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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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. 

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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.

Click here to view Warrington Guardian Article

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. 

Facebook, https://www.facebook.com/hamlethomeswarrington

Twitter,https://twitter.com/HHWarrington

Website,http://www.hamlethomeswarrington.co.uk/

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

Is cash king in the world of property investment in Warrington?

Many property investors are struggling right now in Warrington - trying to find the bargains out there in a rising market is an increasing difficult task, made all the harder by some of the obstacles being thrown up in front of them by estate agents who are not playing by the rules and restricting market access to cash buyers, but why would this be?

Go back a step and imagine yourself as a vendor – the estate agent you appoint to sell your property has a legal obligation to act in your best interest, and to pass on any and all offers to you for your own consideration, albeit they will be able to advise you of the relative strengths or weaknesses of individual offers such as the length of chain they bring, are the buyers financially qualified and how quickly then can proceed to completion. But what if, and we are hearing more and more reports of this, the estate agent is actually working in their own best interests first and foremost, by not passing on ALL offers because they can make more commission by trying to sell your house to a family who require many more of their (fee earning) services, such as a mortgage, life insurance, indemnity insurance, a home survey, buildings insurance and so on? Sometimes the highest price offered is not the best deal on the table when you consider all of the intangible elements involved such as timeframes, external complications and the overall ease of the transaction.

We are finding that many cash investors are hitting a ‘glass wall’ which they cannot pass through, as they are not in need of the extras that many agents need to sell to hit their targets, and as a result they are actively being prevented from having their offer passed forward to the vendor. If this has happened to you, I would suggest putting your offer in writing direct to the vendor and let them and the agent sort out the resulting conflict, after all, it is also the vendor that is being inconvenienced by such action.

There are a few agents around who actively market properties for sale to potential landlords & investors, so at least some of them are being proactive in serving such a market, and they also understand that those buyers approach any deal differently to a retail buyer looking for a home of their own. What an investment buyer would need to be aware of is that estate agents selling a property often over exaggerate the potential rental income in order to make the figures appear more attractive to investors, and one way we can help combat this is to assess the potential purchase and give our fair and unbiased assessment of its potential to meet your investment criteria.

Another area to examine carefully is the ongoing cost from any managing letting agent, as costs can and do vary by quite some margin – we are talking about your fees as a landlord and the fees charged to tenants at the beginning and throughout the life of the tenancy, because although you won’t be paying the tenant fees, it could have a considerable impact on your ability to let and re-let a property if tenants feel they are being over charged for the right to apply, or worse still being forced to pay to re-apply for a tenancy renewal of what they consider to be their home. It is action such as this which leads to ‘churn’ or the turnover of tenants on a regular and costly basis.

So how should you combat this and make sure you as an investor are treated equally? Well you can first of all insist upon being present whilst the agent contacts the vendor, and then remind them of their obligation to put forward your every offer. Tell them that if they won’t, you will submit it in writing yourself (you can find their address on the land registry website for a few pounds). You can also seek out those agents willing to work with cash rich buyers, and for agents undecided about which side of the fence to fall onto you can educate them as to the value of your proposed deal, in terms of the uncomplicated position and speed you can bring to the transaction, and who wouldn't want that?

Here at Hamlet Warrington, we don't just take on new properties and let them out, we go back a stage or two and look to work with potential investors at the start of their journey and stay with them right through to letting & managing their new property, and we can help guide investors through the minefields and show them the tricks to get the best property in the first place (including accompanied viewings if you wish), because once you do this, the rest should be child’s play.

The cost for all this? Absolutely nothing. The value to you though – immeasurable.

To find out how valuable a partner we could be, visit us now at our offices on 

6 Bankside, Crosfield Street, Warrington, WA1 1UP, or you can email me 

Manoj Patel on manoj@hamletwarrington.co.uk





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How to serve a section 21 correctly in Warrington

Good afternoon, hope everyone has had a busy productive week. Ok so this is a question we at Hamlet Warrington get asked time and time ago. ''how do I serve a section 21 correctly?'' this is usually asked by landlords who are managing their portfolio themselves and are having trouble with a difficult tenant or they are looking to sell their property.

We here at Hamlet Warrington have the experience of issuing a S21 correctly without problems or without having it refused in court.

Section 21 gives a mandatory right to possession and landlords do not need to give a reason for requiring possession.

The only way tenants can successfully challenge an s21 possession claim is if the landlord, agent or solicitor has made a technical error in the application and the pre-application rules have not been followed correctly. For example, if you serve a section 21 notice when the deposit has not been protected, the s21 notice would be invalid.

Some important points to remember before serving a section 21 notice:

1. Make sure you have a written tenancy agreement which spells out the contract terms of the tenancy, including the length of the term, any break terms*, the rent amount and when this is payable.

2. Read the agreement carefully to make sure you comply with the all its terms, for example, using approved methods of validly serving notices, tenancy end dates etc.

3. The section 21 notice can be served at any time during the tenancy but NOT before the tenancy agreement has been signed.

4. If you have taken a deposit, the deposit must be protected** (within 30 days of receiving it) and the prescribed deposit protection information (s213 notice) served on the tenant as per s213 of the 2004 Housing Act (as amended by the Localism Act 2011) BEFORE a valid s21 notice can be served.

5. Download the prescribed information from whichever deposit protection agency’s website you signed up with, and serve it on your tenant within 30 days, making sure you receive PROOF of SERVICE.

6. Where the rental property comes under the remit of a licensable House in Multiple Occupancy (HMO), you must have complied fully with the Housing Act 2004 legislation regarding licencing of an HMO, and provide documentary evidence when applying to the court for a possession order.

7. Where the tenancy is a statutory periodic tenancy, the s21 notice comes under section 21(4)(a) of the Housing Act 1988. In this case the notice expiry date should be the last day of a tenancy period which is a minimum of 2 months from the date of service. These notices should include a saving clause (Lower Street Properties v. Jones (1996), Elias v. Spencer (2010) and Spencer v. Taylor (2013), where the notice states the expiry date, and words to this effect: “or after the end of the period of your tenancy which will end next after the expiration of 2 months from the service upon you of this notice”. This has been held on appeal to mend a notice with an incorrect end date.

8. The Accelerated Possession process (Form N5b) does not normally require a court hearing. The whole process will be completed by the court (judge) assessing the documentation you present. If all is in order a possession order will be made. If there are other complications, such as a missing letting agreement, then you will need to use the Standard Procedure (Form N5). This will require a court hearing. The standard procedure may take longer but it has the advantage that you can add a money claim if necessary.

*Any notice served under a break clause in the tenancy must comply with section 21 (1)(b) of the Housing Act 1988 AND the provisions of the break clause in the tenancy. Courts will always interpret the terms of a break clause very strictly.

**If the deposit has not been protected within the 30 day period you cannot serve a valid s21 notice unless you REFUND your tenant’s deposit. Likewise, if the prescribed information (s213 HA2004) has not been served on time then a valid section 21 notice cannot be served until the information is served correctly. (Complying late will not avoid you being liable to a fine).

Check List – Serving a Valid s21 Notice:

1 – Complied with the terms of the tenancy agreement and s21 of the Housing Act 1988 when serving s21.

2 – Complied with the deposit protection rules – s213 Housing Act 2004

3 – Obtained proof of service of deposit notice and s21 notice

4 – Complied fully with the HMO licencing requirements Housing Act 2004

5 – Where the notice is served under a break clause, make sure the terms of the clause and s21 provisions are fully complied with.

6 – Allow ample time for the 2 months’ notice to expire before applying to court for a possession order. Two months is the minimum notice period, there is no maximum.

7- When applying to the court for a possession order, make sure you provided three copies of all the documentation needed:
• Tenancy agreement
• S21 notice with proof of service
• Deposit documentation with proof of service of 213 notice.
• HMO licence details, if appropriate

8 – Apply for a possession order at the court near the property or online at: https://www.possessionclaim.gov.uk/pcol/ All court guidance, forms and documents can be found here: http://www.justice.gov.uk

Processing a possession claim is not difficult, and you do not need legal training. It just requires due diligence – some homework on your part and careful attention to detail. This is a 3 stage process which may or may not need all three stages:

1 Serving notice
2 Applying for a possession order
3 Applying for a warrant of possession – court bailiff evicts.

As always me and my colleagues are always willing to help and guide you with this process you can contact me Manoj Patel on manoj@hamletwarrington.co.uk or call on 01925 235 338. Better still if you have any concerns and would rather speak to me in person before you take the step of serving a section 21 then pop into my office, we are based at 6 Bankside, Crosfield St, Warrington, WA1 1UP plenty of parking available outside the office.






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Do Apartments in WA5 make good investments for Buy to Let?

I was talking to a potential landlord who lives in Appleton the other day. She wants to purchase her first Buy to Let property and has noticed our rental index and previous articles, so was interested in getting to know the industry a little bit more. She had also noticed that quite a few apartments are coming up for sale in the WA5 area at quite reasonable prices in comparison to some areas of Warrington.

She wants to try and get a property with quite a good return on her investment, as it’s not really doing anything in the bank. She had noticed on The Warrington Property Blog, that some of the apartments in the WA5 area get quite a good yield, so I thought I would look into this in a bit more detail for her. This is what I found.

In the last year, 97 apartments have been sold in the WA5 area, 73 of these were two bedroom apartments, selling for an average price of £112,472. Two bedroom apartments in this area rent on average for £600, which could produce a fantastic 6.4% annual yield. The remaining 24 sales were one bedroom apartments with an average selling price of £89,268. The one bedroom apartments in this area have an average rental price of £450, which can produce an almost equally good yield of 6.0%.

However, this isn’t the full story. The reason that the selling prices in WA5 are quite reasonable is due to the fact that many of the apartments have short leases, due to being built in the 1960’s/1970’s. This can restrict the way you purchase the property as some mortgage lenders won’t lend, or the interest rates will be quite high if the lease is less than 70 years.

Leases can be extended though and can cost around £12000 to do (depending on leasehold company). If you are buying the property to let though, you won’t necessarily have to worry about extending the lease straight away as the plan normally is to keep the property for a few years. Rent it out for 5-10 years, and then when you are looking to sell, renew the lease at that stage. This means you can ask for top money, as the property will have a brand new extended lease.

Property values for 2 bedroom apartments in WA5, Warrington have risen on average by around 10% in the last 5 years, which is below the Warrington average of 17%. But this is one of those classic examples of ‘What is more important, high yield or capital growth?’

With potential annual yields in the high 6.0% - 6.4% bracket, this area is great for the quick investor.

I am always giving advice to my existing and new landlords in Warrington on what to buy (or not as the case may be). Having this detail of information at my fingertips, allows me to spot trends in the local market, which then enables me to give the very best advice to my clients. 

I don't charge for that advice as I have plenty of opportunity to earn money by finding the best tenants for my landlords in the years to come, so if you would like some advice about buying to let, whether you are a landlord with an existing portfolio or someone thinking of investing in the Warrington rental market for the first time, please email me Manoj Patel on Manoj@hamletwarrington.co.uk or pop into our office on 6 Bankside, Crosfield Street, Warrington, WA1 1UP

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

Facebook, https://www.facebook.com/hamlethomeswarrington

Twitter,https://twitter.com/HHWarrington

Website,http://www.hamlethomeswarrington.co.uk/

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

Fixer Up Gem on Wellfield Street Warrington £65k

CLICK TO VIEW THIS PROPERTY

Good Afternoon folks.. I have just sported a great BTL deal on Wellfield Street. In the past I have compared Wellfield Street to other streets in Warrington. It has always proven strong in the rental market and the street has given a lot of our investors and landlords great tenants and great yields.

Now I tend to look for deals that are pretty straight forward however sometimes to achieve them big yields you need to get your hands a little dirty and find a fixer up. I can comment on the internals on this property however going off the guide price and the fact the Agent is not sharing any internal images - worse case scenario is around £15k where a full refurb will be needed this will mean taking back to brick and starting again (electrics, central heating, new bathroom, kitchen etc)

Going in and giving an offer at around £60k means with the refurb costs of lets say worse case £15k means you are walking away with around a 7.9% yield as the going rate for a 2 bedroom property in that area to let is around £495 however it will be newly refurbished and the right tenant will potentially pay a little bit more.

Now we at Hamlet Warrington have worked with investors on projects like this so if this is something you are interested in and want to get an idea of time scale and cost or would like me to pop along on the viewing to get a second opinion then please do not hesitate to contact me Manoj Patel by email manoj@hamletwarrington.co.uk or you can give me a call on 01925 235 338 failing that feel free to pop into the office at 6 Bankside, Crosfield Street, Warrington. WA1 1UP me and my colleagues will be happy to discuss this one with you. 






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