CASE STUDIES: WHAT DO TODAY’S INVESTMENT BUYERS THINK IS HOT 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.”