Thursday, 19 October 2017

My 5 Golden Rules to investing in Warrington.


As a Warrington landlord myself,  I thought I would share some of my rules/tips on finding the right investment property for you in Warrington and its surrounding areas.

Rule 1 -  LOCATION.  

My number 1 rule is invest in a town you know. What better town to invest in than the town you grew up in? Now you will know which areas are high in renters and which areas are high in home owners. You will know where the schools are, local shops and most importantly the commuter links.

Think about the sort of tenant you want to attract – if you are looking for professional tenants then you will need to look at properties which are close to bus/train stations in Warrington. The properties you tend to get close to the town centre are flats.  If you are a regular reader you will know I am not a fan of Flats as an investment strategy for many reasons!  

If you are looking to attract families then you may want to look at property that’s away from the hectic town life with noise and traffic etc and find somewhere which is close to shops, schools and parks.  

Warrington offers plenty of areas suitable for both, you have areas such as Padgate, Orford, Latchford to name a few and these locations are all great for rentals both Families and Professionals as town is not too far away but far enough from all the hustle and bustle.


Rule 2 - motivated sellers

Im not sure what you think of when you hear motivated seller but what pops into my mind is someone who will take a very low price for a quick sale. When I say low I mean anywhere between 10%-30% below market value.  Finding these motivated sellers is not easy, you can start by looking at how long a property has been on the market. Usually November seems to be a good time to negotiate the price down on a property as people want to be out and in their new home for Christmas. Another motivated seller is usually someone who has inherited the property.

Rule 3 – The figures.  

So we have established the sort of tenant you want, you now have the location and a list of motivated sellers. Now you need to make sure all this stacks up financially. At the end of the day you are in this to make money rather than breaking even or being in a loss. Make sure you do plenty of research on the sorts of rents your potential investment property can achieve – my advice is to give my team a call and pick our brains. We are local to Warrington and we are Warrington Landlords. Me and my team will be able to give you accurate numbers of the rents you can achieve in and around Warrington.  You will also need to set a buffer aside for unexpected expenses, usually this is general maintenance but we have had the odd boiler needing replacing which requires forward thinking.

From my experience with my own properties and properties I manage is when undertaking work. Often other issues arise which need sorting out and this will always add more time to the job and it usually means you will go over budget.  But if you do it correctly then you will have a sound solid investment.

Rule 4 – Not a get rich quick

The Warrington property market has gone up and down in the last 10 years and it’s very difficult to predict what the changes will be and if the prices will change.  As a Landlord in Warrington, think about the long goal. Use this as a plan for the future and the short term ups and downs will not affect you as much.

Rule 5 – Understand your market. 

This is similar to Rule 1 (location) however you can never do to much research, ring other landlords from Warrington, speak to several local agents. The independent agents can make instant decisions there and then as the owner of the business tends to be close by (you will always find me in the office). They are more likely to sit down and give you their time, even if it means they get no business from it they just love to talk all things property.


There you have it, my 5 top tips to investing in Warrington. If you are a seasoned landlord or you are just looking to start me and my team are always happy to chat about your goals and plans. We can point you in the right direction and even  accompany you on viewings so you have a second opinion.

If you find yourself passing our office then pop in (the kettle is always boiling). We have plenty of free parking available and I’ll even get the ‘posh’ biscuits out.

Our office address is based at 6, Bankside, Crosfield Street, WA1 1UP. Many of my blog readers also email me with RightMove , Zoopla or On The Market  links to look at and offer a second opinion so if that’s more convenient my email address is manoj@hamletwarrington.co.uk

Don't forget to visit the links below to view back dated deals and Warrington Property News.

Thursday, 12 October 2017

Moving from a 2 bed Warrington Property to a 4 bed will cost you £1,004 pm


Moving to a bigger home is something Warrington people with growing young families aspire to. Many people in two bedroom homes move to a three-bedroom home and some even make the jump to a four-bed home. Bigger homes, especially three-bed Warrington homes are much in demand and it can be a costly move.

If you live in Warrington in a two-bedroom property and wish to move to a four-bedroom house in Warrington, you would need to spend an additional £178,073 (or £723.05 pm in mortgage payments (based on the UK Bank average standard variable rate)). However, going straight to a four bed from a two-bed home is quite rare as most people jump from a two to three-bedroom home, then later in life, from a three to four-bedroom home.

So, after being asked my thoughts on moving home in Warrington by a friend recently, please find my analysis of the local property market and then some thoughts. To start with, let us see what the average property price is for a Warrington property by the number of bedrooms it has.

Average Property Price in Warrington by Bedroom
1 bed
2 bed
3 bed
4 bed
5 bed
£96,348
£131,505
£195,148
£385,902
£550,578


I then decided to calculate what it would cost to make the jump upmarket from one bedroom to two bedrooms, two to three bedrooms etc, etc, both in actual money and in mortgage payments (using the current standard variable rate of UK Banks of 4.74% - so the mortgage cost could be higher or lower depending on the mortgage taken).

Warrington
Price Difference to make the move
Cost per month to move up market (Mortgage)
1 bed to 2 bed
£35,157
 £138.87
2 bed to 3 bed
£63,643
 £251.39
2 bed to 4 bed
£254,397
 £1,004.87
3 bed to 4 bed
£190,754
 £753.48
4 bed to 5 bed
£164,676
 £650.47

There are some interesting jumps in costs when moving upmarket as a Warrington buyer. The cost of moving from one to two beds, and two to three beds is relatively reasonable, whilst the jump from three to four beds in Warrington is quite high and therefore financially prohibitive for most families. This helps provide a partial explanation as to why some four-bed properties are currently taking slightly longer to sell.

As an aside, there is a lesson here for all my blog readers. You can quite clearly see why the larger 4 and 5 bed properties don’t offer the best returns for buy to let. Simply put the monthly finance costs and rents achieved don’t match up so well (i.e. a mortgage for a 4 bed home in Warrington would cost you 97.75% compared to a 3 bed mortgage, but the jump in rent would be a lot less than that). I don’t wish to be dismissive about the solidity of investing in larger properties because it does depend on your circumstances. Four bedroom properties sometimes offer other advantages. Pick up the phone if you want to know what they are in more detail.

A further look at the stock of properties in Warrington is revealing.

Housing Stock in Warrington by Bedrooms
1 bed
2 bed
3 bed
4 bed
5 bed
5.31%
27.89%
38.91%
21.78%
6.11%


The most active purchasers are 20 and 30 something home-owning parents with growing families. Many look to more modern developments for the perfect balance of access to decent primary schools, commutability and lifestyle. For landlords looking to buy within Warrington, they face stiff competition from these 20/30 something families, making the three bedroom Warrington home massively in demand, often attracting spirited offers and selling within weeks of listing. This mix of homebuyers and landlords is a pressure point in the Warrington property market.  Again, if you are a landlord, call me and I will show you areas with decent returns where you aren’t in so much competition with young Warrington family homebuyers.

Yet, the cost of an additional bedroom can be too much for some Warrington buyers. It is quite challenging moving home the first time, but to then find you are priced out on the next move up the ladder can be quite disconcerting, with families often having to move to a different part of town to get the bigger home they need.

Nevertheless, that’s the position many homeowners find themselves in with the cost of the additional bedroom being too much to bear. To those buying their home for the first time, all I suggest is they not only consider the mortgage payments and other costs of their first home, but also do their homework into their next rung up the Warrington property ladder. Thinking about it now will keep you ahead of the game in the future; as your number of bedrooms, family property needs and lifestyle wants change.


..and Warrington landlords – well these changes in the way people live also mean there are opportunities to be had in the Warrington rental market. Many Warrington landlords are starting to pick my brain on this, so if you don’t want to miss out – drop me a line.

You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

Thursday, 5 October 2017

Warrington Property Market Review 2017

Time now for a quick round-up of what has been happening in the sales and lettings market in the Warrington area throughout July - September 2017. (Figures are obtained from Rightmove and do not include private lets.):


You can see from the rental figures above that it’s 1, 2, 3 and 4 beds that are most in demand – with 2 and 3 beds being the most popular by some margin. If we look back at this time last year, it was the 3 bedrooms that were the most popular with a total let of 44.4% followed by 4 bedrooms at 31.7%. 
Now if we look at the sales again we can see its 2 bedroom houses and 3 bedroom houses that are in front. Again if we go back to last year is was just 3 bedroom houses in a league of their own. 
So, as an investment, what should you buy?

Well, demand is there to rent anything up to 4 bedrooms, but there are already a high number of potential private purchasers chasing those same properties (3 bedroom houses), so this will inevitably increase pressure on availability and start to drive prices up. 2 beds are in a lot less demand by buyers, yet these are often prized by renters. Our experience here tells us that 2 beds will always find a rental market and they will always rent out quickly, but there will be more churn (turnover of tenants). These will command a slightly higher yield than 3 beds. 
charts


However, for families wishing to rent, 3 beds are a must. In the catchment area of great schools (particularly secondary), they will always be in high demand and with less churn. It is these properties that tend to offer better scope for capital growth in the long term, whilst providing a steady yield of around 7-10% in the Warrington property market today.

I like to keep an eye on the market every day, searching for the next hot Buy To Let deal. Remember this is not a get rich quick scheme. You are planning for the future.


If you are thinking of getting into the Warrington property market and don't know where to start, speak to us for impartial advice and guidance to get the best return on your investment. For more information about other potential investment properties that we could introduce you to, or to ask about our thoughts on your own investment choices, call us now on 01925 235 338 or pop along and speak to us in person at our office at 6 Bankside, Crosfield Street, you can always email me on manoj@hamletwarrington.co.uk