CASE STUD­IES: WHAT DO TO­DAY’S IN­VEST­MENT BUY­ERS THINK IS HOT PROP­ERTY?

Yorkshire Post - Property - - PROPERTY -

Gra­ham Bates runs Bates In­vest­ment Ser­vices with his sis­ter He­len and they have a port­fo­lio of around 90 prop­er­ties in and around Leeds.

He says: “I’ve just bought a re­pos­ses­sion be­cause it was too good an op­por­tu­nity to miss. It cost £147,000 a cou­ple of years ago. I bought it for £80,000 and it is worth £125,000.

Those kind of bar­gains are few and far be­tween.

In gen­eral we’re sell­ing stock that doesn’t fit our long term plan and we’ve started buy­ing new fam­ily-sized homes.

Fam­ily hous­ing is where we think the growth will be in the next seven years. There’s a lot of rental de­mand and not enough sup­ply.

A lot of house builders are of­fer­ing dis­counts and there are deals to be done if you of­fer to buy 10 rather than just one.

We’re looking at at­tract­ing young cou­ples and young fam­i­lies be­cause they tend to have a longer oc­cu­pancy, so they’ll stay at least 12 months and pos­si­bly up to three years.

De­mand is go­ing to grow in this sec­tor be­cause peo­ple can’t af­ford to buy in that bracket but they do want to rent a qual­ity home.

I can’t see a big fu­ture for tart­ing up an old ter­raced house with a few bits from Ikea.

The good thing about buy­ing new houses is that they’re go­ing to be main­te­nance free for the first three years or so.

We in­vest in Leeds, which is the area we know, and we also like to buy near rail­way sta­tions that have ac­cess into the city cen­tre.”

Rod Bloor and part­ner Kerry Dob­son are land­lords in Don­caster.

One of the area’s big­gest land­lords in busi­ness since 1989, they have a wide range of prop­er­ties from a £500,000 lux­ury let to ter­raced and shared houses.

Rod, who was the first land­lord in Don­caster to get a Houses in Mul­ti­ple Oc­cu­pa­tion (HMO) li­cence, says: “We didn’t buy any­thing for 18 months be­cause the banks weren’t lend­ing but I wanted to. There have been some re­ally good buys.

“In the end I had sur­vey­ors to value our whole port­fo­lio, which came out at about 60 per cent loan to value so I could prove we were a very safe bet.

“Since Septem­ber last year I have bought three ter­raced houses and a HMO with 12 flats, which was a very good bar­gain.

“I’ve also got a 17 bed­room HMO, which tends to be filled with re­fer­rals from the Don­caster Hous­ing for Young Peo­ple or­gan­i­sa­tion.

“It’s a bril­liant or­gan­i­sa­tion and Kerry and I are pas­sion­ate about of­fer­ing a safe en­vi­ron­ment for un­der-25s. Some of their sto­ries are very sad.

“That part of the rental mar­ket is un­der-sup­plied be­cause land­lords see it as high risk.

“But if you help your ten­ants or­gan­ise the hous­ing ben­e­fits or get work sorted, run a tight ship, look af­ter them and of­fer low rents it works. I’ve had some nice suc­cess sto­ries.”

HMOs, he says, of­fer big re­wards though they are labour in­ten­sive and you have to be very hands on.

“You need to be an ex­pe­ri­enced land­lord to take one on and you need to be there and get to know every­one per­son­ally.

“At one time banks would not touch them but they are lend­ing on them now.

“Well-run HMOs are a good bet fi­nan­cially be­cause they give such a good in­come and banks recog­nise that.”

His 12 bed­sits bring in about £35,000 pre-tax profit a year.

“That’s an in­come for some­one who is wil­ing to put in the work,” he says.

He also rec­om­mends in­vest­ing in ter­raced houses in town cen­tres. “I make all mine low­main­te­nance so it costs me about £8,000 to get one dec­o­rated in mag­no­lia, with lam­i­nate floor­ing and fire doors through­out, but then when a ten­ant leaves I can get it cleaned and painted again and up for let within three days.”

John Ar­mis­tead, a com­pany ac­coun­tant, has just fin­ished his first prop­erty de­vel­op­ment.

John, of Ot­ley, de­cided to in­vest in prop­erty af­ter tak­ing a six month ca­reer break at the brink of the re­ces­sion.

“I thought I’d get an other job but it wasn’t as easy to get back into work as I thought, which is why I de­cided to look at prop­erty in­vest­ment.”

He bought a re­pos­sessed, three bed­room semi on Brad­ford Road, Ot­ley, through Dacre, Son and Hart­ley’s In­vest­ment Ser­vice.

“I’ve al­ways en­joyed ren­o­va­tion and I’m quite handy and my son is a plumber so I thought I’d give it a go.

“I had the time and I had the money and I think that al­though prices aren’t go­ing to rise they are go­ing to hold steady.”

The aim, says John, was to add value rather than rely on a ris­ing mar­ket.

He bought it for £136,500 and has to­tally re­fur­bished the house putting in a new cen­tral heat­ing sys­tem, re­plas­ter­ing and in­stalling a new kitchen and bath­room.

The work took four months and the house is back on the mar­ket for £169,950.

“I found it phys­i­cally hard labour­ing on the house but then I’ve been an ac­coun­tant for 30 years and I’m not used to do­ing that sort of work ev­ery day,” says John.

“It’s not easy money but you can look back with sat­is­fac­tion at the job you have done.”

He has just bought an­other prop­erty ren­o­va­tion project, but has also se­cured a new job in fi­nance.

“I will have to pay other peo­ple to work on the house this time and hope­fully it will be worth­while,” he says.

“I have no in­ter­est in rent­ing them out. I don’t want the has­sle of ten­ants. I’m more in­ter­ested in re­al­is­ing the cap­i­tal and mov­ing on to an­other project.”

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