead turns to gold. There are good properties, that have dropped in value. A very pretty 3 bed semi detached cottage sold in 2005 for £325,000. If it has followed the Haywards Heath averages, it should have sold for £351,000. However, some lucky person purchased it for £310,000. As we don't sell property, I can always give my landlords and landlords who aren't with me but want a second opinion and even people who are thinking of becoming landlords, my unbiased opinion on what to buy and not buy. I pride myself by knowing the market intimately, so I can give some great advice and opinion. It might not be what you want to hear but, I can assure you, it is what you need to hear. If you want to chat about property investment in the area, be it Haywards Heath, Crawley, or any village, including East Grinstead, then if you buy right, you will build yourself some capital growth for the future.

BRIGHTON OR WORTHING ..BEST TO BUY? (300 word article) - 4 of these are £300+VAT

A landlord with a small property portfolio came into our office on the High Street (near Waitrose) last week. He in lives in Hove, near the Golf course and has properties in both Brighton and Worthing. He wanted to ask our opinion on the property markets in both town’s and where he should purchase his next Buy to Let property. Looking at Worthing, the average property price can be an impressive £355,600 and the average rent is equally high at £882 per month. In Brighton, an average property is £317,800 and the average rent is only £852 per month. The annual yield in Worthing could be only 2.9% per year, compared to Brighton where he could achieve an annual yield of nearer 3.2%.

However, investing in property is not just about yield. One must also consider the increase in value of the property. Quite interestingly, property values over the last two years in Worthing have risen by 5.4% over the last two years whilst in Brighton, in the same period, they rose by an impressive 8.3% (all of that being in 2013 as property values were stagnant throughout 2012 in Brighton) It goes to show both towns can be a good area for an investment property, but it is a decision that shouldn't be taken lightly. These are only averages, so the yields for some 2 bed apartments in some areas of Brighton can achieve yields of 4.5% to 4.7% per year, so adding the capital growth, existing landlords have seen a double digit return in 2013 .. better than the Building Society! If you want to know my thoughts on the local property market, feel free to pop into our office’s near Waitrose