Out of London Locations

We buy properties, increasingly at auction, in different locations throughout the UK, some of which are mentioned below, and the number of locations is increasing, as we recruit more Investor Consultants.

We do not buy in locations where there are evidently substantial numbers of rented properties, (50%+) as those locations can decline resulting in property values not being maintained.

All of the following areas currently have a shortage of quality rented property coupled with a good first time buyer market, which should give rise to at least the maintenance of current property values, if not an increase over time.

Further, all these locations have good local shopping and leisure facilities plus excellent public transport links to the nearest major conurbations.

TENANT PROFILE

Our target tenant is a family, including single parents, in receipt of Housing Benefit. In the locations where we buy there is a high number of HB tenants. Generally the properties offered to HB tenants are low quality in bad/depressed areas.

By making quality properties available we attract good tenants, who are prepared to look after the properties and stay as tenants for some considerable time.

Many tenants are on long-term benefit but even those who manage to find employment whether permanent, temporary or part time continue on as tenants in our properties.

In many cases the tenants are prepared to pay a small amount (£ 5-10 pw) on top of the rent that is paid by the Housing Benefit Office.

Whilst there is a higher perceived risk of rent arrears and malicious damage our experience indicates that the risks are no higher than other categories of tenants who are perceived to be more responsible.

The higher risk, if correct, is mitigated by the number of properties held in any one portfolio.

We would not advise an investor to buy one or two such properties but to develop a portfolio of at least 10 to 15 properties.

PROPERTY PROFILE

In the majority of cases the properties are freehold 2 & 3 bedroom terraced houses in good locations, often close to new-build, with a high level (60%+) of owner occupiers in the same street that were originally built for the local workforce.

The layout of the properties varies dependent on the location, but cater for the same category of tenant and are becoming increasingly attractive to first time buyers, as they are often more spacious and built to last.

In County Durham the properties are typically terraced with a small yard to the rear and were originally built for the local miners. The same applies to South Wales, where the majority of the properties are located in the valleys north of the M4.

Similar properties can be found in the Hull & Grimbsy area, which were originally built to house the workforce associated with the fishing industry.

In the Halifax & Huddersfield area, (M60 corridor) the properties are generally what are called "back-to-backs" where the terrace in one street backs on to the terrace in the next street with a common rear wall to each property and a small front yard. These properties were originally built to house mill workers.

In all cases the properties were built out of local materials, generally stone, without modern sanitation and have been extended to either incorporate a kitchen & bathroom on the ground floor or just a bathroom at the rear, where there was originally an extension for a kitchen.

1 st floor bathrooms are not expected, though if the property lends itself to installing a bathroom on the 1 st floor, it becomes a more attractive letting & selling proposition but not at the expense of sacrificing a bedroom.

Most require a complete refit including rewiring, central heating, new kitchen & bathroom with shower and the installation of Upvc double glazed windows.

The cost of the refit is between £ 10 & 15k depending on the condition at purchase.

PRICES & RENTS

Prices & rents vary little across the locations in which we invest and the potential for capital growth and rent increases are similar.

Typical prices that we pay before refit are;

2 bed £ 28/40k.

3 bed £ 30/45k.

With post refit valuations between £ 50 & 80k.

Average weekly rents are £ 75/85 pw.