During our ‘Official Opening’ a couple of weeks ago where the Mayor of Margate kindly cut the ribbon on our shiny new office, I was chatting to a developer who has a very large portfolio of property throughout Thanet. We were chatting about the local towns and how Margate had seen an upturn in fortunes and had a ‘feel good’ factor to it. He informed me that he was no longer actively looking to invest in property because sale prices had risen yet rental prices were largely staying the same. Meaning he wasn’t getting the sort of yields he was after, and since he had no intention of selling or leveraging, capital growth didn’t have much of a hold on him.
I agreed with him to a certain extent that prices had risen and yields weren’t increasing like an investor would like, but only to those who weren’t actively looking. For instance, we recently had a Landlady who has only two properties, one she lives in and one she has recently bought as a pension fund if you like. So she is hardly a professional landlord.
We sat down with her back in February and together kept our eyes on the markets looking for something that would suit her needs, bring her steady income from a reliable tenant whilst also providing potential for significant capital growth.
We found her a property in Church Street in Margate. A 3 bedroom mid terrace, she bought it for £95,000. We have just let this property to a very reliable tenant who has not defaulted on rent for at least 11 years. We let it for £675 pcm. Giving a gross yield of 8.5%! Not bad! The property next door sold for £93,000 back in February this year. It sold back in 2000 for £48,500. So over the 14 years it has increased in value by over 91%. Therefore we managed to find her exactly what she is after. Admittedly it isn’t always possible, but if you are not actively seeking then you will not find.
So to summarise, yes the property market may be at a stage where it isn’t throwing out fantastic bargain after fantastic bargain, but there are some real gems out there. Be patient, speak to specialists, and be ready to pounce when you find it.
If you would like any help at all in finding your next investment then please come and see us, our office is along Northdown road. We look forward to meeting with you.
