BUY-TO-LET DEAL OF THE WEEK: 2 bed flat in Chichester, £185,000, 6.5% yield

Summary

2 bed flat in Chichester

Listed for sale on 11/10/24 @ £185,000

Rent = £1,000pcm

Yield = 6.5%

The property is on the market with White & Brooks and full details can be found on Rightmove via the following link: www.rightmove.co.uk/properties/153649895

---

Five tips to avoid ‘nightmare tenants’

Most tenants simply want to live in peace in a home that they can treat as their own, whilst happily paying the going rate to do so. A very small percentage, however, will set out to either mistreat the property or purposely not pay the rent. Here are five tips to avoid these so-called ‘nightmare tenants’:

1. Offer tenants a nice home

If you offer a neglected property in poor condition, you are likely to attract less interest and will have to settle for tenants who are perhaps unable to secure a ‘nicer’ home. Meanwhile, if the property is well-presented, it will attract a wider pool of tenants to choose from and they will most likely take pride in keeping it in good condition. 

This applies to ongoing maintenance issues too; afterall, if you don’t care about the property, why should your tenants? Furthermore, tenants will feel aggrieved paying full rent for a property that isn’t fully-functional or being maintained as it should be. 

2. Match the property to the right tenants

It’s hard to say no sometimes, but a property needs to suit its occupants. For example, most blocks of flats won’t accept pets as it is part of the head lease. This isn’t unreasonable if you think about trying to live with a dog in a small second-floor flat with no access to outside space and with neighbours on all sides of you. It might also be unwise to allow two adults and three children to rent a two-bedroom flat; they simply need more space and amenities than that to live comfortably and to be able to keep the property in good order.

3. Reference thoroughly

This is probably the most critical step in ensuring you avoid ‘nightmare tenants’. Helpfully, referencing is something that prospective tenants with something to hide will try to avoid. Do not take shortcuts because a tenant wants to let the property quickly, can offer monies upfront or because a ‘friend of a friend’ says they’re “good for the rent”. Genuine tenants won’t quibble about you undertaking credit checks and asking for documentation, such as payslips and bank statements, so as to give you a full picture of their financial standing and rental history.

Furthermore, (and similar to point 2) you aren’t doing someone any favours in allowing them to commit to a rental property that is simply too expensive for them in the first place.

4. Ensure all the paperwork is in place

Tenancy agreements should contain clauses relating to sub-letting, noise, pets and other common do’s and don’ts, which will help avoid conflicts later on (and can become grounds for eviction if they are ignored). A detailed inventory, including photos, not only serves as a record if there is a dispute over the deposit at the end of the tenancy, but acts as a deterrent in the first place (as the recording is so detailed) and a guide for tenants at the end of tenancy (so they can check how the property should be left so as to receive their deposit back).

Ensuring all the paperwork is completed and provided to the tenants in the correct manner will also avoid problems later on. For example, if not served correctly, you open yourself up to fines, compensation claims and difficulty in progressing eviction notices if necessary; all of which a ‘nightmare tenant’ could use against you.

5. Keep in touch

Maintaining an open dialogue with tenants and responding to tenancy-related and maintenance queries promptly will encourage a good relationship. Visiting the property regularly will allow you to spot problems early, as well as checking all is ok with the tenants so as to maintain and prolong their tenancy. It also shows you are pro-active and haven’t just ‘left them to it’; tenants are more likely to take liberties with absent landlords. 

There are many other ways to minimise the risk of letting your property to problematic tenants, some of which are quite subtle and come via experience. Ultimately there is no fool proof way to avoid a ‘nightmare tenant’, although these five tips will go a long way to avoid those who seek to enter a tenancy agreement with bad intentions from the outset.

---

BUY-TO-LET DEAL OF THE WEEK: 2 bed house in Chichester, £265,000, 5.0% yield

Summary

2 bed house in Chichester

Listed for sale on 12/09/24 @ £275,000

Now = £265,000

Rent = £1,100pcm

Yield = 5.0%

The property is on the market with Bell & Blake and full details can be found on Rightmove via the following link: www.rightmove.co.uk/properties/152349404

---

How much does a bedroom cost in Chichester?

Many first-time buyers will start out with a small ‘starter’ home, which is both suited to their needs and matches their modest earnings at the beginning of their careers. But as you get older there’s a tendency for extra possessions to pile up and for extra people to emerge in your life! This made me think; how much is a bedroom in Chichester and how much does it cost to climb the property ladder?

Let’s start with a one-bedroom property (typically a flat). The average price for one of these in Chichester is £200,000. As many will appreciate, the first step is often the hardest and that’s no exception when it comes to buying a property. The income and deposit you’ll require to afford even the most modest of homes in Chichester is probably the greatest barrier to getting on the property market.

Once you do though, and you hopefully rise through the ranks in your chosen career whilst growing your nest, the increase in price to afford an extra bedroom becomes a little easier at each rung of the ladder (in percentage terms).

The average two-bedroom property in Chichester will cost you £320,000 - a premium of £120,000 (60%) compared to a one-bedroom home.

The average three-bedroom property in Chichester will cost you £450,000 - a premium of £130,000 (41%) compared to a two-bedroom home.

The average four-bedroom property in Chichester will cost you £625,000 - a premium of £175,000 (39%) compared to a three-bedroom home.

Of course, this price increase isn’t just for an extra ‘bedroom’. As the number of bedrooms grow, so should the size of the other rooms throughout the house, as well as the outside space and amenities e.g. garden/garage/driveway.

It does however demonstrate that it’s the first couple of steps that are the toughest on the property ladder, which is why it’s common that government policies and incentives focus primarily on first-time buyers. Having said that, bear in mind that the need for an additional bedroom affects the ‘upsizers’ at a time when the financial strain (a new child being the most common) is often at its greatest.

---

BUY-TO-LET DEAL OF THE WEEK: 2 bed house in Chichester, £300,000, 5.0% yield

Summary

2 bed house in Chichester

Listed for sale on 08/08/24 @ £315,000

Now = £300,000

Rent = £1,250pcm

Yield = 5.0%

Last sold for £250,000 in February 2020 (+20% in 4 years)

The property is on the market with White & Brooks and full details can be found on Rightmove via the following link: www.rightmove.co.uk/properties/151118822

---

Buy-to-let: home or away

Opinions are divided over whether you should invest in buy-to-let locally or venture further afield in an attempt to achieve better returns.

The area you invest in should be considered alongside your strategy and goals. Certainly if you’re looking to invest in student lets you’ll want to buy near a large, vibrant and growing University. Budget may also be a factor, whereby local house prices are simply too high for you to buy an appropriate property. Many Londoners have to buy outside the city because of this, although many will now rue missing out on the spectacular capital growth London property has seen.

When I began investing in property I spent a long time deliberating on where I should buy. Trying to find the next up and coming area to invest in that offered the holy grail of high yields and strong future capital growth appeared elusive. In the property boom years I researched city centre apartments up North as well as foreign property in Bulgaria, Cyprus, Florida and Las Vegas.

Whilst the glossy brochures promised quick riches, ultimately I decided that the grass wasn’t actually greener elsewhere. There are in fact many reasons why I believe you should keep it simple and invest close to home.

Familiarity is often the biggest reason why many landlords buy locally. You’ll know where the best areas are, which are the decent schools and the good transport links, along with a knowledge of the upcoming developments that will impact the area. 

You could spend time walking the streets and meeting with local agents. Nothing beats face-to-face contact and building rapport with people who can advise and support you. It’s easier to spend more time in a local area so you can work out the facts as opposed to relying on third party information.

It is obviously far more convenient to manage a buy-to-let close to home. Whether that be overseeing a refurbishment, the on-going maintenance or managing tenants. Having a property nearby saves a lot of time and this is perhaps why over 50% of landlords choose to buy within 10 miles of where they live.

Buying locally might mean you decide to self-manage the property and therefore save yourself the letting agent’s management fees. Even if you do hand the keys over to an agent, there’s certainly some peace of mind knowing the property is within easy reach should something go wrong or you simply want to keep an eye on things.

If you’re thinking of investing in buy-to-let and would like some free advice about whether your local area can meet your needs, please get in touch.

---

This article was featured in...

---

BUY-TO-LET DEAL OF THE WEEK: 3 bed house in Chichester, £395,000, 4.9% yield

Summary

3 bed house in Chichester

Listed for sale on 01/05/24 @ £500,000

Now = £395,000

Rent = £1,600pcm

Yield = 4.9%

The property is on the market with Purplebricks and full details can be found on Rightmove via the following link: www.rightmove.co.uk/properties/147512519

---