Thursday 27 August 2015

Why Are There So Few 'Flipping' Good Property Deals In Warrington?



A well established tactic for making short term gains from property investment is to buy a property then sell it on at a profit a short time later - a process known as 'Flipping'

I've been looking into recent sold prices in Warrington and I was quite surprised by just how few 'Flip' successes there look to have been in Warrington in recent years

When looking for 'Flips' you'd typically expect one sale to be followed by another within 6 - 18 months of the initial transaction, depending on the timescale to complete any improvement work required (and sometimes if there is a mortgage the lender may have penalties for cashing in or remortgaging in within 6 or 12 months)

So why have there been so few Flips in Warrington?

Warrington has seen pretty much static house price growth in recent years, and at £178,794 the average sold price in Warrington is still much lower than at the peak in 2008 when it was £239,210

This will make it harder to profitably Flip a property, certainly compared to doing so in the northwest where it is possible to make significant profits simply from the increase in value accrued during the few short months of the buying (and/or renovation) process!

In a market like Warrington that's not enjoying double digit house price growth the secret to profitable Flipping will be to buy well (typically a run down or dated property, or a distressed sale) and building in capital growth that beats the normal sluggish organic growth rates through the improvement works, or at the very least brings the property back to the 'normal' market value

It may be that with relatively low valued properties in Warrington, there just isn't the same scope for negotiating a big enough discount to fund the improvement works and then make a worthwhile profit

As an example, assuming a £70,000 purchase price, a healthy £15,000 budget for renovations and a final sale price of £100,000 leaves £15,000 profit? Or does it?

Naive investors often forget to factor in transaction costs (assumed to be 10% of the final sale price when buying and selling) and the holding costs (interim mortgage payments, insurances, loan interest etc) that can easily eat into the profit and mean investors can actually lose money!

This may suggest that to profitably Flip a property in Warrington investors, may need to look at higher value properties (where they are likely to make larger returns), which may make funding such a venture prohibitive or less attractive than other investment options

It may also be that given Warrington allows investors to get better-than-average monthly Yields, the majority of investors consider it better to get 6% - 8% Gross Yield over the medium to long term (and get a bit of capital growth into the bargain) rather a than make a one-off 10%-15% from a short term but risky Flip




Unfortunately what we see in Warrington is lots of 'Flops' - this is the opposite of a Flip where a property is sold at a much lower price than the previous transaction - Flatlining house prices don't help this but many Flops are distressed sales where personal circumstances, rather than market forces, dictate the sale and the sale price

But today's Flop could turn into a future Flip - if the most recent sale was significantly below the prevailing market price
It may be possible to make short term profits from Flipping in Warrington but the value of getting local expert advice can't be underestimated to ensure you buy the right property, in the right area, for the right price, along with carrying out detailed analysis of the likely returns and factor in all costs involved


If YOU want to be the first to know about what would make a great Buy To Let investment that is currently available either on the open market or via our own sources (landlord to landlord sales etc), call us now and get your name put on our Premier Investor list on 01925 235338 or send me an email on manoj@hamletwarrington.co.uk You can always visit us at our office 6 Bankside, Crosfield Street, Warrington.
If you enjoy reading my articles please visit the links below to view back dated issues. 






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Thursday 20 August 2015

1 Bed Flat Vs 2 Bed Flat in Warrington




Over the weekend I bumped into an old friend of mine whilst out shopping for some bits and bobs, He has noticed my Warrington Property Blog and started to explain that him and his wife have been toying with the idea to invest some money in property, they have decided to stick to flats as a strategy however they are not too sure whether to buy a 1 bedroom or a 2 bedroom flat.

I gave him some vague figures and numbers but invited him and his wife to our office for a proper chat, this gave me the time to really research the topic and give them a better idea of where to invest their money. 


The first question I asked them was what are they looking for from the investment - capital growth in the property or a great yield?

Answering this question will help you figure out which properties you should buy...The average asking price of a 1 bed flat in Warrington is £75,000 today compared to £110,000 for a 2 bed flat. The 1 bed flat achieves an average rental price of £425 per month compared to £575 per month for a two bed flat.

That’s a yield of 6.8% for the 1 bed against 6.2% for the 2 bed. So surely, the 1 bed flat is the better bet? Well it does offer a better rate of return, but the 2 bed semi is slightly easier to rent out (less void periods) and will be easier to sell in the future.
They are now allowing me to find the ideal investment property for them in Warrington – you may or may not know but I am here to give you my opinion good or bad, I will come along to viewings with you and sit down to really tighten the strategy to make sure you find the right investment property for yourself – remember this is not a house/flat you are living in and it should be a business decision. I charge absolutely nothing for this as we will make our money on finding you the right tenant and managing the property for years to come. 


So how will you rate our advice and our credibility? Start by talking to us, or come and meet us in person in our office at 6 Bankside Crosfield Street, Warrington to get a flavour of how we work and what we have to say. Email me on  manoj@hamletwarrington.co.uk Read our regular blog page which has weekly updates containing market commentary and industry insight. Ask around and see what people say about us. Google us. Find out all you can, because we have nothing to hide and everything to gain by winning your trust and ultimately your business. Our professional standards are high, and we would like you to find this out for yourself, because it is our reputation and business that is at stake if we get it wrong.


If you enjoy reading my articles please visit the links below to view back dated issues. 






#warrington #investments #property #warrington #landlords #buytolet #property-buy #capital-growth #investments #property #property-capital-growth #warrington  #letting-agent #lettings-agent #letting-agents #lettings-agents

Thursday 13 August 2015

The Tale of two towns - Warrington and Bolton



Earlier last week I popped into my local shop and the owner recognised me by my article in the Warrington Guardian which was about the quarter of Warrington residents never owning their own home. If you missed that article it can be found on the link below.
The owner of the shop then started explaining that he has money saved up ready to invest in property. We ended up having a chat about the Warrington property market and what he could achieve if he invested in Warrington, he then went on to ask me about how it would compare to Bolton, as this is the town he lives in.
I didn’t have the stats and numbers in front of me so I told I would do some research and then invite him to the office for a chat.
So should you be investing in Warrington or Bolton when it comes to property? Both towns are similar in size and, taking into account the surrounding villages, have similar average property values.
The average property value in Warrington is £105,000 and in Bolton is £70,000, whilst the average rents are miles apart at £725 per month in Warrington and £475 per month in Bolton. This gives both towns an almost identical average yield of 8%. I have done a little research to compare the two seemingly similar towns in more depth.

Investing in property is all about what you buy the property for. You make your money with your buying value, rather than your eventual sale value. Over the last four years, property values in Warrington have increased by 3%. This is great for those that have already bought a property in the town. When I looked at the property values in Bolton over this time, I found they have dropped by nearly 1.5%. This means, if you are considering buying now, Warrington would be the better town to invest in.

If YOU want to be the first to know about what would make a great Buy To Let investment that is currently available either on the open market or via our own sources (landlord to landlord sales etc), call us now and get your name put on our Premier Investor list on 01925 235338 or send me an email on manoj@hamletwarrington.co.uk You can always visit us at our office 6 Bankside, Crosfield Street, Warrington.
If you enjoy reading my articles please visit the links below to view back dated issues. 






#warrington #investments #property #warrington #landlords #buytolet #property-buy #capital-growth #investments #property #property-capital-growth #warrington  #letting-agent #lettings-agent #letting-agents #lettings-agents