Don't buy a lemon in Chichester

The dust has settled from the election and there’s (a little) more certainty as to the future for housing policy. Many have been waiting for this before poking their heads above the parapet and committing to purchasing a property.

One particular group who have been keeping their powder dry have been those benefiting from April’s pension reforms. This ‘revolution’ means you no longer have to take an annuity and can instead access all of your pension and invest it how you want.

For many, as it is tangible and has an excellent track record, property is the go-to choice for improving their returns compared to keeping their money in the bank or handing it over to a fund manager.

It therefore irks me somewhat that a large number of people may be wandering into the hands of misleading salespeople. Be it those with illustrious schemes promising instant riches or an estate agent who just happens to have the ‘perfect’ buy-to-let in their shop window.

Many estate agents will of course advise you that the property on their books is £10,000 more than the exact same one around the corner on with ‘that other agent’. They won’t pressure you into using their solicitor, their mortgage advisor and indeed their letting service, if some or all of those things aren’t actually in your best interests. They certainly wouldn’t bother showing you that property they’ve been unable to sell because it’s overpriced. Would they?

A couple of first-time landlords came to me recently, wondering if the £250,000 two-bed apartment in Chichester they were recommended by an estate agent really was as great as they’d been told. I informed them that it would rent for around £850pcm, much the same as a two bed house on Arundel Park……which you can buy for £220,000. So that’s £30,000 less to generate a better monthly income when you consider the apartment’s annual ground rent and service charges.

Another landlord I spoke to last week was buying a three bed house in his village as he was told (by the local agent) it’s good to buy near to where you live. I certainly agree with the sentiment…but not if that means buying in a village where there’s only one rental property on the market! It doesn’t exactly show a strong demand from tenants does it?

Here are a few quick tips when investing in property:

·        Check nearby comparable properties for asking prices, sold prices and rents.

·        Use this as a guide to the achievable rent. Use this to calculate and compare yields (annual rent divided by purchase price).

·        Consider the additional costs of leasehold property i.e. ground rent and service charges.

·        Check rental demand by seeing how many properties are ‘to let’ nearby and which have been ‘let agreed’.

Have you seen a property which you’re interested in buying as a buy-to-let? Why not drop me the details at clive@crjlettings.co.uk and I’ll give you my honest and impartial opinion. You can also contact me to receive my ‘buy-to-let deal of the week’ updates.  

(This article was featured in the Chichester Observer's property section on 14th May 2015) 

Clive Janes, CRJ Lettings Chichester, www.crjlettings.co.uk

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If you are looking for an agent that is well-established, professional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.

E-mail me on clive@crjlettings.co.uk or call 01243 624 599.

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