In a recent article I talked about the house price rises
since the millennium of 128%. This data was gathered from land registry but it
sounds like a huge figure when you compare it to the rise in the stock market
being 5.54% over the same time period!
Looking back at the first Buy to Let seminar my father ran
in 1999 I found some really interesting paperwork. At the time he was advising
that landlords invest in 2/3 bed properties with parking and gas central
heating – still relevant today.
What really surprised me was the value of
properties he recommended potential investors should be buying - £40 - £46 k!!!
The folder included a few pages from the Melton Times, 28th January
1999. It felt like looking back in time and sure enough – Baldocks Lane, 3 bed
semi £47,950; Thorpe Road, 2 Bed terrace £34,950.
At that time the phrase ‘Buy to let’ was not commonly used
and the attitude towards tenants was changing to reflect that renting was becoming
more of a choice and socially acceptable. The new investment landlords were
realising tenants letting a well presented property are much more likely to look
after the property.
Since 1999 Landlords began to see this option of a buy to
let as part of their pension plans, looking forward 20 years when the mortgage
could be paid off and they would still receive an income. For those lucky
investors who sought my father’s advice at the time they have also seen large
increases in the capital value of their investment properties.
Remember these properties may have required renovation, new
kitchens, and bathrooms during the last 17 years and there are costs to having
a buy to let investment such as insurance, tax to pay, agents fees, safety
checks and ongoing maintenance.
Will we see this level of increase over the next 16 years?
Probably not but I bet they will continue to outperform the stock markets.
For buy to let landlords in Melton Mowbray it has always
been about a safe investment, in a building you can see is in a good area, that
you can understand when a repair or renovation is required – unlike the complex
stocks and shares or hedge funds.
Melton Mowbray landlords usually look towards the long term,
low voids and long term tenants so finding the right property in the right area
is Key. If you were investing in a property in Melton Mowbray you should be
prepared for yields after costs of around 4% per year and look at the long term
capital growth. Investing in an area you are familiar with or an area that has
an established good reputation will give an investor confidence in a property
purchase.
Do your research,
understand the type of tenants in Melton Mowbray and cater for their needs and
you will reduce the time it takes to let a property and the number of empty
periods.
If you are considering investing in a property please keep reading my blog where I look at properties for sale across the market and give
honest opinion on their potential rental returns.
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