100k for the successful buyer – a little work required… Brixton SW2

Another day, another brilliant investment. It’s been a good week and I’ve answered over a dozen emails from excited investors picking my brain about the latest thoughts on the “Emerging Outer Prime” market I’ve identified. I had a few people say I don't talk about adding value enough. Stand back.

Here’s one however with a bit of a twist, and for a change it’s on with XanderMatthew! Naturally that leads one to believe I’d be biased and inflate figures to make it sound better than it is, but truthfully it’s such a brilliant buy as a do-er up-er I don’t need to.

Here it is:

http://www.xandermatthew.com/SW2/Brixton/Branksome-Road/beds-3/property.vtx?p=D819B318-5B33-418B-B27E-75DD6DEA78B9#&tab-details=images

Branksome Road SW2. A 3bed for 600k? meh. But what if I told you that it had planning permission for… wait for it… conversion into two units!

Yes. This could be an ideal opportunity for someone looking for a project they can do in their own time, or even a seasoned property developer. Appealing to a range of audiences this one won’t sit around for long. Buy it, live there, do the work over time as it’s perfectly habitable now and add value when you get around to it. Or, if you are  seasoned investor, get in, do work and resell straight away for a cool profit.

Have a look at the floor plan and compare this to the plans for the conversion.

Floorplan: http://lc.zoocdn.com/876883ec6ee4f5809d9e5863aa770058f11a5244.gif

Proposed plans: http://planning.lambeth.gov.uk/online-applications/applicationDetails.do?activeTab=externalDocuments&keyVal=NGSFXHBO67000 

Essentially there are a few half landings involved but try and follow me.

• “Ground floor” will be the lower half of the new 2bed flat.
• Kitchen becomes bedroom 2
• WC to be removed to make way for new internal staircase (existing stairs to become communal to the top flat)
• Bedroom in the middle to shrink 80cm to allow for staircase
• Reception to incorporate open-plan living/kitchen
• And that’s your two bed flat. Resale values are looking around the £475k plus with plenty of comparable evidence of recent sales at that sort of money:

http://www.zoopla.co.uk/for-sale/details/34323875 2bed under offer @ 475k
http://www.zoopla.co.uk/for-sale/details/35234343 1bed plus box room under offer @ 500k

Top flat

• Carry out loft conversion with dormer.
• Make the loft room the open plan kitchen/living
• Existing back bedroom to stay where it is
• Smaller bedroom to be converted to bathroom
• Resale around 325k, one has gone under offer which is near enough identical:

http://www.zoopla.co.uk/for-sale/details/34957298

http://www.zoopla.co.uk/for-sale/details/36348849 this one is for sale at £385k, perhaps optimistic given the square footage, but you never know…

and this one even sold at 410 but it had a garden: http://www.zoopla.co.uk/property/1-clapham-park-terrace/lyham-road/london/sw2-5ea/23126170

so value probably somewhere in between the two first ones depending on the finish and final square footage.

“So what’s in it for me?” I hear you thinking… Well the owner has already had the plans drawn up, so no costs there. South London lofts has quoted (according to the vendor but I'm sure he can produce the quote for us) £40,000 to do the loft conversion on a “supply your own bathroom/kitchen materials” basis. So add in another 30k to allow for bathrooms, kitchens, general conversion work. 600k purchase price. 20k stamp duty. Add solicitor fees of £2k and you’re in for 622. Leave 70k to one side for works. That’s 692. Resales of 325 and 475 = 800 (probably more by the time the work is done bearing in mind the market is rising). Less a few fees of say £17500 to allow for agents’ and legal fees. You’re in for 692. You’re out for 782. That’s 90k. That's what's in it for you. Conservatively speaking of course.

Call me for investment advice, tips or even to run a property past me to pick my brain. I'm all ears and I can talk all day about property

Drop me a line on 020 3397 2099 or email jeroen@xandermatthew.com.

Two very interesting 3bed flats in Emerging Outer Prime SW2 – Tulse Hill - 6.5%+ yield!

It’s not often that two flats of the same good yielding nature catch my eye at once. Truth be told my radar hasn’t been picking up many good buys recently as you may have noticed as less blog alerts come through on your email.

Time to revisit older instructions. As a seasoned buyer you will know that generally Joe Public will want to “test the market” at a higher price to “see what happens.” I can tell you straight away with my dozen years of experience that this seldom results in the desired effect. Generally the property becomes old and stale and remains unsold as buyers look elsewhere for value. Buyers do it in the supermarket when comparing baked beans, they do it for cars, well surely they do it for property too! Message to Joe Public: If your property is overpriced it won’t sell.

But that’s good news for us investors. The time is right to get in there with an offer they can’t refuse…

Property 1: 3 bedroom flat in Tulse Hill SW2. Priced at £299,950 and available on RightMove since early April. This means that all the buyers on Dexters register will have been called to death and been around to see it if they so desire. Still unsold, which means that they are waiting by the phone for you to come and see it and make them happy with an offer they can bring to the vendor with the words “well this is the best price we can achieve.”

http://www.rightmove.co.uk/property-for-sale/property-34179831.html

It’s a good flat, a little bit out from the station but as previously mentioned on the blog I predict this area will see the biggest % gain in prices vs something closer to the station. Rents probably around the 380-400pw mark. That’s a 6.6% yield at asking price using 380pw! You may need to spend a penny or two redecorating, but in general it’s good to go.

Property 2:

Same as number 1. Can’t really say much about internals as this amazing agent hasn’t bothered to go inside with a camera, but all the same it’s worth a look as I’m sure you’ll be viewing property 1 anyway, and this is in the same block.

http://www.rightmove.co.uk/property-for-sale/property-32018016.html

Figures as above, count on 6%+yield. Interestingly though, the description reads “offers over £275,000” which is vendor speak for “275 is the lowest I’ll go.” And if it’s been on since November last year I think they will be agreeing with the agent when an offer under that comes in and the agent tells them “you should take this offer, it’s the best you’re going to get and we’ve been at it for 6 months!”

Just for comparison have a look at this page, you’ll see a similar one (granted in better condition) completed in February of this year for 285k.

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=50470829&sale=53359169&country=england

So would you pay 285 for property 1 or 2 above? Sounds like it makes good investment sense!

Just to throw this at you as food for thought here’s one which is ludicrously overpriced with one of those “do it yourself” type outfits, so clearly someone who’s plucked a value out of thin air, price at £362,500. Is it really 62,500 better than the other flats? No, I didn’t think so either:

http://www.rightmove.co.uk/property-for-sale/property-47411465.html

Property 1 and 2 above deserve a closer look with your keen investor eye for sure!

Give me a call to talk property or weather – I’m on 020 3397 2099. Or email me via tinterwebnet on jeroen@xandermatthew.com. If you are looking to investment feel free to pick my brain to make sure you money goes as far as it can do.

Emerging Outer Prime - 3bed SW9 6%yield STILL ON MARKET - BUY NOW!

I've been absolutely inundated with requests for larger properties in readiness for the summer market. The summer market always brings out the students and hopeful graduates in search of accommodation to share with their friends. As my colleagues and I have said in the past, the properties with the lowest voids are generally the “better value” ones as opposed to top or bottom of the range. Nobody wants a Lada, few can afford a Rolls...

I have found something in exceedingly average condition that you could buy and do nothing to. In its current condition it would probably let for £380-400ish per week, which means a 6% yield at asking price. Or perhaps in the order of £425pw when you've spent money. Same yield, so why bother really?

It is very similar to the recent one I posted on Saxby Road, and with a little bit of work could fetch a lot more. To you Mr/Mrs Investor the choice to refurbish or not. New bathroom, mew kitchen and redecoration throughout would set you back in the order of £20k I would have thought. But don’t go too far. You don’t want to present a Rolls Royce to the market, only to end up with would-be tenants after a nicer block for their money, or something closer to the station. Match quality with location and your target audience - 1st jobbers and students aren’t after Villeroy and Boch, they want value for money. Clean, tidy, presentable with half decent furniture goes a long way. And please, no IKEA, it doesn't last the test of time. Wood laminate is passe, even for the early twentysomethingers. Solid wood (not mahogany or oak, let’s not get too excited) looks expensive but isn't and it lasts!

Check out this ideal investment in what my colleagues and I like to refer to as “Emerging Outer Prime Market” territory. Further from the station, better value. Cyclists and bus-goers rejoice in this bargain beauty:

http://www.rightmove.co.uk/property-for-sale/property-50972900.html

Bear in mind this one is still on the market despite us posting it a month ago - surely a bargain is to be had here on price!! Make this vendor an offer they can't refuse and get completed before the August Rush. We're nearly in May so considering 8-10 weeks of conveyancing it will be ready in the nick of time for peak demand. My colleague Brook was on to a winner here. Nobody has picked up on that yet. Will you get in there with a cheeky bid now this vendor has had ample time to market and nobody is realising the potential of this great rentable flat?

Call me or email me for further advice on Buy-to-Let opportunities, investments, or tenancy matters on jeroen@xandermatthew.com or 020 3397 2099.

6% yield in emerging outer prime market - Brixton Hill SW2

As you may have read in my past articles the outer edges of SW2 represent excellent value for money and have shown a strong historic growth. As the popularity of alternative modes of transport increase (cycling to work, buses, trains as opposed to tubes) we will no doubt continue to see good growth on the outer edges of postcodes which have, in the past, been overlooked as good areas for rental properties.

Look no longer. Marketed today by Morgan Randall is this beauty:

http://www.rightmove.co.uk/property-for-sale/property-34087464.html

A 3 double bedroom property situated near the top end of Brixton Hill. Easy access to Clapham South and Brixton by bus. Estimated rent for the property would be £450pw, so a yield of 6.1% at asking price.

A 3bed in the same development completed at £330k in Dec 14 so perhaps the pricing is optimistic, or perhaps a sign that people are catching on to the fast rising demand/prices that outer areas have to offer. Only time will tell. In summary, take my money.

As always do drop me a line with your thoughts or questions. If you have money to invest in property I’ll happily help you get the best yield I can, likewise if you are looking to sell I have plenty of investors looking for good purchases. jeroen@xandermatthew.com.

Emerging Outer Prime London Area Sees High Yield

This 3 bed property in Tulse Hill offers a buyer a chance to acquire a flat that is poised to benefit from high yields. At an asking rental price of £380 per week the yield will be 6.58% which is not so readily available nowadays. Jereon Hoppe (director of Xandermatthew) has discussed the advantages of capitalising on the more competitively priced properties available which are slightly further away (emerging outer prime) from Tube stations such as Tulse Hill. There’s plenty to do in the area with Brockwell Park moments away, locals enjoy swimming in the lido as well as all that the trendy and authentic village of West Dulwich which is close by has to offer.

http://www.rightmove.co.uk/property-for-sale/property-34179831.html?utm_content=v2-ealertspropertyimage&utm_medium=email&utm_source=emailupdates&utm_campaign=emailupdatesinstant&utm_term=buying&sc_id=15889878&onetime_FromEmail=true

Given its location of being within an emerging outer prime area the property stands to benefit from capital growth which the neighbouring prime emerging property areas such as Clapham have continued to enjoy even in the run up to the election. This is largely due to the area being regarded as a hotspot for young professionals and overseas investors too with the trend set to continue due to the undeveloped stock in the area.

Freehold houses are better investments aren't they? Not always…

A landlord came in to see me the other day to talk property. Naturally I obliged. They had always invested in freehold houses. “I don’t like leasehold properties.” He said. “The freeholder is always asking for service charges and ground rents.” Naturally I agreed, as being a leaseholder does mean that you bow to a superior landlord ultimately. However, emotions aside, I urged him to look at the pound notes rather than the feelings. I was confident his feelings would turn gleeful when I drew his attention to the return as opposed to focusing on what he was paying in costs.

A leasehold is not a bad thing. Naturally some freeholders will be better than others, but to some extent it allows for more hands-off investing. A management company will be looking after the block, so all you would need to worry about is the confines of what’s behind the front door. Easy. And more lucrative it would seem in most cases.

We compared two properties up for sale at the moment:

Rathmell Drive – 2bed flat near Clapham South Station – Asking price of £339,950 – est rent 350pw = 5.4% gross yield.

http://www.rightmove.co.uk/property-for-sale/property-50008571.html

Estoria Close – 2bed house near Brixton and Tulse Hill Stations – Asking price of £475,000 – est rent 400pw – 4.4% yield

http://www.rightmove.co.uk/property-for-sale/property-50571167.html?premiumA=true

Naturally the gross rent in the latter property will be closer to the net rent as there will be less costs in the order of service charges, ground rents, sinking funds and so forth, but to put this into perspective… for the latter to yield the same it would need to achieve £493pw in rent. In conclusion we agreed that no matter how frustrating freeholders and management companies can be they don’t cost anywhere near £93pw!

If you are after any property advice, be it sales, rentals, buying or letting please send me a line or call the office on 020 3397 2099. I'm always keen to talk property with you.

Jeroen Hoppe

Director

XanderMatthew

Clapham - high yield investment opportunity

Most London investors consider properties close(r) to train stations as they can then capitalise on their return, we all know that renting a property closer to the station will generate more rent opposed to a property that is located further from a train station regardless of bus options.

Take this 3 bed for example, in a prime location and I estimate it would let for approximately £460pw, resulting in a yield of 6% which is certainly worth considering.

Roy Ridley House, Clapham Road Estate – Guide £400,000

http://www.rightmove.co.uk/property-for-sale/property-51658040.html

I am finding that there are still lots of renters are on the lookout for a property close to a train station, and as this particular property is located right next to Clapham North (northern line/zone 2) train station it will certainly appeal. With Clapham High Street just around the corner this 3bed will attract young professional sharers due to the vibrant environment/night life it has to offer. Three bed properties are always high in demand with the younger audience. Having worked in many different locations in and around London, I am now familiar with the prime locations one can invest in. Not only is this property an ideal buy to let you will also benefit from the high rental yield year in and year out due to its central location. Give us a call on 020 3397 2099 for a price update on your current rental property if you think your tenancy is expiring in the next few months or drop me a line for any other enquiries: Kosta@xandermatthew.com 

I had a brilliant chat with an investor landlord the other day

I received a brilliant response to last week's mailshot. Reason being it included the Quarter 1 property update. In case you had missed it please download it here.

I had a few landlords pop in over the last week and sit down with me for some advice, but one particularly stood out. He asked me for a moment of my time, which I happily gave him in order to discuss his property investment goals.

He was looking to re-invest some money after the sale of his other BTL property and was keen to hear more about the areas I had recommended previously in the Clapham Property Blog. Great news of course. He was after a relatively “safe” investment as the properties should remain fairly liquid due to the imminent need to sell them to help fund his children’s ambition to become homeowners also. A great move. We compared properties close to the station (in this case a lot of Victorian properties near Brixton and Clapham Tube) and properties a little bit further out near Tulse Hill, Streatham Hill and Brixton Hill. He mentioned to me the children might just keep the properties and live there themselves, but it would have to be something a bit easier on the eye, a Victorian, as opposed to a flat in a block – these would likely be sold to fund something “nicer.” “Buying something nice will cost you in yield” I said. And he agreed that in most likeliness the children wouldn’t like the flats he bought regardless of what or where they were. 90% certainty of a sale in 5 years’ time. We compared these two properties to predict gains further down the line:

Linom Road – 1bed – Near Clapham and Brixton Stations – Asking price £425,000, est. rental 360pw = gross yield of 4.4%.

http://www.zoopla.co.uk/for-sale/details/36498200

Glanville Road – 1bed – Bit further from Clapham and Brixton stations – Asking price of £279,950, est rental of £320pw = gross yield of 5.9%.

http://www.zoopla.co.uk/for-sale/details/33716975

As you can see from the above figures the yield on the second property looks much more appetising. This combined with my professional experience that “more affordable” properties are always easier to let that something top of the range (or bottom of the range for that matter) you will most likely enjoy less voids. Truth of the matter is that everyone “wants” to be close to a station but when it comes down to getting their wallet out there are very few who will shell out a substantial premium for this. Numbers are increasingly attractive when you consider that the first property will require a deposit of 85k (20%) and even then it will not satisfy most lenders’ criteria that the rental income must be 125% of the monthly interest payment. Calculation as follows: rent of £360pw = £18,720 annually, so interest payment (calculated at 5% as this is lending criteria now) cannot exceed £14,976 annually or £1,248 monthly, which means that the maximum loan would be 299520, leaving Mr. Investor to pay a higher deposit. £125,480 in fact as opposed to the £56k required to purchase property number 2, which easily meets the 125% rule (loan of £244,000 x 5% = £11,200 per annum; the annual rent of £16,640 is 149% of this so will pass with flying colours).

This combined with equal or greater capital gains (you will know from my previous articles that SW2 had a 2% bigger capital gain over the past five years) then we are on to a winner, in cash flow, capital gains and so forth. The difference will be considerable as property number 2 leaves Mr. Investor to purchase more property, again with more gains to be had there. The difference is substantial in the amount of money required to invest (56k vs 125k), leaving the investor to purchase 2 properties and not 1 when he follows my advice. More investments, more yield, more gains, more eggs in more baskets. A sensible approach to investing.

So as always please feel free to drop me a line, call me or pop in to the office on Clapham Park Road. The coffee is always hot and the chair always comfortable. Let’s talk property!

Jeroen Hoppe

Director

XanderMatthew

The Next Big Thing?

Many buy-to-let investors would consider a 5% return exceptionally good, so what would you say to a property offering over 6%?  Such properties are exceptionally hard to find, especially in zone 2, but if you venture a little further away from the train and tube stations you’ll find your options start to open up.

Take this 1 bedroom ex-local flat just off Tulse Hill.  

http://www.zoopla.co.uk/for-sale/details/35671136?tmad=c&tmcampid=35&utm_campaign=buy-alert&utm_content=contact-type-listing&utm_medium=email&utm_source=alert#dQ1tRzY3Df87YkwD.97

Bus links up to Brixton are excellent meaning that commuting into central London is still a perfectly viable option and you get a lot more for your money than you would in the more traditional locations.  Admittedly this property needs a visit from the builders, but once renovated would fetch around £1050pcm giving a return of 6.3% at the asking price of just £200,000.

It’s well documented that parts of Lambeth have seen substantial price growth over the past 5 years, and many investors are now looking for the next big thing.  With the majority of first time buyers priced out of more central locations, we’re starting to see residential areas over ½ a mile from the tube deliver a similar level of price growth.

A similar flat sold in 2007 for £156,000 which means an increase of 28% in the 8 years to 2015.  This is nothing to write home about, but the real growth is yet to come.  This flat could quite easily be worth £240,000 in a year’s time, and £280,000 the year after that.

20% a year capital growth here is a very real possibility, and while you wait for your investment to go up in value, the 6% rental yield will do a good job of paying your mortgage!

Southwark Has All The Answers For Buy To Let Landlords.

This is a good deal for investors as it is a flat somebody can come along and transform to make it into a rental machine. Buy to let investors can expect to enjoy a cool 6.3% yield if it rents in the region of £320 per week which is great for a London property.

http://www.xandermatthew.com/printable.dtx?propertyid=28EC562E-9821-4505-A191-70C3EE15376B&fromwebdadi=true

Resale will be strong due to the growing interest in the area with the multibillion regeneration on Elephant and Castle nearby which of course will have a ripple effect on neighbouring areas. Southwark is an exciting borough to be involved in with good projected growth in coming years and already been confirmed as the number one borough that has built  the most new homes since 2012. Central London is a very short bus ride away too and ideal for the many that are opting to jump on their bikes to work.

You will find the likes of famous landmarks such as the Shard and Shakespeare Globe in Southwark so Amery house is amongst a healthy cultural background which is sure to grow in the future because of its closeness to central London.

If you are after any lettings or sales advice feel free to ring me in the office on 020 3397 2099 or pop in to the office on Clapham Park Road.